KPMG: AI Spurs India Data Centre Market Growth

The KPMG report "India's Data Centre Revolution: The Integrated Lifecycle Blueprint (2026-2030)" projects India's total data centre sector revenue will reach approximately $45.69 billion by 2033. Per the report, the AI-optimised data centre market is expected to grow from about $588.6 million in 2024 to $3.55 billion by 2030, a 35.1% compound annual growth rate. The report notes many older facilities still rely on legacy air-cooling systems that cannot efficiently support high-density GPU clusters used for AI workloads. The report states, "With one billion internet users and businesses rapidly adopting cloud services, building domestic data centres is now a necessity."

The consultancy describes the sector's primary challenge as execution complexity, driven by a fragmented supplier base across construction, cooling, technology and operations, often creating delays and unclear accountability. To address that, the report proposes an "integrated lifecycle partner" model where a single provider would oversee land acquisition, power procurement, AI deployment, compliance and maintenance. The report also highlights the role of the Digital Personal Data Protection (DPDP) Act in increasing onshore data residency demand and notes investor attention to ESG factors as influencing operator choices.

Industry-pattern observations: AI training and inference workloads typically push facilities toward higher rack power densities, concentrated GPU deployments and tighter SLAs for latency and throughput. In comparable markets, this shift increases demand for advanced cooling (liquid, immersion) and upgraded power distribution, and it often exposes limitations in legacy air-cooled colocation sites.

Editorial analysis: Regulatory moves that restrict cross-border data flows, like India's DPDP Act, generally accelerate local capacity builds by global cloud and enterprise customers. Separately, investor emphasis on ESG drives operators to prioritise energy efficiency and decarbonisation, which affects site selection, cooling technology, and power procurement strategies. The report's emphasis on an integrated delivery model aligns with broader trends toward vertically coordinated data-centre services in fast-growing markets.

• •Regulatory clarifications and guidance under the DPDP Act that materially change cross-border operations.
• •Large-scale investments in liquid or immersive cooling and corresponding supply-chain moves for transformers, UPS and switchgear.
• •Emergence of integrated lifecycle providers or consortia that combine land, power contracts and operations.
• •How ESG-linked financing and corporate procurement criteria influence site energy sourcing and design.