India's Data Centre Boom: A Digital Revolution Fueled by Cloud Storage and AI

India's data centre capacity is poised to more than double by 2026-27, driven by increasing digitalisation and investments in cloud storage, and fueled by the rise of Generative AI. This growth requires substantial capital investment supported by debt, driven by the need for infrastructure expansion.

India is on the brink of a significant data centre expansion, with total capacity expected to more than double to 2-2.3 GW by 2026-27, as reported by Crisil Ratings. This surge is largely fueled by the growing trend of digitalisation, prompting organizations to pour investments into cloud storage solutions.

The report also highlighted the role of Generative Artificial Intelligence (GenAI) as a medium-term driver for demand. To keep pace with this escalating need, data centre operators are likely to depend heavily on debt funding, resulting in an uptick in debt levels, albeit moderately.

With enterprises rapidly transitioning to digital platforms and the increased availability of high-speed internet fueling internet usage, the data centre sector is poised for substantial growth. As data centre operators expand both infrastructure and capability, the financial landscape is anticipated to stabilize with future investments and strategic growth plans.

(With inputs from agencies.)