India's Data Centre Infrastructure Expansion
India's data centre capacity has experienced remarkable growth, increasing from approximately 375 MW in 2020 to 1.57 GW as of August 2026. This expansion is projected to continue reaching nearly 8 GW by 2030, representing massive infrastructure development to support the country's digital economy. The sector has attracted substantial investments with USD 70 billion already underway and an additional USD 90 billion in announced projects, reflecting strong investor confidence in India's digital infrastructure future.
Policy Support and Fiscal Incentives
The Government of India has implemented significant policy measures to support data centre growth. In the Union Budget 2022-23, data centres were included in the Harmonized List of Infrastructure, granting them infrastructure status that facilitates easier access to credit. The Union Budget 2026-27 introduced a tax holiday for eligible foreign cloud service providers using India-based data centre infrastructure, applicable from Tax Years 2026-27 to 2046-47 for notified foreign companies.
Supporting Ecosystem and Linked Schemes
Multiple government schemes support the data centre ecosystem development. The Semicon India Programme (Semicon 2.0) was approved by the Union Cabinet on July 15, 2026, with an outlay of ₹1,27,500 crore under the India Semiconductor Mission. The IndiaAI Mission received a total budget outlay of ₹10,371.92 crore to build a comprehensive AI ecosystem. The Electronics Components Manufacturing Scheme (ECMS) allocation increased from ₹22,000 crore to ₹40,000 crore, while PLI Scheme 2.0 for IT Hardware aims to create a robust domestic manufacturing ecosystem for servers and other IT hardware.
Infrastructure and Operational Details
The National Informatics Centre (NIC) has established state-of-the-art National Data Centres at its Headquarters in Delhi, Pune, Hyderabad, and Bhubaneswar, along with 37 smaller Data Centres at various State Capitals. These facilities support round-the-clock operations for government institutions with skilled onsite personnel. Data centres integrate computing, networking, power, cooling, security, and management systems to maintain reliable operations and data security for critical services including banking, e-Governance, digital payments, and cloud computing.
Energy and Sustainability Measures
With data centre electricity demand projected to reach 17 GW by 2031-32 according to the Central Electricity Authority, the government is promoting cleaner energy and efficient resource use. Initiatives include the Green Energy Open Access Rules, Green Energy Corridor Scheme, National Green Hydrogen Mission, National Programme on High Efficiency Solar PV Modules, and Solar Park Scheme. The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Act supports reliable nuclear power for emerging sectors including AI and data centres.
Efficiency Standards and Regulations
The Bureau of Indian Standards (BIS) technical committee LITD 31 has developed standards covering Power Usage Effectiveness (PUE), Carbon Usage Effectiveness (CUE), Cooling Efficiency Ratio (CER), and Water Usage Effectiveness (WUE). The Bureau of Energy Efficiency (BEE) has notified the Energy Conservation Building Code (ECBC) 2017 and Energy Conservation and Sustainable Building Code (ECSBC) 2024, which prescribe energy-efficiency and water-conservation norms for buildings including data centre infrastructure. Groundwater extraction for industrial purposes is regulated under guidelines issued by the Ministry of Jal Shakti.
Technological Advancements
AI infrastructure is driving adoption of advanced cooling technologies including direct-to-chip liquid cooling, adiabatic cooling, immersion cooling, and closed-loop liquid cooling systems. These technologies represent resource-efficient solutions for the growing data centre sector. The entire data processing chain from user request to response typically takes 1-2 seconds, enabled by security layers, load balancers, application servers, APIs, and database servers working in coordination.