October 4, 2025 — India’s data center industry is entering a period of rapid expansion, with both global companies and local investors racing to increase capacity to meet growing demand driven by digitalization and emerging technologies like artificial intelligence.
Currently, India’s total data center capacity is estimated at around 1.2 gigawatts (GW), but industry analysts expect this to more than double in the next five years, exceeding 3 GW. This growth is attracting international players such as Google and OpenAI, as well as prominent Indian business groups including the Adani Group and Reliance Industries.
Google has reportedly engaged with the Andhra Pradesh government to establish a 1 GW facility, while OpenAI has revealed plans to develop a similarly large data center hub in India. These ambitious projects highlight the increasing scale at which data centers are being built, moving from megawatt-scale setups to gigawatt-scale operations.
Beyond technology firms, real estate developers are also repositioning themselves to capitalize on this boom. Groups traditionally focused on residential and commercial properties, such as the Hiranandani Group and Panchshil Realty, are investing heavily to become key infrastructure providers for the country’s growing digital ecosystem.
The surge in data center demand is being driven by several factors. Enterprises currently account for the majority of data storage needs, but cloud providers and hyperscalers — companies that require vast computing power — are rapidly increasing their share. Artificial intelligence workloads are expected to significantly boost future demand.
Industry experts estimate that while enterprise demand will remain steady, hyperscalers’ requirements could rise to about 35% of the market, with AI-related data consumption growing by up to 25%. This shift is leading to the construction of larger facilities designed to handle much higher power loads.
India’s advantages include ample land availability, comparatively lower electricity costs, and expanding renewable energy sources, which are critical for powering energy-intensive data centers sustainably. However, the sector still faces hurdles, such as navigating complex regulatory processes involving numerous government approvals and acquiring large parcels of clear-titled land suitable for development.
Despite these challenges, Indian companies are aggressively expanding. Reliance Industries plans a massive 3 GW data center project in Gujarat, potentially investing billions of dollars. Adani Group’s data center arm, AdaniConnex, is scaling up rapidly, and smaller players like Anant Raj Developers are investing billions to grow their footprint.
As India’s economy continues to embrace digital transformation, the data center industry is poised to become a foundational part of the country’s infrastructure, supporting everything from online services to advanced AI applications.
Source: Intellectia
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