India’s data centre capacity likely to quadruple to 4GW by FY30: Report

New Delhi, March 25 (IANS) India’s data centre capacity is expected to rise to about 4 gigawatts (GW) by FY30, providing a potential investment of Rs. 1.5 lakh crore till then, a report said on Wednesday.

The report from CareEdge Ratings said India’s data centre capacity per million internet users at 1.2 megawatts per million users is lower than the global average of 5 megawatts per million users worldwide.

Digitisation, cost competitiveness and rising adoption of artificial intelligence are factors driving strong growth in India’s data centre sector. India’s share of the global data centre market was roughly 4 per cent in 2025 with 1.2 gigawatts of capacity.

The country's co‑location data centre capacity doubled to 1.2 gigawatts during FY22–FY25, complemented by high absorption levels with utilisation above 90 per cent on average, the report said.

The ratings agency projected industry revenue to grow at a compound annual growth rate (CAGR) of around 24 per cent during FY26–FY30, with stable EBITDA margins of about 40–42 per cent, although leverage levels may remain relatively elevated due to a high capex cycle in the development phase.

Sector enjoys strong revenue visibility through long term contractual arrangements, which ensure stable cash flows and promote high customer stickiness.

“The industry is in an upswing with high capex, fundraising capability of strong sponsors and large equity investments targeted to the Indian Data Centre entities," said Puja Jalan, Director CareEdge Ratings.

The AI-led demand shall catapult the growth story, while the power infrastructure support is critical to realise the industry's potential, she said.

Also, the capability to manage cash flows amid rising costs and escalating commissioning timelines shall be key to sustenance, she added.

While, the data centre cost increased 50- 70 per cent in recent years led by higher land prices, adoption of advanced cooling technology and investment in RE, the commission timelines have also been escalated with changes in scope and delays in receipt of clearances, the report noted.

Tej Kiran, Associate Director CareEdge Ratings noted that data centre demand is currently driven by enterprise IT and cloud storage, but AI-led workloads are expected to power the next phase of growth over the next 5–7 years.

—IANS

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