India Generates 20% of Global Data but Hosts Just 3% of Data Centres
India must address energy availability, infrastructure gaps and regulatory bottlenecks to scale its data centre ecosystem, the Economic Survey 2025–26 warns.
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India needs a more focused and deliberate strategy to scale its data centre ecosystem as demand from cloud computing and artificial intelligence accelerates, the Economic Survey 2025–26 has warned, pointing to infrastructure gaps and energy constraints that could slow growth.
Despite generating nearly 20% of the world’s data, India hosts only about 3% of global data centres, roughly 150 out of more than 11,000 worldwide, according to industry estimates cited in the survey.
“Driven by surging data consumption, rapid cloud adoption and the growing use of AI, India’s data centre capacity is projected to reach about 8 gigawatts by 2030, up from around 1.4 gigawatts as of the second quarter of 2025,” the survey said in its official release.
However, it cautioned that data centres are a “double-edged sword” due to their high power and water consumption. The expansion of AI-focused facilities has intensified pressure on electricity grids, placing data centres in direct competition with households and industrial users.
The survey noted that India is competing with emerging data centre hubs such as Malaysia, Japan and Vietnam, where policy support, energy availability and infrastructure readiness are improving rapidly. Addressing structural bottlenecks, particularly reliable and affordable power supply, will be critical if India is to attract global hyperscalers and AI-driven workloads.
Regulatory reforms were also flagged as a priority. The survey called for data centres and cloud service providers to be recognised as a separate infrastructure category rather than being treated as conventional commercial buildings.
Other recommendations included easier access to renewable energy for energy-intensive facilities, clearer tax rules for foreign entities hosting data in India, greater use of anonymised public data through digital public infrastructure, and more flexible visa regimes to attract specialised technical talent.
The survey described data centres as emerging sources of geostrategic leverage, comparable to critical minerals, and said India’s ability to scale this infrastructure would be central to its long-term digital competitiveness and position in the global technology value chain.
The Economic Survey 2025–26 was tabled in Parliament on Thursday. In a post on X, Finance Minister Nirmala Sitharaman said India had remained resilient despite global uncertainty.
“In a world defined by geopolitical fragmentation and economic turbulence, India stands as a global bright spot, resilient, stable and surging forward,” the Minister wrote.
Citing the First Advance Estimates, Sitharaman added that real GDP growth for FY 2025–26 is projected at 7.4%, reinforcing India’s position as the fastest-growing major economy for the fourth consecutive year.
“Our macroeconomic fundamentals are stronger than ever. We have successfully navigated global headwinds to place India on a high-growth trajectory, improving our potential GDP growth to 7 per cent,” the Minister posted.
