India Digital Transformation Market Projected to Reach $229 Billion

India's digital transformation market is projected to reach $229.59 billion by 2029, according to a report by smallcase. The market is expected to grow at a compound annual growth rate between 20.63% and 32.1%, driven by the rapid adoption of artificial intelligence, cloud computing, and the expansion of digital public infrastructure.

The Ministry of Electronics and Information Technology expects total investment in the data center ecosystem to surpass $200 billion. Operational data center capacity is forecast to exceed 2 GW by the end of 2026 and potentially reach 7.5 GW by 2030. While Mumbai remains the largest market for these facilities, Hyderabad is emerging as a significant alternative.

The sector could generate nearly nine million jobs by 2030. However, the industry faces several headwinds, including fragmented regulatory approvals, limited fiber penetration, and a shortage of specialized AI infrastructure talent.