India’s Data Center Capacity Seen Jumping Tenfold to 14GW by 2035

India’s installed data center capacity is projected to expand from about 1.5 gigawatts (GW) today to nearly 14GW by FY2035, marking an almost tenfold increase as artificial intelligence, cloud computing, and data-intensive applications reshape demand, according to a report by PwC.

The projected expansion implies a compound annual growth rate (CAGR) of 20-24% between 2025 and 2035, placing India among the fastest-growing data center markets globally. PwC estimates that supporting this scale-up could attract up to $70 billion in cumulative investment across facilities, power, cooling, and connectivity.

More than 90% of India’s current 1.5GW data center capacity is concentrated in major metro markets including Mumbai, Chennai, Delhi-NCR, Bengaluru, Pune, Hyderabad, and Kolkata. These locations have benefited from proximity to enterprise customers, early hyperscaler investments, and relatively stronger power and fiber infrastructure.

PwC said the next phase of growth will increasingly extend beyond metros, with Tier-II cities emerging as viable locations for edge facilities and AI training data centers.

Unlike latency-sensitive consumer applications, large-scale AI training workloads can operate farther from end users, provided they have access to reliable power, land availability, and high-capacity network backhaul.

The jump to 14GW of capacity is being driven by a combination of factors, including rising AI compute requirements, continued enterprise cloud migration, demand for low-latency digital services, and data localization requirements.

AI workloads, in particular, are pushing operators toward high-density facilities with greater power draw per rack and advanced cooling systems.

Policy momentum has also played a role. India’s evolving data protection framework and infrastructure-focused incentives at the state level have improved investor confidence, while several states have moved to streamline approvals and offer concessions on land and power tariffs for data center projects.

However, PwC cautioned that achieving the projected capacity will require greater regulatory and tax clarity. The report highlighted the need for comprehensive guidance on depreciation, income characterization, transfer pricing, and GST treatment across the data center project lifecycle.

The firm also called for data centers to be formally recognized as essential infrastructure, with assured access to green power and efficient cooling technologies to strengthen resilience and support environmental goals.

PwC concluded that coordinated execution at both the central and state levels will be critical if India is to translate rapid capacity expansion into a durable position as a trusted global hub for data storage, compute, and AI workloads.