India's data centre industry is poised for an unprecedented investment boom, with installed capacity expected to increase five-fold to around 7.5 gigawatts (GW) by March 2030, attracting investments of more than Rs 3 lakh crore over the next four financial years, Crisil Ratings said in a report on Tuesday.

The expansion, fuelled by generative artificial intelligence (GenAI), enterprise digitalisation and rising data consumption, is set to transform the country's digital infrastructure landscape.

However, the industry's ability to translate demand into sustainable returns will depend critically on timely power connectivity, regulatory clearances and disciplined project execution.

"Nearly half of the upcoming capacity is already committed under long-term contracts, limiting speculative development and reducing offtake risk," Crisil Ratings said. "Upfront tie-ups with hyperscalers, driven by cloud adoption and compute-intensive GenAI workloads, provide revenue certainty from the outset. This helps de-risk projects, even as the scale and speed of the planned build-out intensify execution requirements."

Strong demand from global hyperscalers, driven by cloud adoption and increasingly compute-intensive GenAI workloads, is also supporting investment decisions and reducing offtake uncertainty.

India's competitive cost structure is adding to its appeal as a data centre destination. Development costs are around 20 per cent lower than in several competing Asia-Pacific markets, reflecting relatively competitive land, construction and labour costs. Combined with lower power tariffs, this enables rental rates to be 30-35 per cent below those in peer markets. The availability of large campuses powered by renewable energy also strengthens India's proposition for hyperscalers seeking to meet sustainability commitments.

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