The Government has released a comprehensive overview of India’s data centre infrastructure and the policy measures supporting its expansion. Data centres are the physical facilities that power online banking, government services, digital payments and cloud computing across the country. The backgrounder, released by the Press Information Bureau, explains how these facilities work and the government’s strategy to strengthen India’s digital backbone.
What Data Centres Do and Current Capacity
A data centre is a secure facility housing computing equipment, storage systems and networking hardware. It processes, stores and distributes large volumes of digital information round-the-clock without interruption. Inside these facilities, servers run applications, storage drives hold data, cooling systems maintain appropriate temperatures, power backup systems ensure continuous operation, and security systems protect against physical and digital threats.
India’s data centre capacity has grown significantly. Installed power capacity was around 375 MW in 2020. By August 2026, this had increased to 1.57 GW. The capacity is projected to reach nearly 8 GW by 2030. Investments of nearly USD 70 billion are already underway, with an additional USD 90 billion in announced projects.
The National Informatics Centre has established state-of-the-art national data centres in Delhi, Pune, Hyderabad and Bhubaneswar. It has also set up 37 smaller data centres across various state capitals to support government operations.
Government Policy Support
The Government has introduced several measures to encourage data centre investment. In the Union Budget 2022-23, data centres were given infrastructure status, similar to highways and airports. This grants easier access to long-term credit for digital infrastructure expansion.
The Union Budget 2026-27 introduced a tax holiday for eligible foreign cloud service providers until 2047. This applies to global operations using India-based data centre infrastructure and covers tax years 2026-27 to 2046-47 for notified foreign companies.
Related schemes supporting the sector include Semicon 2.0, approved with an outlay of 1,27,500 crore under the India Semiconductor Mission. The IndiaAI Mission was approved with a budget of 10,371.92 crore. The Electronics Components Manufacturing Scheme received increased allocation, rising from 22,000 crore to 40,000 crore. The Government also launched PLI Scheme 2.0 for IT Hardware to develop domestic manufacturing of servers and reduce import dependence.
Energy and Environmental Standards
As demand for data centre power could reach 17 GW by 2031-32, the Government is promoting renewable and clean energy. Initiatives include the Green Energy Corridor Scheme, National Green Hydrogen Mission and the SHANTI Act for nuclear power deployment. The Bureau of Indian Standards has developed efficiency standards measuring power usage, carbon emissions, cooling efficiency and water usage in data centres. The Bureau of Energy Efficiency has notified building codes prescribing energy and water conservation norms applicable to data centre infrastructure.
What this means for you
Faster, more reliable online services depend on India developing robust domestic data centre capacity. As these facilities expand with clean energy support, government services, banking, e-commerce and cloud computing will become more resilient and locally based. Investment in this infrastructure also creates opportunities for technology companies, skilled workers and semiconductor manufacturers across India.