India Data Center Market To Reach Over US$ 31.36 Billion By 2035 Driven By Generative AI, 5G Rollout, And Cloud Infrastructure Growth Astute Analytica

(MENAFN- GlobeNewsWire - Nasdaq) India's data center market is entering a high-growth phase, driven by explosive AI adoption, hyperscale cloud expansion, and nationwide digital transformation initiatives. Rapid capacity additions, rising investments from domestic conglomerates and global operators, and aggressive deployment of AI-ready infrastructure are reshaping the market's scale and complexity.

Chicago, Feb. 04, 2026 (GLOBE NEWSWIRE) -- The India data center market was valued at 8.94 billion in 2025 and is expected to reach US$ 31.36 billion by 2035, growing at a CAGR of 13.37% from 2026 to 2035.

The global digital economy is witnessing a seismic shift, and India has firmly positioned itself at the epicenter of this transformation. As people navigate into 2026, the Indian data center market has evolved from a burgeoning sector into a critical pillar of the global internet infrastructure. Fuelled by the explosive adoption of Artificial Intelligence (AI), robust 5G penetration, and aggressive government digitalization mandates, the market is expanding at a velocity that outpaces most mature economies.

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2025 Marks a Turning Point as India's Data Center Capacity Surges Past 1.5 GW

The year 2025 was a watershed moment for capacity addition. According to recent industry data from Savills and JLL, India's operational data center stock surged to about 1,520 MW by the close of 2025. This was driven by a record-breaking supply addition of 387 MW in a single year, significantly overshadowing the 191 MW added in 2024. This rapid acceleration indicates that developers are racing against time to bridge the demand-supply gap.

Geographically, the India data center market remains highly concentrated yet is showing signs of diversification. Mumbai continues to reign supreme, commanding more than 52% of the total installed capacity. The city's dominance is anchored by its status as a submarine cable landing hub and its reliable power grid. However, Chennai is cementing its position as the second-largest hub with nearly 20% market share, driven by new cable landings like MIST. Meanwhile, Delhi-NCR and Hyderabad are emerging aggressively, with Hyderabad attracting hyperscalers due to its disaster-safe geography and proactive state policies.

Domestic Conglomerates and Global Giants Intensify the Battle for India's Data Center Dominance

The competitive landscape of the Indian data center market is fierce, characterized by a mix of domestic conglomerates and global heavyweights. STT GDC India remains a market leader, managing a massive portfolio with more than 300 MW of critical IT load. However, the challenger mindset is evident in AdaniConneX, a joint venture between Adani Enterprises and EdgeConneX, which has set an audacious target of 1 GW (1,000 MW) capacity. Their aggressive strategy is backed by a USD 10 billion investment roadmap.

NTT reported about 300 MW (precisely 292 MW) of live IT load in July 2025, with aggressive expansions underway, including plans to reach 400 MW within 18-24 months via new campuses in Noida, Hyderabad, and Bengaluru. Earlier claims of "more than 265 MW" date to 2023-2024 launches. Meanwhile, CtrlS Datacenters has committed USD 2 billion for expansion over the next few years, focusing on green, AI-ready campuses. The market is also seeing tech giants stepping in directly; for instance, Yotta Data Services has pivoted from traditional colocation to becoming an AI-cloud powerhouse, procuring 16,000 Nvidia H100 GPUs to service high-performance computing requirements.

Generative AI Boom Fuels Unprecedented Demand for High-Density Server Hardware

The hardware segment's 37.05% revenue share of the India data center market is primarily boosted by the aggressive procurement of AI-ready compute infrastructure and government-backed manufacturing incentives. The surge in Generative AI has compelled data center operators to deploy high-density server fleets at an unprecedented scale. Yotta Data Services exemplifies this capital-intensive shift, having ordered more than 16,000 NVIDIA H100 GPUs to power its Shakti Cloud, with plans to scale this inventory to 32,768 units by the end of 2025. This massive capital outlay for GPU-heavy servers directly inflates the hardware segment's financial footprint.

Concurrently, the Production Linked Incentive (PLI) 2.0 scheme has successfully catalyzed domestic high-value manufacturing, pushing the hardware demand further in the data center market. Netweb Technologies, a key beneficiary, reported a staggering 154.4% year-on-year income growth in Q1 FY25, with its AI systems revenue surging by 146%. Similarly, global giants like Lenovo have localized production in Puducherry to manufacture 50,000 AI rack servers annually, catering to both domestic and export markets. This dual-engine massive import of high-value AI components by operators and a booming domestic server manufacturing ecosystem validates the hardware segment's commanding revenue dominance.

Rising Data Center Energy Needs to Claim Up to 3% of India's Total Electricity Generation

While short-term forecasts predict that the market will hit 1.8 GW by 2027, long-term projections are far more bullish. Nomura forecasts that India's data center capacity could skyrocket to 9.2 GW by 2030. Extrapolating to 2035, industry consensus suggests India could rival European markets, potentially exceeding 12-15 GW if energy infrastructure keeps pace.

Power consumption is the critical variable here in India data center market. With data centers expected to consume 8% of global energy by 2030, India's data center power use is forecast to quadruple from 13-17 TWh in 2024 to 57 TWh by 2030, rising from 0.8-1% to 2.6-3% of national electricity generation. This equates to needing 15-30 GW additional capacity, about 10% of planned renewables. Consequently, the push for renewable energy is non-negotiable. The government's target of 500 GW of non-fossil fuel capacity by 2030 is directly aligned with the industry's need for green power, ensuring that this growth does not derail national climate goals.

India Data Center Market Major Players:

• Tata Communications Ltd
• STT GDC INDIA Pvt Ltd
• Datacenters Ltd
• Sify Technologies
• Netmagic Solutions Pvt Ltd
• Web Werks India Pvt Ltd
• ESDS Software Solutions Ltd
• NxtGen Datacenter and Cloud Technologies Pvt Ltd
• GPX India Pvt Ltd
• Yotta Data Services Pvt. Ltd
• Other Prominent Players

Key Market Segmentation:

By Hardware

• Servers
  • Blade servers
  • Rack servers
  • Tower servers
  • Micro servers
• Storage Systems
  • Storage Area Network (SAN)
  • Network-Attached Storage (NAS)
  • Direct-Attached Storage (DAS)
  • Cloud storage
• Power and Cooling Systems
  • Power Supply
    • Uninterruptible Power Supply (UPS) systems
    • Generators
    • Power distribution units (PDUs)
  • Cooling Solutions
    • Air conditioning units
    • Liquid Cooling Systems
    • Advanced Cooling Technologies
• Racks and Enclosures
  • Open frame racks
  • Enclosed Racks
  • Customized Enclosures

By End Users

• IT and Telecom
• Banking, Financial Services, and Insurance (BFSI)
• Healthcare
• Government
• Manufacturing
• Others

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