AI demand and data localization driving India's data centers growth
India's data centers are about to get a major upgrade, thanks to the rising demand for AI and cloud computing.
The Ministry of Electronics & IT reported capacity to jump from 375 MW in 2020 to over 1,500 MW by 2025, and Morgan Stanley says it could hit 10.5 GW by 2031.
With new laws pushing for local storage of user data, India is quickly becoming a key spot for global AI development.
India's budget offers 20-year tax holiday
Major companies are pouring money into this space: Adani Group plans $100 billion for renewable-powered, AI-ready centers by 2035, while Reliance is investing $120 billion in digital infrastructure.
Tech giants like Google, Microsoft, and AWS are expanding fast too.
Plus, India's Union Budget 2026-27 offers a 20-year tax holiday for foreign cloud service providers operating workloads from Indian data centers for overseas customers, while its draft Data Center Policy offers faster approvals, potentially attracting up to $200 billion in investment and making India a top hub for AI and cloud tech.