India’s Data Center Capacity Set to Quadruple to 4 GW by 2030, Reports CareEdge Ratings

Mumbai, March 25, 2026: India’s data center industry is on the verge of a massive expansion, with capacity projected to reach approximately 4 GW by fiscal year 2030. According to a new report from CareEdge Ratings, this growth represents a fourfold increase from the 1.2 GW capacity recorded in 2025. This surge is expected to unlock an underlying investment potential of ₹1.5 lakh crore over the next five years, driven by rapid digitization, cost-competitive construction, and the accelerating adoption of Artificial Intelligence (AI).

Despite India’s growing digital footprint, the report highlights a significant infrastructure gap compared to global standards. Currently, India’s data center capacity per million internet users stands at just 1.2 MW, starkly lower than the world average of 5 MW per million users. While India has achieved digital parity with the world in terms of mobile and internet penetration, it currently holds only a 4% share of the global data center market. CareEdge Ratings suggests this disparity implies immense growth potential as the nation catches up to global infrastructure benchmarks.

The sector has already shown strong momentum, with co-location capacity doubling between FY22 and FY25. This growth has been met with high demand, maintaining utilization levels above 90%. Looking forward, the industry is expected to see a revenue Compound Annual Growth Rate (CAGR) of approximately 24% through FY30. While EBITDA margins are projected to remain stable between 40% and 42%, the report notes that leverage levels may remain elevated due to the high capital expenditure required during this intensive development phase.

Puja Jalan, Director at CareEdge Ratings, noted the industry’s current trajectory and the challenges ahead. “The industry is in an upswing with high capex, fundraising capability of strong sponsors and large equity investments targeted to the Indian Data Centre entities. The industry is likely to witness a revenue CAGR of 24% during FY26-30, with steady-state margins ranging between 40% and 42%. The AI-led demand shall catapult the growth story. However, power infrastructure support is critical to realise the industry’s potential. Also, the capability to manage cash flows amid rising costs and escalating commissioning timelines shall be key to sustenance,” Jalan stated.

The report also observes that construction and operational costs in India remain 30% to 40% lower than in China and the U.S., making the country an attractive hub for global hyperscalers. However, the cost of building these centers has risen by 50% to 70% recently due to higher land prices and investments in advanced cooling technologies and renewable energy. While commissioning timelines have faced some escalation, the shift toward green data centers is helping improve Power Usage Effectiveness (PUE) and align the industry with global sustainability goals.

Tej Kiran, Associate Director at CareEdge Ratings, highlighted the role of emerging technologies in sustaining this momentum. “Global AI investments have crossed nearly USD 1 trillion between 2020–2025, with India witnessing strong momentum supported by government initiatives. While data centre demand is currently driven by enterprise IT and cloud storage, AI-led workloads are expected to power the next phase of growth over the next 5–7 years, with the pace of adoption in India linked to the timely scaling of high-performance Graphics Processing Unit (GPU) availability,” Kiran added.

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