India’s data centre industry closed 2025 with its most high-velocity year yet, powered by a wave of mega-announcements that reshaped the country’s digital infrastructure space. The year saw Adani and Google unveil plans for a 1 GW AI-focused data centre campus in Visakhapatnam, alongside Adani’s separate Rs 2,500-crore, 48 MW green facility in Telangana. Sify Infinit Spaces filed for a landmark IPO while expanding to 14 operational data centres with 11 more under development, positioning itself as India’s first publicly listed pure-play DC operator.
Meanwhile, Japan’s NTT Data committed Rs 2,400 crore to a new three-facility campus near Bengaluru airport, after announcing Rs 10,500 crore AI data centre cluster in Hyderabad and a 500 MW data centre campus in Mumbai. And in one of the biggest strategic bets of the year, IT giant TCS and TPG formed a multi-billion-dollar joint venture to build AI and sovereign data-centre infrastructure. These announcements, combined with rapid AI-driven demand and evolving policy support, made 2025 a true inflection point for India’s data-centre sector.
The year saw installed DC capacity climb to 1.3 GW across key metro markets (as per as a Cushman & Wakefield report), with projections indicating a potential five-fold increase to 5 GW by 2030.
Policy And Investment Enablement
The momentum this year was shaped by some positive regulatory action. Vipin Jain, President, Hyperscale Growth, Delivery & Innovation at CtrlS Datacenters, said that the Draft National Data Centre Policy 2025, combined with state-level policies, "has introduced specific fiscal and non-fiscal incentives aimed at reducing initial costs and speeding up the development process scale."
The policy framework is designed to make long-term investment commercially viable. Jain added that the draft "outlines long-term tax incentives, clarifies capital treatment, and discusses potential GST input credits for major equipment usually linked to energy-efficiency and renewable-sourcing thresholds, fundamentally changing the economics of long-term DC investment."
Venkat Sitaram, Senior Director & Country Head – Dell ISG India, concurred, calling the draft policy "a particularly strategic milestone, as it strengthens India’s ambition to become a global data infrastructure hub with its focus on streamlined clearances, green energy adoption and a more conducive investment environment."
In terms of scale, the data centre capacity has expanded "almost fourfold from 2018 to 2025 (0.3 GW to 1.26 GW)," propelled by hyperscaler investments. Industry reports suggest India's third-party capacity is expected to double by March 2028, from approximately 1,250 MW in 2025 to 2,400-2,500 MW. Overall, India’s DC capacity is expected to cross 4,500 MW by 2030, backed by an estimated investment of USD 20-25 billion.
The AI-first Design Pivot And Capacity Constraints
The single most important technical change in 2025 was the clear shift towards AI-first design principles. "The most significant change in 2025 was the clear pivot toward AI-first design principles across the industry," said Jain. This transformation is visible in new builds utilising "High-density racks, liquid-assisted cooling adoption, and GPU-grade deployment planning."
The computational demands of AI have fundamentally altered data centre requirements. Piyush Prakashchandra Somani, Promoter, Managing Director and Chairman of ESDS Software Solution Limited, pointed to the density challenge. "GPU-based clusters now demand racks that draw five to six times more power than older setups, often reaching 8 to 10 kW per rack." This power jump has consequently pushed operators toward "liquid cooling, chilled loops, and tighter airflow control," he said.
Despite the strong demand, the pace of construction is now primarily limited by energy sourcing. Sitaram added that "the industry is approaching a point where power availability will define the pace of new AI data center construction," adding that "the real bottleneck is not AI demand, but the energy required to run high-density environments sustainably."
Meanwhile, Avinash Joshi, Executive Managing Director – India at NTT Data, said that constraints facing the business fundamentally boil down to "availability of land and power." He also confirmed that for NTT Data, "the demand is higher than the supply, which is a good problem to have," adding that the company is "sold even before we have started the construction."
NTT Data, the country’s largest data centre player, saw its installed IT load capacity jump from 160-175 MW in 2022 to 350 MW in 2025, with another 150 MW capacity in making, projected to reach 500 MW in under two years.
Sustainability As A Strategic Asset
Energy efficiency and green power moved to the core of operational strategy. Jain said that "renewable energy has become a strategic asset rather than just a box to check for ESG compliance." Operators are "increasingly organising long-term power procurement through open-access renewables, captive generation, or power purchase agreements."
India’s facilities currently report Power Usage Effectiveness (PUE) values "between 1.3 and 1.6," while roughly 25 per cent of data centres are "green certified," a figure expected to climb to 30-40 per cent by 2030.
Meanwhile, Sitaram spotlighted a key development in sustainable infrastructure, "a strong example is PhonePe’s new green data centre in Navi Mumbai, built with Dell Technologies and NTT." The facility incorporates "35 per cent recycled materials, Direct Contact Liquid Cooling, Liquid Immersion Cooling," and customised servers that can reduce power consumption by nearly 25 per cent. This resulted in a PUE of 1.27, which is "far better than the air-cooled industry average of 1.6," saving "roughly 1.58 MW of power," or "the equivalent of powering about 2,000 homes."
Market Dynamics And 2026 Outlook
Mumbai remained the dominant regional hub in 2025, with "Chennai and Delhi NCR closely following the lead largely due to BFSI workloads, digital governance programmes and multi-cloud strategies," said ESDS’ Somani. These established hubs maintained "consistently high utilisation levels."
Enterprises are prioritising hybrid IT plans, with India’s colocation market growing at a 25.24 per cent CAGR, driven by compliance and AI needs. Crisil projects data centre leasing will grow "about 22 per cent each year until FY28," stemming from outsourcing work that requires rule compliance.
The focus is also widening to smaller nodes. Edge data centres, currently making up less than 1 per cent of all capacity now, are projected to grow three times bigger by 2027, say experts. This also points to the necessity for data sovereignty, which continues to make organisations keep their infrastructure onshore, especially in BFSI, government and public sector environments.
As per experts, AI will remain the primary driver in 2026 too. Sitaram confirmed that AI "will remain the strongest demand driver," but added that "sustainability, power optimisation and responsible resource use... will define competitive advantage."
Gartner projects the "data centre systems segment in India to grow 20.5 per cent in 2026, outpacing every other IT category."
CtrlS’ Jain forecasted that the demand landscape "will become more segmented, with AI training focused on hyperscalers and platform providers, while AI inference expands across enterprises requiring low latency access."
He concluded that the upcoming year "will favour those operators who plan ahead, focusing not just on capacity but also on density, efficiency, geographic redundancy, and resilience." |
