India Data Center Market

India Data Center Market Analysis

The India Data Center Market size is estimated at 3.31 thousand MW in 2025, and is expected to reach 6.69 thousand MW by 2030, growing at a CAGR of 15.11%. Further, the market is expected to generate colocation revenue of USD 2,337.9 Million in 2025 and is projected to reach USD 4,931.8 Million by 2030, growing at a CAGR of 16.10% during the forecast period (2025-2030).

The Indian data center industry landscape is undergoing a significant transformation driven by robust digital infrastructure development and supportive government policies. State governments are offering attractive incentives, including land value exemptions of up to 50%, complete stamp duty exemptions, and substantial reimbursements on interest payments. The Uttar Pradesh government, for instance, provides a 100% exemption on electricity and transmission charges to encourage data center growth in India. These initiatives have attracted major operators to establish large-scale facilities, particularly focusing on Tier 3 and Tier 4 data centers that offer enhanced reliability and disaster recovery capabilities.

The market is witnessing a substantial shift in data center industry trends and capabilities. Tier 3 data centers are experiencing remarkable growth, with operators increasingly investing in facilities that provide lower downtime and comprehensive disaster recovery solutions. As of 2022, there were 77 Tier 3 certified data centers in India, demonstrating the industry's commitment to maintaining higher operational standards. This trend is particularly evident in major metropolitan areas, where businesses are demanding more reliable and sophisticated data center solutions to support their digital transformation initiatives.

The streaming and digital content sector is emerging as a significant driver of data center growth. According to recent statistics, India's OTT market has achieved remarkable penetration with 423.8 million subscribers, including 119 million paid subscribers as of 2022. The competitive landscape in this sector is intensifying, with Disney+ Hotstar leading with over 40 million subscribers, followed by Prime Video with 20 million subscribers, and Netflix with 6.5 million subscribers as of October 2023. This surge in digital content consumption is compelling data center industry operators to enhance their infrastructure capabilities and expand their presence across strategic locations.

The industry is experiencing a notable trend toward sustainable and technologically advanced facilities. Data center operators are increasingly implementing innovative solutions such as fuel cell technology to reduce carbon emissions, as demonstrated by recent installations in Karnataka. The sector is also witnessing significant infrastructure developments, with the Department of Telecom authorizing comprehensive telecom development packages, including the installation of new 4G towers and extensive optical fiber networks. These initiatives are complemented by projects like the Kochi OFC Project, which involves installing 225 kilometers of optical fiber internet access, showcasing the industry's commitment to building robust digital infrastructure and data center future trends.

India Data Center Market Trends

Growth of telecom operators such as Jio, and others providing smartphones and internet services at resonable rates, it has boosted the data centers market

• Indian smartphone users are expected to grow from 794.4 million in 2022 to 1.2 billion in 2029 at a CAGR of 5.52%. Government initiatives such as the “Make in India” movement have offered incentives to the smartphone industry, which has resulted in India producing smartphones with specifications that run applications seamlessly and at an affordable cost.
• The growth of telecom operators, such as Jio, has revolutionized the internet industry with their packages at a reasonable cost. In addition to that, the data demand increased continuously, with the government encouraging digital payments and services online.
• With the launch of the 5G network in India, data consumption is expected to rapidly increase, as Indian users have a heavy inclination toward online OTT content, gaming, shopping, smart home automation applications, online security cams, etc., which is expected to further propel the demand for data centers.

Increasing household access to broadband and growing Internet exchanges are driving the market growth.

• A copper-based internet connection provides speeds of up to 300 Mbps whereas a fiber optic internet speeds are upto 10 Gbps. Earlier, the broadband network in India was more inclined toward copper cable connections. New innovations such as cloud technology have led to the adoption of fiber optic cables that offer higher speeds to move data stored in the cloud. Users are switching to fiber optic cables, which connect cloud servers with data centers. Hence, in terms of connectivity, the demand for copper cables is on the decline.
• Broadband connections rose from 6.1 crore in March 2014 to 81.62 crores in September 2022 growing by 1238%. The flagship BharatNet project is being implemented in phases to give broadband access to all 2.6 lakh Gramme Panchayats (GPs) in the country. Phase-I was finished in December 2017 and covered over 1 lakh GPs. As of October 2022, 6,00,898 km of Optical Fibre Cable had been laid under the project, 1,90,364 GPs had been connected by Optical Fibre Cable (OFC), and 1,77,665 GPs were Service Ready on OFC. Furthermore, 4466 GPs have been linked by satellite media. 1,82,131 GPs are ready to serve. This statistic shows an increase in broadband data usage.
• The growing urban population increasingly uses devices such as smart TVs, smartphones, and smart lighting systems, which has led to increased demand for higher bandwidth speeds that can only be achieved through the use of these fiber optic cables.

OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT

Segment Analysis: By Data Center Size

Mega Segment in India Data Center Market

The mega data center segment dominates the Indian data center market, accounting for approximately 42% market share in 2024, with an IT load capacity of around 836 MW. This segment's prominence is driven by major players like AdaniConneX, which is developing six mega-size DC projects across the country with a combined IT load capacity estimated to be 1 GW at full capacity upon completion. Additionally, other key players, including Sify, Yotta Infrastructures, CtrlS, and STT Telemedia, are actively developing mega data centers to meet the growing demand. The segment is also experiencing the fastest growth trajectory in the market, projected to expand at nearly 29% during 2024-2029, driven by favorable government policies and increasing demand for large-scale data processing capabilities. The size of the data center market is significantly impacted by these developments.

Remaining Segments in Data Center Size

The massive segment represents the second-largest category in the market, with facilities primarily concentrated in Mumbai, NCR, and Bangalore regions. These data centers cater to the growing demands of enterprise customers and cloud service providers. The large segment maintains a significant presence in the market, characterized by established operators like STT Telemedia, Reliance, and NTT Ltd. The medium and small segments, while smaller in scale, play crucial roles in serving specific regional markets and specialized customer needs, particularly in emerging tier-2 and tier-3 cities where demand for data center services market is gradually increasing.

Segment Analysis: By Tier Type

Tier 3 Segment in India Data Center Market

The Tier 3 segment dominates the Indian data center market, accounting for approximately 80% market share in 2024. This significant market presence is driven by the reliability and affordability factors that make Tier 3 data centers particularly attractive to businesses. Mumbai leads in hosting Tier 3 data centers with about 30% of facilities, followed by Bangalore at 17% and NCR at 16%. Major operators like STT Telemedia, NXTRA, and NTT Ltd have established a strong presence in this segment, with STT Telemedia operating 18 Tier 3 certified facilities. The segment's dominance is further reinforced by the ongoing construction of 25 new Tier 3 standard facilities across key locations, including Mumbai, NCR, Bangalore, Hyderabad, and Chennai.

Tier 4 Segment in India Data Center Market

The Tier 4 data center segment in India is experiencing the most rapid growth in the Indian data center market, projected to expand at approximately 30% CAGR from 2024 to 2029. This remarkable growth trajectory is primarily driven by increasing demand for high-reliability data center facilities with minimal downtime. Mumbai has emerged as the primary hub for Tier 4 data centers in India, hosting seven of the country's Tier 4 data centers. CtrlS has established a dominant position in this segment, operating 62% of the country's Tier 4 data centers, while other key players, including Equinix Inc., Pi, ST Telemedia, and Yotta Infrastructures, maintain a strategic presence. The segment's growth is further supported by the ongoing construction of massive and mega data center facilities by major operators like Equinix Inc. and CtrlS in Mumbai.

Remaining Segments in Tier Type

The Tier 1 & 2 segment represents the basic level of data center infrastructure in the Indian market. These facilities offer fundamental data center capabilities but with limited redundancy and reliability features compared to higher tier levels. While this segment continues to serve specific market needs, particularly for small and medium-sized businesses with basic hosting requirements, it shows minimal growth potential as businesses increasingly prefer higher tier facilities. The segment's limited expansion is evident in its concentrated presence in the NCR region, where two out of five Tier 1 & 2 data centers are located, with Go4Hosting maintaining a significant presence in this category.

Segment Analysis: By Absorption

Utilized Segment in India Data Center Market

The utilized segment dominates the Indian data center market, accounting for approximately 83% of the total IT load capacity in 2024. This significant market share is driven by the increasing adoption of smart devices and technologies by the growing urban population, coupled with the availability of low-cost bandwidth by new operators providing more bandwidth at competitive prices. The processing of massive amounts of data to deliver seamless experiences to Indian customers has triggered substantial growth in data center utilization across the region. Major sectors contributing to this high utilization include cloud service providers, BFSI, e-commerce, government services, and media & entertainment companies. The segment's growth is further supported by the rapid digitalization across industries, increasing demand for data processing capabilities, and the expansion of hyperscale facilities by major operators to meet the rising data consumption needs. The data center infrastructure market is significantly impacted by these trends.

Non-Utilized Segment in India Data Center Market

The non-utilized segment represents the available capacity in data centers that remains unused or reserved for future expansion. This segment plays a crucial role in the market as it provides the necessary buffer capacity for data centers to accommodate sudden spikes in demand and future growth requirements. Data center operators strategically maintain this non-utilized capacity to ensure they can quickly respond to increasing customer demands without compromising service quality. The segment is particularly important in emerging data center hotspots like Mumbai, Bangalore, and NCR, where operators are building massive facilities with phased utilization plans. This approach allows them to optimize their infrastructure investments while maintaining the flexibility to scale operations based on market demands and customer requirements.

Segment Analysis: By Hotspot

Free With This Report

We provide a complimentary and exhaustive set of data points on the country and regional level metrics that present the fundamental structure of the industry. Presented in the form of 50+ free charts, the sections cover difficult to find data on various countries on smartphone users, data traffic per smartphone, mobile and broadband data speed, fiber connectivity network, and submarine cables.