Top News

India's data center market to hit $46B by 2033: KPMG
25 May 2026

India's data center industry is set to witness unprecedented growth, with revenue projected to reach nearly $46 billion by 2033, as per KPMG.

The surge will be driven by increasing artificial intelligence (AI) workloads and cloud adoption.

A recent KPMG report highlights the shift toward AI-optimized infrastructure in this sector. However, it also warns of execution complexities and calls for integrated lifecycle partners to meet the rising demand.

AI infrastructure driving data center growth
Market growth

The KPMG report, titled "India's Data Centre Revolution: The Integrated Lifecycle Blueprint (2026-2030)," predicts India's AI-optimized data center market will grow from $588.6 million in 2024 to $3.55 billion by 2030.

This represents a staggering compound annual growth rate (CAGR) of 35.1%.

The report emphasizes that the future growth of India's data center industry will be driven by AI infrastructure rather than just traditional cloud demand.

Need for domestic data centers
Infrastructure challenges

The KPMG report highlights a major challenge in India's data center industry: many older facilities still use legacy air-cooling systems.

These systems are not efficient enough to support high-density graphics processing unit (GPU) clusters required for AI applications.

The report emphasizes that with one billion internet users and rapid cloud adoption by businesses, building domestic data centers has become a necessity.

Integrated lifecycle partners needed
Execution strategy

The report identifies the complexity of execution as the biggest challenge in India's data center industry, rather than demand.

It says the sector currently relies on fragmented providers across construction, cooling, technology and operations.

To tackle this issue, KPMG has suggested an "integrated lifecycle partner" model where a single provider manages everything from land acquisition to AI deployment and compliance.

Impact of DPDP Act and ESG priorities
Regulatory impact

The KPMG report also highlights the impact of India's Digital Personal Data Protection (DPDP) Act on local infrastructure demand.

It says restrictions on cross-border data transfers are forcing global enterprises to set up physical data residency infrastructure in India.

The report also notes that environmental, social and governance (ESG) priorities are increasingly shaping investor sentiment, with operators focusing on renewable energy integration and sustainable infrastructure models to attract global capital.