India Emerges as Global AI Data Center Hub

India is rapidly becoming a primary global destination for data center infrastructure, filling a gap created by structural bottlenecks in North America and Europe. ICICI Securities reports that India's land-banked capacity exceeds 10.5GW, providing a scalability advantage that Western cities cannot match. This growth is bolstered by the Government of India's Union Budget 2026-27, which offers tax holidays until 2047 for foreign cloud providers, and the Digital Personal Data Protection Act.

Investment commitments are surging, with Google proposing $15 billion in Andhra Pradesh, Microsoft planning $17.5 billion by 2030, and Amazon committing $48 billion by 2030. The industry is shifting from standard server facilities to AI-ready, built-to-suit campuses to handle the high power and cooling requirements of GPU clusters. Notable projects include a partnership between Reliance Industries and Meta in Jamnagar and a $30 billion investment plan from AirTrunk.

Market projections indicate significant acceleration. KPMG in India expects the domestic market to grow from $1.7 billion in FY26 to $6.8 billion by FY30, with India's share of the global market rising to roughly 5 percent. Total installed capacity reached 1.9 gigawatts in FY26, with another 4.5 gigawatts planned over the next five years. While coastal metros like Mumbai and Chennai serve as critical gateways, the sector faces ongoing challenges regarding water consumption and power grid connectivity.