- By Kamakshi Bishnoi
- Mon, 02 Feb 2026 10:24 AM (IST)
- Source:Jagran News Network
The rapid growth of India’s data centre industry reflects the strong momentum of the digital economy, which currently contributes nearly USD 500 billion, about 13 percent of the country’s GDP. By the financial year 2029-30, the digital economy is expected to contribute nearly 20 percent of national income, surpassing traditional sectors such as agriculture and manufacturing.
Data centres form the backbone of India’s digital ecosystem, supporting critical services ranging from e-governance and fintech to media streaming, e-commerce and advanced artificial intelligence (AI) workloads. In a major policy push to position India as a global data centre hub and achieve the vision of a developed nation, the central government has announced income tax exemptions for data centres until 2047. The move is expected to boost domestic infrastructure creation, attract foreign investment, generate employment opportunities and ensure that India’s data remains securely stored within the country.
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According to the Economic Survey 2025-26, rising data consumption, rapid cloud adoption and increasing use of AI are expected to significantly drive data centre demand. India’s data centre capacity is projected to rise from around 1.4 gigawatts in the second quarter of 2025 to nearly 8 gigawatts by 2030.
AI-focused data centres, which are high-performance facilities designed to handle intensive computing needs for artificial intelligence, machine learning and deep learning, are also expected to see strong growth. Despite generating nearly 20 percent of the world’s data, India currently hosts only about three percent of global data centres, highlighting the scope for expansion.
Gautam Buddha Nagar is emerging as a key hub in this expansion. Authorities have begun allocating land for data centre development, with the Yamuna Expressway Authority recently allotting five plots. The Greater Noida Authority has announced plans to allocate 13 plots, while the Noida Authority has reserved six plots in a designated sector for data centres.
Vipin Kumar Malhan, President of the Noida Entrepreneurs Association, said India’s data centre capacity is expected to grow nearly fivefold to about 8 gigawatts by 2030, adding approximately 6.4 gigawatts of new capacity over the next five years. He added that capacity could reach nearly 14 gigawatts by 2035, requiring investments exceeding USD 70 billion.
The Union Budget 2026 has further accelerated the sector’s growth by encouraging hyperscale data centres through concessional land allotments, tax exemptions and tariff waivers. Currently, India’s installed data centre capacity stands at around 1.5 gigawatts.
Dr Piyush Kumar Dwivedi, Chairman of the Uttar Pradesh Industry Trade Board, said Gautam Buddha Nagar has the potential to become the country’s leading data centre hub, aligning with India’s projected capacity growth from 1.4 gigawatts in 2025 to around 8 gigawatts by 2030.