From 375 MW to 1,575 MW: India's Data Centre Revolution Picks Up Pace

India's data centre industry is witnessing rapid expansion, driven by the country's accelerating digital transformation and the rising demand for artificial intelligence (AI) and high-performance computing infrastructure. According to the Ministry of Electronics and Information Technology (MeitY), installed data centre capacity has increased from 375 MW in 2020 to nearly 1,575 MW, underscoring the sector's remarkable growth.

The government said the expansion aligns with Prime Minister Narendra Modi's vision of democratising technology and strengthening the country's Digital India ecosystem. As businesses, cloud services and AI applications expand, demand for secure, scalable and energy-efficient data infrastructure continues to surge.

Unlike many infrastructure sectors, India's data centres are primarily developed, owned and operated by private companies. Investment decisions are guided by commercial factors such as projected demand, electricity availability, operational costs, skilled workforce and long-term business viability rather than government subsidies.

Major facilities are concentrated in Mumbai, Navi Mumbai, Chennai, Hyderabad, Bengaluru, Delhi NCR and Gujarat, while fresh investments are increasingly flowing into Andhra Pradesh, Madhya Pradesh, Chhattisgarh and West Bengal, signalling a broader geographical spread of digital infrastructure.

The government clarified that it does not provide subsidies for setting up data centres. Instead, the sector is attracting significant domestic and international investments based on market demand and India's growing digital economy.

Addressing sustainability concerns, MeitY highlighted that the industry's water consumption depends on the cooling technologies employed. Companies are increasingly adopting direct-to-chip liquid cooling, immersion cooling and adiabatic cooling, alongside emerging closed-loop liquid cooling systems designed for AI-driven computing.

The deployment of high-density server racks and advanced cooling solutions is improving Water Use Efficiency (WUE) while reducing both electricity and water consumption. Groundwater extraction for industrial use, including data centres, continues to be regulated under guidelines issued by the Ministry of Jal Shakti.

The information was shared by Minister of State for Electronics and Information Technology Jitin Prasada in a written reply in the Lok Sabha, highlighting India's growing readiness to support next-generation digital and AI infrastructure.