Team siliconindia

• Colocation and cloud services form the backbone of India’s digital economy
• Infrastructure focus on semiconductors, data centres, and hyperscalers
• Demand for data centres outpacing supply despite major capex growth

India's colocation and cloud services sector is emerging as a key pillar of the country's ambitious $1 trillion digital economy goal by FY2030. These services are driving the core infrastructure needed to support growing digital activity across businesses, government, and hyperscalers.

The digital economy's foundation is being built in layers starting with hardware infrastructure, including semiconductor and electronics manufacturing, and extending to data centres and cloud infrastructure that support massive digital workloads.

India is also strengthening its AI development and real world AI applications through foundational model layers and application layers, making the ecosystem more robust and future ready.

To keep up with demand, data centre investments are rapidly increasing. Capital expenditure is expected to grow from Rs 175 billion in 2024 to Rs 575 billion by 2030, reflecting a 23% CAGR. However, despite this growth, demand continues to outpace supply.

In the last year alone, data centre capacity rose from 75 MW to 114 MW, while demand surged even faster from 81 MW to 122 MW, marking a 50%+ increase in both.

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Enterprises, hyperscalers, and government bodies are increasingly depending on secure and scalable infrastructure to power India’s digital transformation. Cloud and colocation services are providing the backbone needed for seamless digital operations and real-time scalability.

As India moves towards becoming a global digital powerhouse, the rapid expansion of cloud and data infrastructure will be critical in supporting its growing economic and technological ambitions.