India Seeks to Enhance Global Data Centre Market Share Amid Escalating Gulf Tensions

India's Data Centre Market Poised to Benefit from Global Hyperscalers' Shift

India's data centre market is expected to receive a boost as global hyperscalers and data centre operators look to diversify their infrastructure footprint in response to geopolitical tensions in the Gulf region.

India's Data Centre Capacity to Reach 4 GW by 2030

India's data centre capacity is projected to reach 4 GW by 2030, driven by large-scale capacity additions in major markets, particularly the Mumbai Metropolitan Region (MMR). Developers are expected to invest $20 billion in onstreaming capacities, with $7.1 million per megawatt of capacity excluding land costs.

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

Hyperscalers and Pure-Play Data Centre Players to Benefit

Hyperscalers such as Google, Microsoft, and Amazon Web Services (AWS), as well as pure-play data centre players promoted by major conglomerates, real estate developers, and large funds, such as Blackstone and Brookfield, are expected to benefit from the shift. Large data hyperscalers also depend on capacities by data centre operators due to computing needs for generative AI applications and cloud.

India Offers Scale and Long-Term Stability

India offers both scale and long-term stability, making it a natural destination for the next wave of investments. The country's scale of digital consumption, expanding fibre connectivity, and growing ecosystem of technology companies make it a natural hub for long-term data centre investments.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

Gulf Countries' Data Centre Ambitions Damaged

Recent attacks by Iran on data centres in the Gulf region have damaged the ambitions of countries such as the UAE and Saudi Arabia, which have been attracting data centre investments due to their relative ease of doing business, cheap electricity, and ample availability of land.

India's Competitive Landscape

India's cost of construction is 40-45% cheaper compared to the world average, and electricity costs are $0.08 per kilowatt hour, making it a competitive destination for data centre investments. The country's favorable government policies, including tax holidays and land incentives, are also expected to attract investments.

Key Players and Initiatives

• Hiranandani Group: Chairman Niranjan Hiranandani expects data infrastructure to become strategic infrastructure in the digital economy.
• Godrej Enterprises Group: Business head Raghavendra Mirji views India as a strategic location for data infrastructure in the Asia-Pacific region.
• PwC: A 2025 report noted that industrial land in Saudi Arabia costs between $10 and $50 per square metre, compared to $150-$600 per square metre in areas of the US such as northern Virginia.