A Nvidia HGX H100 server at the Yotta Data Services Pvt. data center in Navi Mumbai, India, on Thursday, Mar. 14, 2024.
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This report is from this week’s CNBC’s “Inside India” newsletter, which brings you timely, insightful news and market commentary on the emerging powerhouse. Subscribe here.
The big story
There’s a gold rush underway in India’s nascent but fast-growing data center industry, with global giants, billionaires and even luxury property developers piling in.
India’s current data center capacity is around 1.2 gigawatts — just a fraction of global capacity — but the market is set to more than double, crossing 3 gigawatts within the next five years, according to a report in May by real estate services and investment management firm Collier.
That growth is drawing in global data center companies, Indian billionaires, and even luxury real estate developers, all eager to stake their claim in what many see as the backbone of the country’s digital future.
In July, Google reportedly entered into talks with the Andhra Pradesh government to set up a 1 gigawatt facility. A month later, OpenAI’s Sam Altman announced that his company was exploring plans for a 1-gigawatt data hub in India.
These moves underline the scale of ambition: facilities once measured in tens of megawatts are now being planned in gigawatts, often by “hyperscalers,” or companies that consume vast amounts of computing power. One gigawatt is 1,000 megawatts of power, while a megawatt is 1 million watts.
Unsurprisingly, competition is fierce. More than 15 players are chasing market share — from global heavyweights like Japan’s NTT, Singapore’s Temasek-backed STT GDC and U.S. operator Equinix, to Indian conglomerates including Adani Group and Reliance Industries.
Real estate developers are also pivoting. Luxury realty developer Hiranandani Group’s Yotta Infrastructure, Delhi-based Anant Raj Developers and Pune-based Panchshil Realty are also pivoting from housing to hyperscalers, wagering billions to reposition themselves from builders of homes and offices into digital landlords.
What’s driving the boom?
At the heart of the surge is a structural shift in demand. About 60% of data center clients are enterprises, 30% are hyperscalers, and AI users are about 10%, according to data from property consulting firm Anarock Capital.
“As AI workloads rise, we expect use by enterprises to stay consistent, but hyperscalers’ use may rise to about 35%. AI users ‘ specific demand will potentially rise between 20% and 25%,” said Shobhit Agarwal, chief executive officer of Anarock.
Some examples of hyperscalers include large-scale data center operators like Microsoft, Amazon Web Services and Google.
The digitalization of banking in India and data localization regulations that require Indian financial data to be stored in the country have driven enterprise data demand, Alok Bajpai, managing director India of NTT Data Systems, told CNBC. The rise of e-commerce services, followed by cloud infrastructure companies, brought in the second wave of data center demand, he added.
Now the third wave is expected to come from AI workloads.
Last week, Equinix expanded into a second state in India through its first AI-focused facility in Chennai.
60% of Equinix’s revenues come from customers who work with the company across all three regions, Americas, Europe, Asia and “they are keen to expand into India”, Manoj Paul, country managing director of Equinix, said last Friday on CNBC’s “Inside India.”
Enterprise clients currently drive most of India’s data center demand, but their needs are relatively modest. As the customer profiles change, facilities are being designed to handle much larger workloads.
“Earlier, demand for enterprise-driven capacity rarely crossed 10 megawatts. With hyperscalers, requirements have risen to 25 megawatts, and in some cases 50 megawatts. With AI workloads, this could climb further to 75–100 megawatts,” said Bajpai of NTT Data Systems.
Why India?
On paper, India has several natural advantages. Markets like Japan, Australia, China and Singapore in the Asia Pacific region have matured. Singapore, one of the oldest data center hubs in the region, has limited room to deploy large-scale data centers due to land availability issues.
India has abundant space for large-scale data center developments. When compared with data center hubs in Europe, power costs in India are relatively low. Coupled with India’s growing renewable energy capacity — critical for power-hungry data centers — and the economics begin to look compelling.
Local demand, fueled by the rise of e-commerce — a major driver of data center growth in recent years — and potential new rules for storing social media data, strengthens the case.
Put simply: India is entering a sweet spot where global cloud providers, AI players, and domestic digitalization all converge to create one of the world’s hottest data center markets.
Who’s in the race
For now, global majors still dominate. NTT Data Centers and STT GDC command a higher share of capacity in India, according to experts. Domestic operators like CtrlS and Airtel-owned Nxtra, Warburg Pincus-owned Princeton Digital Group, are also in the mix.
But it’s the ambitions of Indian billionaires that are overshadowing the Indian data center landscape. Gautam Adani’s joint venture with U.S.-based EdgeConneX, AdaniConnex, currently operates less than 40 megawatts but is scaling to 210 megawatts soon.
Mukesh Ambani’s Reliance is reportedly planning a 3-gigawatt mega data center in the western Indian state of Gujarat, with an investment of $20–30 billion — a project that could reshape the industry’s landscape.
Smaller developers-turned-operators are moving in too. Anant Raj Developers, a residential township developer, announced plans to invest $2 billion, targeting 300 megawatts of capacity by 2032. Since declaring its entry into the sector in 2023, the company’s stock price has more than doubled.
The roadblocks
But India is no easy place to build.
Unlike other markets with clear regulatory frameworks, data center developers in India face a maze of 30-plus approvals from different agencies, according to industry experts. “In India, data center operators frequently encounter delays due to a lack of standardized regulations across states,” real estate consultancy Knight Frank noted in a report in April.
Consider the case of U.S.-based Colt, which bought land in Mumbai in 2018 to build a 100-megawatt facility. It took six years for the site to go live, with 22 megawatts of operational capacity. To accelerate growth, Colt entered a $1.7 billion joint venture with local developer RMZ Infrastructure in 2024, aiming to build 250 megawatts of capacity across Navi Mumbai and Chennai.
The hurdles extend to land as well.
Data centers require large, litigation-free parcels in specific geographies. Many data center operators are backed by private equity or U.S. tech companies, and they cannot acquire land without a clear title, as this could raise corporate governance issues, said a property consultant who wished to remain anonymous.
These regulatory delays have created opportunities for Indian property groups, which buy land, resolve disputes, and sell it on to international operators. In some cases, they go further — building and leasing data centers or even running them outright.
However, the flood of entrants risks oversupply and a price war, especially in a nascent market. “If you compared India to an Indonesian market, we are significantly down on pricing due to price competition driven by few players to get hyperscalers accounts,” said Devi Shankar, senior executive director at CBRE India.
There could be some consolidation in the market over the next 2-3 years, she added.
For now, the race is wide open. But with dozens of operators chasing the same prize, consolidation looks inevitable.
Top TV picks on CNBC
Manoj Paul, managing director for Equinix India, discussed the opening of the company’s new AI-ready data center in Chennai, in the southern Indian state of Tamil Nadu.

Standard Chartered Wealth Solutions’ Daniel Lam said Indian markets are “drifting down, not dumping down” despite U.S. tariff threats.

VinFast Asia’s chief executive officer, Pham Sanh Chau, said the company may increase its planned annual production capacity in India from 50,000 to 150,000 vehicles, given the stronger-than-expected initial demand.
Need to know
India’s central bank keeps interest rates unchanged. Sanjay Malhotra, governor of the Reserve Bank of India, said that although inflation moderated significantly in the first quarter, growth could decelerate in the second half of the financial year due to global trade uncertainties.
U.S. pharma tariffs spare India’s generic drugmakers — but leave investors jittery. Even though the latest U.S. pharmaceutical tariff did not impact Indian drugmakers, which mainly export generic drugs to the U.S., shares of most Indian pharma companies fell.
Qualcomm in talks with Tata to tap India’s chip capacity. Akash Palkhiwala, Qualcomm’s global chief operating officer and chief financial officer, said the company will look to tap India’s chip capacity as soon as it meets the company’s node requirements.
Quote of the week
We’re considering expanding our factory in India. The process of applying for environmentary clearances for the second phase is underway. The second phase is producing up to 150,000 vehicles a year. That’s thanks to the positive reaction from the market.
— Pham Sanh Chau, CEO, Vinfast Asia
In the markets
Indian stock exchanges were closed on Oct. 2 for Mahatma Gandhi Jayanti and Dussehra, with trading resuming Friday.
Coming up
October 3: India FX Reserve data
October 6: Tata Capital launches its 155 billion rupee IPO
October 7: LG Electronics India launches its 116 billion rupee IPO
October 7-9: Global Fintech Fest 2025 in Mumbai
Each weekday, CNBC’s “Inside India” news show gives you news and market commentary on the emerging powerhouse businesses and the people behind their rise. Livestream the show on YouTube and catch highlights here.
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