India’s Data Centre Revenue Set to Reach Rs 20,000 Crore by FY28
India’s data centre industry is poised for explosive growth, with annual revenue projected to hit Rs 20,000 crore by fiscal year 2028, according to a new Crisil Ratings report. Major conglomerates including Tata, Reliance Industries, and Adani Group are leading massive billion-dollar investments in hyperscale data centre development.
Key Takeaways
- Data centre revenue expected to reach Rs 20,000 crore annually by FY28
- Industry to grow at 20-22% annual rate with capacity doubling to 2.3-2.5 GW
- Capital expenditure of Rs 55,000-65,000 crore projected from FY26 to FY28
- Major investments from TCS, Reliance, and Adani Group driving expansion
Unprecedented Growth Projections
Crisil Ratings forecasts that India’s data centre capacity will double to approximately 2.3-2.5 GW by March 2028. The sector is expected to maintain strong utilization rates of 90-95%, supported by robust demand and India’s relatively low data centre density compared to global standards.
“The incremental capacity of 1.1-1.3 GW estimated to be commissioned during fiscals 2026-2028 is expected to achieve timely tie-up backed by strong demand and India’s data centre density of just ~65 MW per exabyte, one of the lowest globally. This will translate into comfortable utilisation of 90-95%, in line with the past three fiscals,” said Anand Kulkarni, Director, Crisil Ratings.
Three Key Growth Drivers
The report identifies three primary factors fueling the data centre boom:
- Cloud Adoption: Enterprises increasingly shifting to public cloud services amid digital transformation
- AI Investments: Growing artificial intelligence applications requiring high-density computing infrastructure
- 5G Expansion: Proliferation of 5G technology driving demand for local data storage to support video streaming, gaming, and related services
Hyperscale Dominance
Hyperscale data centres with IT power capacity exceeding 5MW now represent over half of all capacity tie-ups. These large-scale facilities provide stable, predictable cash flows for operators while benefiting from strong bargaining power due to their scale.
Despite the rapid expansion, Crisil notes that pricing for new contracts has remained stable over the past two fiscal years and is expected to remain monitorable going forward.
Major Investment Moves
India’s largest corporate groups are making significant commitments to capture this growth opportunity. TCS recently announced an Rs 18,000 crore investment in partnership with TPG, while Adani Group has teamed with Google for a $15 billion data centre development in Andhra Pradesh. Reliance Industries has also formed partnerships with both Meta and Google to develop 1GW data centres across the country.
