India's Bid To Become Global Data Centre Hub: Energy, Sustainability, And more

Can India become a major global hub for data centres?

Addressing a press conference earlier this week, Goyal said that India is a preferred destination for data centres as the country now possesses the requisite infrastructure, specifically power. He was referring to India's national grid, which is essentially an interconnected electricity network that recently crossed 500 Gigawatts (GW) of total installed power capacity.

"...Europe does not have a national grid. Even the US does not have a national grid. But India has a national grid. So we are a preferred destination for data centres and as they are planning a growth in the years to come. There will be sufficient power available to make sure that we meet the need of our people, farmers, industry and commercial establishments including data centres and GCCs," Goyal is quoted as saying.

Goyal's comments come at a time when other Asian countries such as Thailand and Singapore are stepping up their efforts in the data centre space. For instance, Thailand has recently okayed four data centre projects worth USD 3.1 billion in investment. This move is coupled with new measures to kickstart projects that have already been approved.

Similarly, Singapore remains a key hub due to its reliable infrastructure and extensive subsea cable network. Major deals, such as KKR and Singtel's potential acquisition of ST Telemedia Global Data Centres, and large-scale investments highlight ongoing investor confidence in the region. Other markets such as Indonesia, Malaysia, Japan, and South Korea are also in the fray.

As far as India goes, the country itself is a massive market and is undergoing massive transformation. This is driven by the rollout of 5G and the exponential growth and adoption of AI. For perspective, India is the second largest market for OpenAI's ChatGPT in terms of overall traffic share. India is also now Perplexity AI's largest user base by monthly active users.

At the core, however, is the network of data centres, essentially the engines that are processing and managing this mammoth information flow. But these centres are energy-intensive, and are linked with India's energy policies as well as its net-zero carbon targets and sustainability. Moreover, it's also linked with the demands of digital sovereignty. And it's also a big market opportunity.

India's DC Capital

A recent CBRE report gives a detailed overview of India's rising data centre capabilities and prowess.

According to the report, India's operational DC stock reached nearly 1,530 MW (translating to 23 million sq. ft.), as of 9M (January-September) 2025, with 260 MW of new supply added during the year.

"Nearly 90% of existing capacity remains anchored in Mumbai, Chennai, Delhi-NCR, and Bengaluru, powered by multiple undersea cable landing stations, excellent fibre optics network, supportive government policies, and established financial ecosystems," the report added.

CBRE in its report also noted the country is also seeing a new growth cycle which is being spearheaded by corporates and hyperscalers, and now covering smaller Tier 2 cities.

And as far as the capital flows go, between 2019 and 9M 2025, India secured nearly USD 94 billion in investment commitments from global and domestic players. Telangana, Maharashtra, Tamil Nadu, Uttar Pradesh, West Bengal, and Karnataka together accounted for about 45% of this capital.

India is also attracting tech majors to deploy their data centres in India. Recently, Google partnered with the Adani Group to announce USD 15 billion investment towards setting up an AI infrastructure hub in Andhra Pradesh, including a gigawatt-scale data centre.

Earlier this week, Amazon (AWS) announced investing USD 7 billion in Telangana over the next 14 years to expand its cloud capabilities. Microsoft also has announced investing USD 17.5 billion in the country.

India's data sovereignty ambitions

Data sovereignty has become a hot topic of discussion lately. It's pretty similar to the data localization conversations we had for the internet and tech companies in yesteryears.

"Sovereignty is crucial as everyone wants to ensure control of their data, and we are building multiple options. The question is how you keep sovereignty and cyber resilience in balance," Microsoft Satya Nadella said during his recent India trip.

Ashish Banerjee, Sr Principal Analyst at Gartner, further explains that it is easy to think of data sovereignty as just "keeping files in India." But in his opinion, the real driver is Operational Resilience and AI Nationalism.

Sovereignty is also important to ensure the security of our data, and also be cognizant of risks such as cloud weaponisation.

"If India's banking or energy grid data sits on foreign servers, it is vulnerable to unilateral sanctions. For example, if a geopolitical conflict arises, a foreign power could legally compel a cloud provider to freeze assets or data access. Local data centers act as a digital "Fort Knox," ensuring that Indian critical infrastructure is immune to foreign jurisdiction. If India wants sovereignty over citizen and strategic data, it needs the practical ability to enforce access, audit, retention, and incident response inside its jurisdiction, not just clauses in contracts," Banerjee explained.

On AI Nationalism, Banerjee said that one cannot train massive Indian language models efficiently if the data is latency-locked in another country. The cost of ingress/egress (moving data in and out of the cloud or cloud regions) is prohibitive. To be an AI superpower, India needs the "Compute" (GPUs) to sit right next to the "Data" (Users). He also stressed the need for considering latency as the new currency.

"In a digital economy, milliseconds equal millions. For India's UPI (which processes 100M+ transactions daily) or the booming Quick Commerce sector (10-minute deliveries), latency is the bottleneck. You cannot run a real-time, high-frequency economy if your server is in a foreign country. Local hosting is not just about rules; it's about the velocity of money," he said.

The road ahead, however, focuses specifically on capacity building. According to Biswajeet Mahapatra, Principal Analyst at Forrester, India needs to invest in reliable power infrastructure, high-speed connectivity, and skilled workforce to attract data center investments.

Mahapatra also said that streamlining land acquisition, offering tax incentives, and creating clear regulatory frameworks will encourage global players. Building strong partnerships between government and private sector and ensuring robust cybersecurity standards are also critical to position India as a competitive data center hub.

Banerjee, on the other hand, calls for a "Green & Blue" strategy, leveraging renewable energy (Green) and submarine connectivity (Blue) to push India's bid to move from a domestic storage facility to a global hub.

He pointed out that India's data capacity is heavily skewed towards coastal cities due to submarine cable landings. To create a more democratised ecosystem, India needs to start incentivising "Inland Hubs" (like Hyderabad, Delhi-NCR, Bangalore, Indore) by treating terrestrial fiber backhaul as critical infrastructure, lowering the cost to move data from the coast to the interior. The government should treat terrestrial fiber networks connecting potential inland hubs to coastal landing stations as "National Highways." This decentralizes risk, if a cyclone hits Mumbai, India's digital economy shouldn't get dark.

He also called for positioning India as a green location instead of just being a cheaper alternative. In order to woo global hyperscalers such as Google, Amazon, and Microsoft, India "Green Data Center Zones" where 100% renewable energy is guaranteed by the state grid can be India's USP over coal-heavy competitors. Moreover, India's PLI (Production Linked Incentive) schemes need to expand aggressively into server manufacturing and high-end networking gear.

"A hub cannot rely entirely on imports for its core machinery," Banerjee noted.

"Renewable energy can reduce the carbon footprint of data centers and ensure sustainable growth. India can promote solar and wind power integration through long-term power purchase agreements and green energy corridors. Incentives for renewable adoption, investment in energy storage, and hybrid energy models will make data centers more resilient and cost-efficient while aligning with India's climate goals," Foresters's Mahapatra added.