India Data Center Market Report

India Data Center Market Size and Share:

The India data center market size was valued at USD 5.03 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 12.85 Billion by 2033, exhibiting a CAGR of 10.43% from 2025-2033. The market share is expanding, driven by the growing adoption of digital technologies in several industries, such as e-commerce, banking and healthcare, rising supportive policies by governing agencies, and heightened traction of cloud-based services across the country.

One of the prominent trends in the Indian data center industry is the large-scale growth of hyperscale data centers. International cloud service providers are heavily investing in building massive-scale facilities. Hyperscale centers need to handle huge amounts of data and deliver scalable resources to enterprise customers. To enhance data processing rates and low latency, there is a rise in the installation of edge data centers. These are smaller in size but strategically placed nearer to end-users in tier-2 and tier-3 cities. Smart city initiatives, Internet of Things (IoT) technologies, and autonomous technologies in industries like manufacturing and transportation are fueling this movement. Edge infrastructure enables localized storage and processing of data and ensures real-time decision-making and optimal resource utilization.

5G technology deployment is anticipated to transform India's digital landscape. 5G will facilitate a new generation of products like virtual reality (VR), augmented reality (AR), smart factories, and connected devices with its high-speed, low-latency functionality. These technologies demand real-time processing of data, thereby catalyzing the demand for solid edge and core data center infrastructure. The banking, financial services, and insurance (BFSI) industry and over-the-top (OTT) media platforms are two of the biggest users of data center services. As digital transactions increase, cybersecurity issues, and content streaming requirements, these industries are heavily investing in secure and scalable data hosting solutions. Fintech innovations and customized streaming experiences are further contributing to data processing requirements.

India Data Center Market Trends:

Government Initiatives

Favorable initiatives by the Government of India, which include Digital India and Make in India, are fueling the market growth. These steps are intended to enhance the country's digital infrastructure, develop digital services, and attract investments from the different industries. Moreover, Government contributions for developing data center parks and tax incentives for data center operations are fueling the India data center demand. Apart from this, there is an increase in the use of digital technologies in various sectors, including e-commerce, banking, healthcare, and government services. The India Brand Equity Foundation (IBEF) states that the Indian e-commerce will grow to USD 163 Billion in 2026 at a compound annual growth rate (CAGR) of 27%.

Growing Volume of Data

The rising need for data centers to handle, process, and store data as various firm and adoption of digitalization in numerous industries is strengthening the India data center market growth. Apart from this, the growing internet penetration and mass dependence on cellphones, which are producing enormous volumes of data, are having a positive influence on the market. The report presented by the Internet and Mobile Association of India (IAMAI), stated that India’s internet users increased 900 million by 2025, caused by the heightened usage of India languages in online content. The Internet in India Report 2024 exposed the fact that active internet users increased to 886 million in 2024, an 8% YoY growth. Rural India was driving this momentum, with 488 million users, and making up 55% of the internet population. Indic languages like Tamil, Telugu, and Malayalam were defining internet consumption, and 98% of users are viewing content in these languages. Surprisingly, 57% of urban internet users also watch regional language content.

Adoption of Cloud Services

The increasing adoption of cloud services by different industries is providing a favorable India data center market outlook. Cloud services offer various benefits, including storage, data analysis, and scalable infrastructure, which is contributing to increased business adoption. This cloud-based shift is catalyzing the demand for data centers that can provide reliable and secure cloud services to individuals and businesses. According to the statistics presented by the NASSCOM and Oliver Wyman studies, cloud computing would contribute 8% of India's GDP by 2026. It could create 14 million new jobs and enhance the GDP of the country by USD 310–380 billion by 2026. India could potentially leverage the full potential of the cloud sector with a focused, all-out effort if it can continually grow cloud investment by 25–30% for the next five years (2022–2029) to USD 18.5 billion.

India Data Center Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the India data center market, along with forecasts at the country and regional levels from 2025-2033. The market has been categorized based on application, type, component, and size.

Analysis by Application:

• Banking Financial Services & Insurance (BFSI)
• Government
• IT and Telecom
• Media
• Retail
• Manufacturing
• Others

The IT and telecom sector represents the largest segment primarily due to the exponential growth in data traffic, driven by increased smartphone usage, internet penetration, and the rapid adoption of cloud services across the sector. As per Internet and Mobile Association of India (IAMAI), 56% of newly connected Indians would reside in rural areas by 2025. Telecommunication companies and IT service providers are heavily investing in expanding their data center capacities to handle this surge in data, and to support emerging technologies, such as 5G, IoT and artificial intelligence (AI). The robust infrastructure requirements of these technologies are catalyzing the demand for advanced data centers.

Analysis by Type:

• Enterprise Data Centers
• Colocation Data Centers
• Edge Data Centers
• Hyperscale Data Centers

Enterprise data centers primarily serve the needs of a single organization, providing tailored infrastructure to support their specific data and processing requirements. These data centers are often built and maintained by the businesses themselves, allowing complete control over their data operations and security. The segment is significant in India due to large corporations and government organizations opting to manage sensitive data in-house.

Colocation data centers offer space, equipment, and bandwidth for rental to multiple tenants, who can benefit from shared infrastructure while maintaining control over their own servers and storage. This segment is growing in India as SMEs seek cost-effective, scalable solutions without the burden of building and managing their own data centers. Colocation provides businesses with the flexibility to scale up or down based on their needs and the advantage of advanced facilities, typically including robust security measures, reliable power supplies, and high-bandwidth connectivity.

Edge data centers are smaller facilities located close to the point of data utilization to reduce latency and bandwidth use in communications. This type is increasingly relevant in India due to the rapid expansion of IoT applications and mobile computing, which demand real-time processing and analysis, thereby driving the India data center market demand.

Hyperscale data centers are massive facilities built by major cloud service providers and large tech companies to support extensive cloud computing resources. These data centers are characterized by their vast size, scale, and efficiency, designed to manage enormous quantities of data and provide extensive computing services to thousands of users simultaneously.

Analysis by Component:

• Hardware
• Software
• Service

Hardware dominates the market as per the in the India data center market overview, driven by the essential requirement for robust physical infrastructure. It consists of servers, network equipment, cooling systems, storage devices, which are necessary for effective functioning of data centers. The growing need for high functioning computing hardware in numerous sectors, including information technology (IT) and banking, is bolstering the market growth. According to IBEF, in FY22, the IT sector generated 7.4% of India's GDP and by 2025, it is projected to contribute to 10%. Moreover, major companies are investing in this to improve their processing power and storage capacities.

Analysis by Size:

• Small Data Center
• Mid-Size Data Center
• Large Data Center

The small data center segment caters primarily to small and medium-sized enterprises (SMEs) that require limited data processing capabilities. These data centers are cost-effective and occupy less space, making them suitable for businesses with modest IT resource demands. They often support operations that do not require the extensive infrastructure and massive power supply associated with larger data centers. The growth in this segment is fueled by the increasing number of startups and small businesses in India seeking digital transformation without the need for extensive capital investments in IT infrastructure.

Mid-size data centers are ideal for businesses that are experiencing growth and need more capacity than small data centers but do not require the vast scale of large data centers. This segment provides a balance between scalability and manageability, offering more resources and capabilities than small data centers, with better cost-efficiency compared to large facilities. They are popular among medium-sized enterprises and are often utilized for regional service delivery or as disaster recovery sites. Mid-size data centers significantly contribute to the India data center market revenue, serving as a strategic choice for medium-sized enterprises seeking a balance between scalability, manageability, and cost-efficiency.

The large data center segment includes facilities that serve large corporations and cloud service providers that demand high volumes of data processing and storage. These data centers are characterized by their extensive use of cutting-edge technology, high energy consumption, and notable space requirements. They are designed to handle massive loads with high efficiency and reliability, often supporting critical operations across various sectors, including banking, IT, and telecommunications. The growth in this segment is driven by the increasing adoption of big data analytics, AI, and machine learning (ML) technologies, which require substantial computational power and data storage capabilities.

Regional Analysis:

• Maharashtra
• Tamil Nadu
• Uttar Pradesh
• Gujarat
• Karnataka
• West Bengal
• Rajasthan
• Andhra Pradesh
• Telangana
• Madhya Pradesh
• Delhi NCR
• Punjab
• Haryana
• Others

In 2024, Maharashtra accounted for the largest market share. Some of the factors driving the Maharashtra data center market in India included the government's focus on digital transformation, the increasing adoption of cloud computing, and the expanding e-commerce sector. Universities in Maharashtra are also collaborating with data center companies to develop qualified talent in Web 3.0 technology. By working together on collaborative projects, they hope to improve research, education, and skill building in the area, providing pertinent instruction and training to empower people in the Web 3.0 sphere. Moreover, various new data centers are opening in the state, providing opportunities to people and companies. For instance, in 2025, NetSuite, the US-based cloud-based enterprise software firm that deals in products and services for small and medium enterprises (SMBs), launched data centers in Mumbai and Hyderabad. The intention is to enable its growing list of customers in India and give it a further global presence.

Competitive Landscape:

Major market participants of the India data center market are investing heavily in infrastructure development, sustainability, and strategic alliances to better their business ventures. Large-sized hyperscale data centers are being built by the companies to take advantage of cloud services' high demand. Green energy solution investments, such as solar energy and wind energy, are given top priority so that energy is efficient and aims to be ecologically friendly as well. Leading companies are also moving into tier-2 cities with edge data centers to minimize latency and cater to emerging markets. Moreover, collaborations with international cloud providers, telecommunication firms, and real estate developers are facilitating integrated solutions and quicker market entry. Players are emphasizing automation, AI-driven monitoring, and cybersecurity improvements to provide high-performance and secure data services. These initiatives are intended to position themselves competitively in a rapidly digital and regulated environment.

The report provides a comprehensive analysis of the competitive landscape in the India data center market with detailed profiles of all major companies, including:

• Adani Group
• Arshiya Limited
• CTRLS Datacenters Ltd.
• Equinix Inc.
• ESDS Software Solution Ltd.
• NetDataVault (NGBPS Limited)
• Nikom InfraSolutions Pvt. Ltd.
• Nippon Telegraph and Telephone Corporation
• Nxtra Data Limited (Bharti Airtel Limited)
• Sify Technologies Limited
• Sterling and Wilson Pvt. Ltd.
• Web Werks India Pvt. Ltd.

Latest News and Developments:

• January 2025: Reliance Industries announced plans to build the world’s largest data center in Jamnagar, Gujarat. Partnering with Nvidia for AI infrastructure, the facility will use Blackwell AI processors and support India’s AI ambitions, aligning with the government's USD 1.16 Billion investment in AI development.
• November 2024: Colt Data Centre Services and RMZ Corp formed a joint venture to invest USD 1.7 Billion in India's digital infrastructure. The partnership will develop over 250MW of data center capacity in Navi Mumbai, Chennai, and a third location, driven by rising demand from AI and cloud adoption.
• October 2024: RackBank announced an 80MW AI-optimized data center in Indore, Madhya Pradesh. The facility will feature flexible rack densities from 50kW to 150kW and aims for a PUE between 1.1 and 1.3. Backed by state incentives, it positions central India as a growing digital infrastructure hub.
• June 2024: Indian data center firm Yotta, a unit of Hiranandani-owned Nidar Infrastructure Limited, announced a SPAC merger with Cartica Acquisition Corp to go public on Nasdaq. Valued at USD 2.75 Billion, Yotta operates AI-focused data centers and aims to expand its 33MW capacity to 890MW.
• April 2024: AdaniConneX, a joint venture between Adani Group and EdgeConneX, secured up to USD 1.44 Billion for data center construction in India. With an initial USD 875 Million commitment, the funding supports sustainable development using renewable energy and advanced technology.

India Data Center Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the India data center market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the India data center market.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the India data center industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.