India’s data centre capacity may increase to between 5 GW and 8 GW by 2030 from around 1.5 GW currently, driven by growing demand for digital infrastructure and capacity constraints in West Asia, according to global brokerage Bernstein.

The brokerage said access to land and power infrastructure is likely to emerge as the most critical factor for data centre operators, outweighing the importance of computing hardware in determining long-term competitiveness.

Bernstein noted that competition for land is intensifying in key markets such as Navi Mumbai, where developers are seeking sites with access to substations and grid connectivity. Companies that have already secured large land parcels and power infrastructure are expected to be better positioned to benefit from the anticipated expansion of the sector.

According to the brokerage, data centre capital expenditure in India, excluding computing equipment, stands at around Rs 50 crore per MW, lower than comparable costs in the US. Bernstein expects most Indian operators to adopt the colocation model, under which companies build and lease data centre infrastructure to hyperscalers and enterprises that deploy their own computing equipment.

The brokerage said operators that own and rent out GPU clusters can generate higher revenue per MW but face significantly higher capital requirements, shorter contract durations and greater technology obsolescence risks.

Power Availability To Play Central Role
Drawing comparisons with major US data centre hubs such as PJM and ERCOT, Bernstein said access to reliable power, lower land costs and faster grid connections were key drivers of growth. However, increasing demand has led to longer interconnection timelines in those markets, making access to dispatchable power a critical differentiator.

Bernstein highlighted the Adani Group’s presence across renewable energy, thermal power generation, transmission infrastructure and land holdings, describing its position in the sector as strong. The brokerage also pointed to Reliance Industries’ land bank in Gujarat and Navi Mumbai as a potential advantage as demand for data centre capacity grows.

The brokerage added that even cryptocurrency miners with power off-take agreements are increasingly exploring data centre colocation opportunities, reflecting the growing importance of electricity access in the sector.

Bernstein noted that global data centre operators continue to trade at premium valuations. As India’s capacity expands over the coming years, companies with access to both land and power infrastructure could attract similar investor interest, it said.