Advertisement
When should a housing society in Mumbai start considering re...
From GST on JDAs to SEBI’s REIT reclassification and the S...
Stay ahead in the world of real estate with our daily podcas...
Stay ahead in the world of real estate with our daily podcas...
India is positioning its data centre ecosystem as the backbone for AI, cloud computing, and digital public infrastructure. The Union Budget this year is seen as a key opportunity to address execution challenges like energy access, approvals, sustainability, and regulatory clarity. With global investments exceeding USD 67.5 billion from companies like Microsoft, Amazon, Google, and Meta, India is attracting major attention. However, issues such as power supply, environmental sustainability, land, water availability, and skilled workforce shortages must be resolved to fully harness this growth potential and become a global hub for AI infrastructure.
India's data centres are emerging as central to its ambitions in artificial intelligence, cloud computing, and digital infrastructure. Once seen as mere backend IT assets, these facilities now form the foundation of the country's digital future. The Union Budget this year is expected to play a crucial role in strengthening execution measures, which include energy availability, faster regulatory approvals, and long-term policy certainty. Advertisement
Industry leaders note that capital is not the main constraint. Global investment commitments total around USD 67.5 billion, with Microsoft pledging USD 17.5 billion over four years, Amazon investing USD 35 billion in five years, Google committing USD 15 billion through partnerships with Adani Group and Bharti Airtel, and Meta developing a 500MW facility near Visakhapatnam with Sify. Despite hosting nearly 20% of the world's data, India accounts for only about five percent of American data centre capacity.
Power has become the most pressing challenge. AI workloads, particularly GPU-driven operations, consume five to six times more energy than traditional cloud infrastructure. Industry experts emphasize the need for competitively priced green power, dedicated transmission corridors, relaxed demand charges, and a separate tariff category for data centres. Addressing transmission and distribution bottlenecks is equally crucial as AI operations become more energy-intensive.
Sustainability is now a core requirement rather than an optional compliance measure. Proposals ahead of the Budget include tax incentives linked to Power Usage Effectiveness benchmarks, grants for liquid cooling and waste-heat recovery projects, interest support for renewable-heavy initiatives, and battery energy storage to ensure round-the-clock clean power. With these measures, India can position itself as a global hub for sustainable, sovereign AI infrastructure. KPMG estimates suggest data centre capacity could grow fivefold by 2030 to over 8 GW, generating more than USD 30 billion in capital expenditure.
Data sovereignty and regulatory clarity remain important. The Data Protection and Digital Personal Data Protection Act has reshaped data centre economics, with localisation requirements driving demand for domestic facilities. Industry stakeholders advocate recognising data centres as national infrastructure, enabling faster approvals, tax relief, and simplified single-window processes.
Talent shortages are emerging as another challenge. Data centre operations require skills in power systems, cooling technologies, cybersecurity, and critical facility management. Coordinated efforts in education and industry partnerships are needed to build a specialised workforce capable of supporting rapid sector growth.
New hubs are developing across India, particularly in coastal areas and cities like Hyderabad, attracted by policy incentives, reliable power, and water availability. Yet, concerns about land, electricity, and water access persist, highlighting the need for careful planning to ensure sustainable expansion of this critical infrastructure.
5th Jun, 2025
25th May, 2023
11th May, 2023
27th Apr, 2023
Advertisement
Facebook
Whatsapp
