Indian data centre capacity forecast to reach 12GW
Author: Joe Peck
India’s operational data centre capacity is forecast to grow from 2.2GW in 2025 to 12GW by 2030, according to a new report from global research and consultancy firm Wood Mackenzie, highlighting continued investment driven by AI, cloud computing, and the country’s expanding digital economy.
The report, India’s Data Centre Landscape: Powering the Digital Economy, predicts a compound annual growth rate (CAGR) of around 40% over the five-year period. It also forecasts that AI-dedicated capacity will increase from 275MW in 2025 to 6,546MW by 2030.
Wood Mackenzie says rising demand from hyperscale cloud providers, enterprise digitalisation, and AI workloads is underpinning the rapid expansion of the sector.
Power availability shapes future investment
India’s digital economy, valued at ₹32 trillion (£250 billion) in 2025, is contributing to increased demand for digital infrastructure. According to the research, the country has more than 1.03 billion active internet users and processes around 22 billion UPI transactions each month.
The report forecasts that data centre electricity demand will increase from 10TWh in 2025 to around 20 times that level by 2040, accounting for approximately 7% of the country’s total electricity demand.
Whilst Maharashtra and Tamil Nadu currently account for around 65% of installed IT load, Wood Mackenzie expects future growth to extend across Andhra Pradesh, Telangana, Uttar Pradesh, and Karnataka. The report notes that both international hyperscale providers (including Amazon Web Services and Google) and domestic operators (such as AdaniConnex) are investing in new capacity.
Souhardya Pal, Research Associate at Wood Mackenzie, says, “India’s data centre market becomes a structural investment thesis. The convergence of hyperscale capital, AI workload growth, and a decade of policy support have created the conditions for India to rival any market in Asia-Pacific.
“The question for developers and investors is no longer whether to enter India, but where and how.”
Water and infrastructure remain key considerations
The report identifies reliable, cost-effective power as the primary factor influencing new data centre developments, ahead of land availability and capital. It highlights captive power generation and long-term renewable power purchase agreements (PPAs) as increasingly common strategies for securing electricity supplies.
Wood Mackenzie also highlights water availability as an emerging consideration, particularly as higher-density AI deployments increase cooling requirements. According to its research, developers are increasingly adopting closed-loop cooling systems and zero liquid discharge technologies to reduce freshwater consumption.
Rashika Gupta, Vice President of Research at Wood Mackenzie, explains, “Land and capital are no longer the limiting factors for data centre developers in India. What determines site selection and delivery timelines now is access to firm, round-the-clock power at the node level.
“Developers who secure their power strategy early, through captive generation or long-term renewable PPAs, will lock in a structural cost and sustainability advantage for the life of their assets.”
