New Delhi, Nov 3 : India's data centre installed capacity is projected to increase five-fold to about 7.5 gigawatts (GW) by March 2030, attracting investments of more than Rs 3 lakh crore over the four fiscals, a Crisil report showed on Tuesday.
The surge is being driven by generative artificial intelligence (GenAI)-led computing demand, enterprise digitalisation and rising data consumption.
While long-tenor contracts with hyperscalers provide strong cash flow visibility, the pace of this expansion and credit quality of the data centre developers will hinge on timely power connectivity, regulatory approvals and disciplined project execution, said the report.
"India's structural cost advantages further strengthen its attractiveness as a data centre destination. Development costs are around one-fifth lower than in several competing Asia-Pacific markets owing to more competitive land, construction and labour costs," said Anand Kulkarni, Director, Crisil Ratings.
Combined with lower power tariffs, this translates into rentals that are 30-35 per cent lower than in peer markets.
The ability to develop large, renewable-powered campuses also aligns well with the sustainability goals of hyperscalers, reinforcing India's competitive positioning, he mentioned.
Nearly half of the upcoming capacity is already committed under long-term contracts, limiting speculative development and reducing offtake risk.
Upfront tie-ups with hyperscalers, driven by cloud adoption and compute-intensive GenAI workloads, provide revenue certainty from the outset. This helps de-risk projects, even as the scale and speed of the planned build-out intensify execution requirements, the report said.
About three-fourths of the upcoming capacity of 6 GW is expected to be built in Visakhapatnam, Mumbai and Hyderabad.
By fiscal 2030, data centre capacity in these cities could rise sharply and equate to around 80 per cent, 60 per cent and 20 per cent, respectively, of their current peak power demand.
This underscores the criticality of timely grid connectivity and transmission augmentation.
"The quality of contracted revenues has also strengthened. Contract tenors have lengthened to 15-20 years from 10-12 years earlier, enhancing cash flow visibility. Furthermore, high migration costs and rising replacement capex should support customer retention, although a meaningful contract renewal track record is yet to be established," said Nitin Bansal, Associate Director, Crisil Ratings.
