India’s Data Center Demand to Double as APAC Powers Up
Moody’s says the country’s share of global capacity will climb alongside China’s, with fossil fuels meeting most needs in the near term
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Data center capacity in the Asia-Pacific is set to more than double by 2030, with artificial intelligence powering much of the buildout and India rapidly joining China as a major growth engine, Moody’s Ratings said in a report.
Moody’s Ratings projects the region’s share of global capacity will climb to about 41% from 37% in 2024, driven by rising technology adoption, policy reforms, and decarbonization goals in markets such as India.
Meeting the surge in electricity demand will require $90–$110 billion in utility spending on power generation, alongside major investment in grid and storage infrastructure.
Moody’s estimates power demand from APAC data centers will grow at a compound annual rate of 15%–20% over the next five to six years. Installed capacity is forecast to jump from 36 gigawatts (GW) in 2024 to 92 GW in 2030, spurring unprecedented investment in generation, transmission, and energy storage.
While China will lead the expansion, India’s data center industry is gaining momentum, fueled by digitalization, AI adoption, and a rapid rise in cloud usage.
The sector currently accounts for 0.5%–1% of India’s total electricity demand, a level similar to China’s, and could rise to 1%–2% by 2030.
State-run utilities such as NTPC and Power Grid are positioned to handle higher capital expenditure, supported by regulated tariffs and government backing. Even so, rapid expansion brings execution risks, including project delays, cost overruns, and short-term spikes in leverage, the report said.
The government is working to expand the grid, boost renewables, and push market reforms to ensure uninterrupted supply for hyperscalers and large corporations. Moody’s estimates that data center growth could drive investment in storage and transmission equivalent to 0.4%–0.9% of GDP over the next decade.
Many operators are signing long-term power purchase agreements for renewable energy, but with low-carbon sources still a small part of total generation, fossil fuels will meet most of the sector’s demand in the near term.
Advanced cooling systems, better facility design, and AI-enabled grid management are expected to curb the energy intensity of data centers. Moody’s projects average Power Usage Effectiveness to improve from 1.35 to 1.20–1.25 by 2030, reducing electricity use by 8%–12%. Singapore’s cap of 1.3 for new facilities could set a precedent for similar regulation in India.
Utilities are also turning to AI to forecast demand, manage grid health, and integrate renewables, steps that can lower costs and emissions. Still, widespread adoption of cleaner power will depend on regulatory clarity and incentives.
Moreover, policy-backed state utilities are better positioned to absorb the capital and execution risks of the sector’s rapid buildout, while smaller and private operators will need strong balance sheets and access to capital to compete.
Moody’s notes that India, like the wider APAC region, faces a choice between building clean, reliable power for its digital economy or risking higher emissions and grid strain. With the right mix of policy, innovation, and investment, the country could secure both economic growth and environmental gains in the data-driven decade ahead.
