Indian Data Center Market Poised for Rapid Growth, Expected to Reach USD 3.56 Billion by 2030

The  Indian Data Center Market  is experiencing significant expansion, with a market size valued at  USD 1.67 billion in 2023  and projected to grow to  USD 3.56 billion by 2030 , reflecting a  CAGR of 11.4%  during the forecast period. This growth is fueled by increasing digitalization, cloud adoption, edge computing, and government initiatives aimed at strengthening the country's digital infrastructure.

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Market Overview

A data center is a facility used by organizations to house critical IT applications and data. Modern data centers are designed with a network of computing and storage resources, including routers, switches, servers, firewalls, and storage systems, enabling efficient delivery of applications and data. In India, the data center landscape has evolved from private, on-premises facilities to shared, cloud-enabled infrastructures managed by leading service providers.

Mumbai, Delhi, Bengaluru, and Chennai dominate the market, accounting for ~60% of total data center sites and over 75% of IT load capacities. With 880 million internet users and rising demand for digital services, India’s need for data center capacity continues to accelerate.

Market Drivers

  1. Rapid Digital Growth:
    The expansion of cloud computing, AI services, and digital transformation initiatives is driving unprecedented demand for data storage and processing capabilities. Companies like Digital Realty and Colt DCS are investing heavily in hyperscale facilities to meet the rising requirements of Indian enterprises.

  2. Government Initiatives:
    Policies promoting digitalization, IT infrastructure development, and incentives for domestic manufacturing of data center equipment are supporting market growth. The Draft Data Centre Policy 2020 encourages local manufacturing and adoption of renewable energy.

  3. Sustainability Focus:
    With environmental concerns gaining attention, operators are prioritizing green infrastructure. Companies such as Vertiv and Colt DCS are establishing IGBC-compliant, net-zero facilities, integrating renewable energy, and implementing energy-efficient solutions.

Market Challenges

Despite growth, inadequate infrastructure remains a constraint. The projected power demand for data centers could reach nearly 5 gigawatts over the next six to seven years. Meeting capacity requirements while ensuring environmental sustainability poses a significant challenge.

Opportunities

  • Real Estate Expansion: Over 500 acres of land were acquired in 2022 for new data center projects, with total floor space expected to double to 20 million sq. ft. by 2025.

  • Domestic Manufacturing: Encouraging local production of IT and non-IT components reduces reliance on imports and boosts economic value addition.

  • Renewable Energy Integration: Rising focus on clean energy motivates operators to establish carbon-neutral data centers.

Market Segmentation

  • By Industry Vertical: BFSI, Government, IT & Telecom, Media, Retail, Manufacturing, Others

    • IT & Telecom  dominates, requiring high connectivity for cloud and mobile services.

  • By Component:  Electrical, Mechanical, Security, Networking, Others

    • Electrical  systems lead, encompassing power distribution, backup solutions, and management tools.

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Key Players

Leading companies in the Indian data center market include  Sify Technologies, Web Werks, CtrlS Datacenters, ESDS Software Solutions, Yotta, Netmagic Solutions, AWS, Gpx Global Systems, NxtGen, NTT Ltd, Nxtra Data, Reliance, STT GDC, Tata Communications, Equinix, RackBank Datacenters, COLT DCS, Vertiv, and AdaniConneX .

Conclusion

India's data center market is positioned for robust growth, driven by digitalization, cloud adoption, and sustainability initiatives. With investments in hyperscale and green facilities, the sector is set to play a pivotal role in supporting India's digital economy, meeting enterprise demand, and enabling technological advancement across industries.