India Data Center Market Sees Rapid Domestic Expansion

India’s data centre industry is undergoing a transformational phase in 2024–2025, rapidly expanding capacity and attracting global and domestic investment to support surging cloud and AI demand.

Latest Developments (2024–2025)

Recent dynamics illustrate India’s ascent as a major data centre market:

• Google plans to invest $6 billion to build a 1-gigawatt data center along with supporting power infrastructure in Andhra Pradesh, marking Alphabet’s first such project in India, according to government sources. The facility will be located in the port city of Visakhapatnam, with $2 billion of the total investment allocated for renewable energy capacity to power the center, two officials from the Andhra Pradesh government told Reuters.

• Ashish Arora, CEO of Airtel’s data center arm Nxtra, told the Financial Times that the company plans to invest approximately $600 million in its latest expansion phase, aiming to reach nearly 400 megawatts of capacity by the end of 2027.

• Anant Raj Ltd. intends to invest 180 billion rupees ($2.1 billion) in data centers, joining a wave of Indian companies capitalizing on the surging demand for artificial intelligence and business process services. The Delhi-based developer, valued at $2.3 billion, plans to launch two additional data centers in Haryana, complementing its existing operational facility. The company is targeting a total capacity of just over 300 megawatts by 2032, according to Managing Director Amit Sarin.

India's Data Centre Surge Driven by Domestic Demand

• Only 40% of the shared data centre capacity was utilized by international cloud service providers, while the remaining 60% was consumed by Indian enterprises. Among domestic users, the financial sector accounted for 90% of the usage, leading the way in adopting new technologies and AI to enhance customer experiences.

• India’s average monthly data usage per user nearly doubled to 21.1 gigabytes over the five years leading up to 2024. During this time, the country’s data centre capacity rose from 590MW to 1.4GW and is projected to exceed 9GW by 2030.

Airtel Cloud Boosts India’s Data Centre Capabilities

Bharti Airtel’s digital subsidiary, Xtelify, has launched Airtel Cloud — a sovereign, telco-grade cloud platform tailored for Indian enterprises. Built entirely in India and hosted across advanced domestic data centres, the platform is designed to address the growing need for secure, scalable, and cost-efficient cloud solutions.

Airtel Cloud is designed to handle up to 1.4 billion transactions per minute, showcasing its robust processing capabilities. A key advantage it offers is up to 40% optimisation in total cost of ownership (TCO), a major priority for both enterprise and government stakeholders in India. In response to growing regulatory focus on data localisation, the platform ensures full data and control plane sovereignty, aligning with the requirements of the Digital Personal Data Protection (DPDP) Act.

The launch represents a significant milestone in Airtel’s ongoing strategy to equip Indian enterprises with advanced digital solutions. Vittal also emphasized the platform’s AI-readiness and smooth integration features, which are set to drive innovation, enhance agility, and support sustained growth for businesses undergoing digital transformation.

Xtelify’s Strategic Global Expansion and Product Launches

• Strengthening the Ecosystem through Partnerships:

Xtelify has forged key global alliances with major international telecom operators to bolster its ecosystem.

• Collaborations with Global Players:

Notable partnerships include Singtel (Singapore), Globe Telecom (Philippines), and Airtel Africa, reflecting Xtelify’s ambition to expand its home-grown platforms internationally.

• AI-Powered Software Suite for Telecom:

Alongside Airtel Cloud, Xtelify has introduced an AI-driven software suite specifically designed to support telecom businesses across global markets.

As data sovereignty and technological independence gain prominence as national priorities, Airtel Cloud stands out as a timely and powerful solution. Developed in India for Indian needs, the platform underscores Airtel’s dedication to promoting digital self-reliance and solidifies its leadership in the cloud services space.

Key factors driving geographic diversification of data centres

India’s data centre infrastructure has traditionally been centered in major metropolitan hubs such as Mumbai, Chennai, Bengaluru, Hyderabad, and Delhi. However, the rising demand for real-time data processing and seamless digital access is now shifting focus toward Tier II and Tier III cities. Companies like CtrlS are at the forefront of this transition, establishing edge data centres in smaller cities to support the need for a more geographically dispersed and resilient network.

Key Players in India’s Data Centre Ecosystem

• Google / Alphabet Inc.

  • Role: Global technology giant making its first data centre investment in India.

  • Project: $6 billion investment in a 1-GW data centre in Visakhapatnam, Andhra Pradesh, with $2 billion allocated for renewable energy infrastructure.

  • Significance: Marks a major global commitment to India's digital future, driven by cloud, AI, and data localisation demands.

• Bharti Airtel / Xtelify / Nxtra Data

  • Role: One of India’s largest telecom and digital service providers.

  • Project: Launch of Airtel Cloud, a sovereign, telco-grade platform built in India. Operated via Nxtra Data, Airtel’s data centre arm.

  • Investment: Nxtra to invest $600 million to scale capacity to nearly 400 MW by 2027.

  • Significance: A major domestic player offering sovereign solutions aligned with the DPDP Act and AI-readiness for Indian enterprises.

Conclusion:

India’s data centre ecosystem is undergoing a transformative phase, fueled by rising digital consumption, AI-driven innovation, and robust domestic investments. The entry of global giants like Google and the proactive efforts of local players such as Bharti Airtel, Xtelify, and Anant Raj Ltd. signal a maturing infrastructure landscape poised for sustainable growth. With increasing emphasis on data localisation and digital sovereignty, India is well on its way to becoming a global fdata centre hub.

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