15 Sep 2025
Global backdrop
AI and cloud are the key drivers of data center capacity expansion going ahead. AI‑specific capacity may triple, driven by workloads that demand ~3–5× more compute and ~2–3× more power, leading to global DC capacity to potentially rise by ~70% by 2027. India’s data center capacity is also projected to nearly triple to 3GW by 2030.
What are the Key Growth Drivers?
1. Mobile Consumption & Data Growth
With over 850 million internet users and a mobile-first economy, India now accounts for 20% of global data demand. India’s mobile data consumption is among the highest in the world, with average usage per smartphone projected to reach 30–35 GB/month by 2030 which is currently 25-30 GB/month. Internet and smartphone penetration, the rollout of 5G, and a significant shift to cloud adoption are they key drivers. India is already among the world’s largest consumers of mobile data, and this trend is expected to accelerate.
2. AI and Digital Applications Fuel Demand
Artificial Intelligence is reshaping the data center landscape. India is the world’s second-largest user base for ChatGPT, and its AI market is expected to grow at 35% CAGR over the next three years.
3. Scope of growth in Cloud Industry
Global cloud industry stands at ~$920bn, it is expected to grow at 15% (CAGR) from FY25 to FY30, India’s cloud industry is expected to grow at 20%+ CAGR, leading to an expected catch-up in share in the global landscape.
4. Cost Efficiency and Competitive Edge
India offers one of the lowest data center setup and electricity costs globally—about 20%-30% lower than the US. This cost efficiency, combined with improving infrastructure, strengthens India’s position in the global data center market.
Yet, here’s the paradox: only 3% of that data is stored in Indian data centers despite India accounting for 20% of global mobile data consumption.
Government mandates such as the RBI’s data localization rules and the Digital Personal Data Protection Act 2023 are driving companies to store data within India. State governments are also offering incentives like lower electricity costs, tax breaks, and fast-track approvals, making India an attractive destination for data center investments.
The Next Decade Belongs to Data
On the valuation side, global data center companies are currently trading at 20–22x EV/EBITDA.
In India, currently there are no listed players, however you should continue to watch out this space
With strong policy support, technological advancements, and cost advantages, India is well-positioned to become a global data hub in the coming years. If you think the digital gold rush is over, think again. As data continues to grow in strategic importance, countries that can harness and manage it effectively will be better positioned to shape global outcomes. —and India has a timely opportunity to play a leading role in this evolving landscape.
Source: Ericsson, GSMA, Kantar, CNNIC, IAMAI, Avendus Spark Estimates, Nexdigm, BCG, JLL, Reuters, Cushman & Wakefield, The Gazette Of India, MeitY, Industry, Turner & Townsend, Bloomberg
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