India's data centre industry is poised for significant growth as the government moves to resolve bottlenecks related to power, land, approvals and infrastructure, according to industry stakeholders who participated in a roundtable with Union Commerce and Industry Minister Piyush Goyal on Tuesday.

Industry representatives said several concerns were addressed during the meeting, while subcommittees have been formed to take up issues that require further discussion.

Government and industry collaboration

Devin Narang, Chairman of Turner & Townsend, a programme and project management consultancy, said representatives from different government departments and state governments participated in the meeting, helping resolve several concerns raised by the industry.

"A lot of issues were raised. A lot of issues were resolved by the minister on the spot, for example, power issues, ease of doing business and how we can expand this whole industry," Narang said.

He said subcommittees had also been created to deal with matters that could not be resolved immediately. "Subcommittees have been formed to further go into the details of what was not resolved on the table, and that will be resolved within a time-bound programme," he added.

Narang estimated that the data centre sector represented a USD 700-800 billion opportunity for India. He said the industry also raised concerns over the time taken to secure power connectivity, power surges and the availability of skilled manpower.

"As the data centre industry expands, we do not have the trained manpower. We are now exploring to see if we could set up centres in India where manpower could be trained to take up the necessary skills required for data centers," he said.

Rachit Mohan of JLL, a US-headquartered multinational company, said the discussions covered the entire chain needed for the development of data centres, including power infrastructure, land, construction and environmental approvals. He said the Union minister had outlined a vision of attracting USD 200 billion of investment into the sector.

Industry perspectives

Himani Agrawal, Chief Operating Officer at Microsoft India and South Asia, said the roundtable focused on making it easier to do business in the sector. She said Microsoft has the largest hyperscale infrastructure with four regions, and its latest region, Hyderabad, is AI-ready from day one.

Sudhir Prasad, CEO of Tower Vision India, said India's relatively competitive infrastructure and operating costs could support further growth of the industry. He said India, in terms of CAPEX and OPEX, both infrastructure cost and running cost, is amongst the lowest in the world.

The need to keep Indian data within the country also emerged during the discussions. Yogesh Kochhar, President of Yotta Foundation, said India needed to build greater domestic capacity for hosting sovereign data. He said the organisation was looking to host a sovereign data centre conclave and that Goyal had agreed to participate. Kochhar added that India currently has fewer data centres compared with developed markets.

Market projections

A report from JLL, published Wednesday, projected that India's data centre industry is expected to surge from 1.6 GW as of June 2026 to 6 GW by 2029, requiring about $110 billion in capital and driven by AI workloads and hyperscale cloud deployments. The report said the sector recorded 101 MW of absorption in the first half of 2026, exceeding the three-year H1 average by more than 20 per cent. Supply remained robust with 85 MW delivered during the period, primarily concentrated in Mumbai and Chennai. Accelerated pre-committed deliveries have driven vacancy levels to a record low of 2.8 per cent, reflecting exceptional market fundamentals.

Rachit Mohan, Managing Director, Data Centre Leasing, APAC, JLL, said: "India's data centre landscape is undergoing a fundamental transformation unprecedented in scale and ambition. The convergence of landmark tax incentives with massive hyperscale investments for AI-driven infrastructure requirements positions India as a strategic global hub for digital innovation." He added that the country is witnessing the creation of an entirely new digital infrastructure ecosystem that will reshape India's technology landscape and drive economic growth for decades.

The JLL report said global hyperscalers are fundamentally reshaping the market dynamics by committing to building nearly 30 per cent of new capacity through self-build facilities. Hyperscale self-build is expected to deliver 1.4 GW by 2029, with major investments transforming locations like Hyderabad and Visakhapatnam into gigawatt-scale hubs alongside established markets like Mumbai and Chennai.

The report also noted that the recent Union Budget's announcement of a 20-year tax holiday for foreign cloud service providers, extended until March 31, 2047, has dramatically accelerated investment commitments. This policy has attracted over $50 billion in foreign capital commitments and the initiative positions India as a global hub for routing global AI and cloud services while de-risking long-term capital deployment. The expansion demands $4 billion for real estate construction, $18 billion for mechanical, electrical, and plumbing infrastructure, along with $88 billion for IT equipment including servers and racks.

The JLL report further noted that the development of Small Modular Reactors (SMRs) by 2033 offers future potential for off-grid power solutions for large data centre campuses.