India is projected to require an estimated 45–50 million square feet of additional real estate and 40–45 terawatt-hours (TWh) of incremental power by 2030 to meet the growing demand for artificial intelligence (AI), according to Deloitte's latest report titled "Attracting AI Data Centre Infrastructure Investment in India." Poised to become one of the fastest-growing leaders in AI, India's AI market is expected to reach USD 20–22 billion by 2027, with a CAGR of 30 percent, Deloitte said. Despite hosting nearly 20 percent of the world's data, India has only 3 percent of global data centre capacity.
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AI data centre investments in India
The report, launched during a recent NITI Aayog workshop for states on accelerating AI data centre investments, highlights India's cost advantages, focus on renewable energy, and strategic location for data centre development. However, it warns that India's emergence as a global AI hub depends on bridging critical gaps in AI infrastructure, talent availability, and policy frameworks.
India's Growing AI Infrastructure Needs
As per Deloitte India's latest report, the country could require an additional 45-50 million square feet of real estate space and 40-45 Terawatt Hours (TWH) incremental power by 2030 to meet the growing demand for AI.
Six Pillars for AI-Ready Ecosystem
The report identified six pillars for India to reach its full potentital in building a world-class AI-ready ecosystem: real estate; power and utilities infrastructure; connectivity and network infrastructure; compute infrastructure; talent; and policy frameworks.
Deloitte has called for targeted interventions, such as creating a separate category for data centres in the National Building Code and recognising them under the Essential Services Maintenance Act, to incentivise specialised infrastructure development.
To streamline the deployment of data centres, the report recommends establishing dedicated data centre facilitation units to fast-track approvals. It also urges policymakers to support the sector through clearer data localisation norms and the creation of dedicated data centre zones.
Policy Reforms
"Additionally, amending data access provisions under the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023 to reflect data centres' operational realities and excluding data centres from surveillance scopes under the Telecommunication Act, 2023 will provide key policy support required for boosting India's data centre capacity," the report said.
"Moreover, implementing safe harbour rules for data hosting service providers and establishing data embassies will catalyse investment and spearhead India's data centre revolution," it added.
However, the rapid expansion of data centres is expected to put significant strain on India's power infrastructure. Deloitte underscores the urgency of investing in generation capacity, upgrading infrastructure, and integrating renewable energy sources to meet growing demand sustainably.
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Network and Connectivity challenges
Despite significant improvements, Deloitte said, India continues to face network and connectivity challenges such as limited fibre optic reach in rural areas, unreliable high-speed internet and high latency, which limit the country from realising its full potential in building data centres.
"Addressing these gaps through strategic investments in expanding fibre networks, improving last-mile connectivity and ensuring network redundancy is critical to enabling efficient data centre growth," the Deloitte report noted.
While India offers an advantage in data centre real estate with lower land and labour costs, significant new constructions are needed to meet the additional AI data centre capacity. The report highlights how rising interest in colocation models and government initiatives offering incentives under various state government data centre policies are helping drive growth.
From a policy perspective, the report suggests that introducing a separate category for data centres in the National Building Code and recognising them under the Essential Services Maintenance Act could further incentivise specialised infrastructure development.
Compute Infrastructure and GPU
Deloitte says Compute infrastructure is a critical component of AI data centre operations. To stay competitive, the report suggests that India must urgently boost Graphics Processing Unit (GPU) supply, promote GPU-as-a-Service (GPUaaS), and attract foreign investment to build Exaflop-scale capacity with high-performance GPUs.
"For India to accelerate its AI capabilities and realise its potential, it is necessary to introduce enabling policies to support the sector. India must develop its AI-ready infrastructure to meet this rising demand for data analytics and processing," said S Anjani Kumar, Partner, Deloitte India. "Moreover, strengthening research and development (R&D), improving talent pipelines, securing vernacular datasets and supportive policies will further accelerate the AI-driven growth. By addressing key areas of growth and investment and promoting stronger public–private partnerships, India can solidify its position as a global AI ecosystem leader."
"India's strategic location allows it to serve domestic and global markets effectively, positioning it as a critical node in the global data centre ecosystem," added Neha Aggarwal, Partner at Deloitte India. "However, India's vision to become a global AI hub demands a relook at the traditional data centre infrastructure. A greater focus on building high-performance compute infrastructure, scalable power and cooling systems and efficient networking infrastructure, with a reconsideration of policy framework, can make India a hotspot for AI-powered data centre development in the coming years."
NITI Aayog Workshop
Recognising the critical role of AI infrastructure in shaping India's economic future, the NITI Aayog Frontier Tech Hub hosted a high-level workshop on May 8, 2025, aimed at accelerating investments in AI-ready data centres across Indian states. According to NITI Aayog, the workshop brought together senior officials from key state governments, central ministries and industry leaders to chart a strategic roadmap for positioning India as a global hub for AI infrastructure.
Participants discussed the six essential pillars of AI data centre readiness—land, power, network, compute, talent, and policy—and emphasised the need for Indian states to compete not just domestically, but globally, as countries like Vietnam, the UAE, and Indonesia aggressively pursue AI investments.
