India may attract $200 bn in data centre investment by 2030: Deloitte

Deloitte says India could see transformative data centre growth supported by policy and renewables, but warns that power supply, grid stability and planning gaps may constrain expansion

India is set to attract $200 billion investment in the creation of new data centre capacity by 2030, part of the larger $800 billion investment line-up in the Asia Pacific region, according to accounting and consultancy firm Deloitte Touche Tohmatsu.

 

“This is a huge economic opportunity for the region and for India. We are expecting 8-10 Gw of data centre capacity to be built in India in the next four years, but for that to happen, India will have to ensure there is sufficient power supply,” Will Symons, Asia Pacific Climate & Sustainability Leader at Deloitte, told Business Standard in an interaction. 

 

The firm on Thursday released a report on the data centre boom and stated that India’s expanding renewable energy base and clean power will play a major role in supporting the next phase of data centre growth, but power generation will have to keep up, so that there is no energy-supply gap. 

It said grid stability limitations and constrained substation capacity in high-growth corridors can be a major challenge for the plan. Also, longer development timelines for transmission upgrades and the lack of a unified national framework to support renewable integration for data centres can also pose a challenge. 

“All of this expected $200 billion data centre investments in India over the next four years will come in four to five states -- Maharashtra, Uttar Pradesh, Tamil Nadu, Karnataka, and Andhra Pradesh,” said Anish Mandal, Partner at Deloitte. 

He added that data centres alone will contribute more than 10 per cent of the peak power demand in each of these states through 2030, and if they are powered through renewable energy, which is infirm by nature, the country would need significant power system reliability planning to avoid grid instability. 

India contributed 20 per cent of the world’s data consumption but hosted less than 5 per cent of the world’s data centres. The drivers of data centre growth in India included sovereign data, rising AI use cases, expanded digital connectivity, enterprise cloud growth and regulatory adoption, such as the Digital Personal Data Protection (DPDP) Act. 

The Union Budget for 2026-27 proposed a tax holiday until 2047 for foreign companies providing cloud services to customers globally by setting up data centres in India. The government has also announced preferential tax treatment to further incentivise data centre development. 

“These measures have the potential to attract significant investment from global firms to supply digital demand in India and beyond its borders. Additionally, India has structural advantages in terms of lower construction costs, land rates, and power tariffs and the availability of an AI-skilled workforce,” the report said. 

India’s data centre capacity is expected to scale from 1.5 Gw in 2025 to 8-10 Gw by 2030, requiring an additional 40-45 terra-watt hour (TWh) of power in 2030, up from the 10-15 TWh of consumption in 2024. This would increase data centres’ electricity consumption from 0.8 per cent of total consumption to 3 per cent by 2030. 

Given the ongoing significant growth in power demand, a supply gap may emerge due to the anticipated rapid increase in data centres. Addressing this gap is critical to capture this transformative period’s economic and sustainability dividends, the Deloitte report said.