According to a Deloitte report titled “Attracting AI Data Centre Infrastructure Investment in India,” the country will need an additional 45-50 million square feet of real estate and 40-45 terawatt-hours (TWH) of power by 2030 to keep pace with the growing demand for Artificial Intelligence (AI) data centres. The report points to India’s cost-effectiveness, renewable energy capabilities, and strategic location as key advantages, but it also stresses the urgent need to address gaps in infrastructure, talent, and regulation to establish the country as a major AI hub.
The report identifies six essential factors for developing a world-class AI ecosystem: real estate, power & utilities, connectivity, compute infrastructure, skilled labor, and a robust policy framework. It suggests several policy changes, such as designating data centres as essential services, creating a specific category for them under the National Building Code, and setting up dedicated units to streamline approval processes.
Deloitte also suggests the establishment of specialized data centre zones, relaxing data localisation requirements, and revising regulations, such as amending provisions in the Bharatiya Nagarik Suraksha Sanhita (BNSS), 2023, and exempting data centres from the surveillance clauses in the Telecommunication Act, 2023. Additionally, the report proposes introducing safe harbour provisions for hosting providers and establishing ‘data embassies’ to encourage global investment.
However, the report cautions that the rapid growth of data centres could strain India’s power grid. It calls for a substantial increase in power generation capacity and greater integration of renewable energy sources. Connectivity issues, such as limited fibre infrastructure in rural regions and inconsistent high-speed internet, remain obstacles that need to be overcome.
Neha Aggarwal, Partner at Deloitte India, highlighted that for India to become a top destination for AI-driven data centre development, the country must focus on scalable infrastructure, advanced computing systems, and comprehensive policy reforms.
