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Strategic Synergies: Can India’s Data Center Boom Power the Next Phase of Tech Services Growth?
Strategic Synergies: Can India’s Data Center Boom Power the Next Phase of Tech Services Growth?

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The global data center industry is witnessing a significant boom, driven by an exponential increase in data consumption, digital transformation initiatives, and particularly, the burgeoning demand for artificial intelligence (AI) and high-performance computing (HPC). This growth is reshaping the market, with established regions like the USA, UK, Canada, and Germany continuing their maturity, while countries such as China, Japan, and Australia prioritizing data center expansion. Crucially, nascent and developing markets, including India, the UAE, and Indonesia, are emerging as attractive hubs for global investors and operators due to a confluence of favorable factors.

Data Centres: The India Advantage

India’s data center market has entered a transformative phase and has scaled up significantly in recent years. This is driven by key factors including:

  • Cost-effective real estate and power
  • Global connectivity via submarine cables
  • Growing renewable energy infrastructure
  • Large, digitally active population
  • Rising edge data center development in Tier II/III cities

These factors have powered growth of India’s overall data center stock across top seven cities by over 3X in the last 6-7 years from 307 MW in 2018 to 1,263 MW in 2025. Further, the market is expected to attract $20–25 billion in new investments over the next 5–6 years and expand its capacity more than threefold to over 4.5 GW by 2030.

Major cities such as Mumbai, Chennai, and Delhi NCR dominate this landscape, with Mumbai leading at 41% of capacity. However, the expansion is not limited to metros; edge data centres are being developed in Tier II and III cities to meet demands for low-latency and real-time data processing.

Data Center

Market Dynamics

Currently, India’s data center market is highly concentrated amongst the top 5 data center operators, which account for over 77% of the total data center capacity. However, several global and international players are lining up to grab a share of this ever-expanding pie and have announced investments to scale up their data center footprint in India.

Recent Data Centre Investments in India (Illustrative)

Company

Investment Amount ($)

Key highlights

CapitaLand

$1.15 billion

Investment undertaken in Mumbai, Hyderabad, Chennai, Bengaluru

Yotta

Multi-billion (aggregate)

Expansion in Navi Mumbai, Chennai

Nxtra by Airtel

$600 million

Doubling of capacity to 400 MW by 2027

AdaniConneX

$10 billion

Aiming to scale up data center portfolio to 10 GW

STT GDC India

$3.2 billion

Aiming to expand data center capacity by 550 MW over the next 5-6 years

NTT

$1.5 billion

Doubling data center capacity to 700 MW by 2027

Sify

$5 billion

Targeting 675 MW capacity over the next 5 years

RackBank Datacenters

$118.3 million

Developing India's first AI-focused SEZ in Nava Raipur, Chhattisgarh

 

Implications of India’s Expanding Data Center Landscape

The explosive growth of India's data center industry isn't just an infrastructure build-out; it's a strategic pivot that carries significant implications for the tech services sector. This boom is reshaping competitive landscapes, demanding new capabilities, and opening doors to unprecedented opportunities for strategic positioning and growth. Some key implications of rising data centre proliferation are:

  • Cloud and AI Adoption Will Soar: The proliferation of hyperscale and AI-ready data centers is directly fueling the strategic imperative for businesses to adopt advanced cloud strategies. This means a surge in demand for complex cloud migration services, expertise in hybrid and multi-cloud orchestration, and specialized solutions for AI/ML workload deployment and optimization.
  • Deep Niche Capabilities Will Be the Differentiator: As data centers become more complex and specialized (e.g., AI-focused, liquid-cooled, edge facilities), there emerges a strategic need to pivot towards specialized management, advanced cybersecurity and high-performance networking optimization services, which would be differentiators to strive in the market.
  • Partnership Models to Define Competitive Advantage: The data center boom is driving a strategic realignment of partnerships. There is a rise in strategic alliances among data center operators, hyperscalers, and specialized hardware vendors (like NVIDIA). These collaborations are essential for delivering integrated, end-to-end solutions, leveraging the physical infrastructure of data centers with specialized service capabilities, and co-creating innovative offerings, particularly in the AI space.
  • Talent Strategy and Workforce Development to be a Key Enabler: The rapid expansion is creating a significant demand-supply gap for specialized talent. For tech services firms, proactive talent strategy and workforce development must become a core competency. This involves strategic investments in upskilling and reskilling programs, establishing robust academic-industry collaborations to cultivate future talent, and potentially acquiring firms with niche expertise to secure critical skills. A failure to address this talent gap will be a significant inhibitor to strategic growth.

Unlocking Synergies Between Tech Services and Data Centres

As India’s digital infrastructure rapidly evolves, tech service providers stand at a strategic inflection point. The convergence of high-capacity infrastructure and AI-driven demand is set to redefine the services landscape — not just in scale, but in sophistication.

Nasscom’s upcoming Point of View on exploring synergies between data centers and tech services growth will dive deeper into these key questions:

  • Will data centre growth drive tech service demand?
  • What is the expected revenue impact on tech services?
  • Where will the impact be most significant – domestic or export markets?
  • Which job roles will be in highest demand?
  • What are the preferred models of collaboration between data centers and tech service providers?

The PoV based on data-backed insights can help unfold the story of how the future of tech services is being built today, in India's data centers! Stay tuned for the launch soon!


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Kuhu Singh
Manager, Research

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