New Delhi, September 2026: India’s data-centre industry is entering a rapid expansion phase as artificial intelligence (AI), cloud computing and digital services drive demand for high-performance computing infrastructure.
India’s installed data-centre capacity has risen sharply from about 375 MW in 2020 to around 1.57 GW by August 2026, according to recent government and industry data.
AI Becomes a Major Growth Driver
The growing use of generative AI, machine learning and other high-compute applications is increasing demand for specialised data centres equipped with advanced servers, networking systems and cooling infrastructure.
The government has also expanded national AI computing capacity. Earlier this year, the Ministry of Electronics and Information Technology announced plans to add 20,000 GPUs to the existing national AI compute infrastructure.
Industry projections indicate that the expansion could continue at a much faster pace. JLL estimates that India’s data-centre capacity could increase from 1.6 GW in mid-2026 to 6 GW by 2029, supported by AI workloads and investment from global hyperscalers.
Billions of Dollars Flowing Into Infrastructure
Large technology and infrastructure investments are adding momentum to the sector. The Indian government has highlighted AirTrunk’s proposed investment of around ₹3 lakh crore ($30 billion) to develop up to 5 GW of data-centre capacity in India.
NTT DATA has also announced a $1.5 billion commitment over three years to expand AI-ready data-centre infrastructure in the country, targeting growing demand for local computing and secure data residency.
Power and Cooling Remain Key Challenges
The expansion of AI infrastructure also creates significant requirements for electricity, cooling and network connectivity. AI-focused facilities generally require more computing power and higher-density infrastructure than traditional data centres.
As a result, companies are increasingly examining renewable energy, advanced cooling technologies and locations with reliable power availability. Industry reports also point to the importance of grid capacity and water-efficient cooling as the sector scales.
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What Comes Next?
India’s AI data-centre expansion is likely to remain closely connected with the growth of cloud services, digital businesses and domestic AI development. Government initiatives such as the IndiaAI Mission, which has a ₹10,371.92 crore budget allocation, are also supporting the broader AI ecosystem.
With capacity expanding and major infrastructure investments being announced, data centres are becoming an increasingly important part of India’s digital economy. The next phase of growth will depend not only on building facilities but also on securing reliable power, efficient cooling, skilled talent and strong digital connectivity.
