Access a copy of the parliamentary report here: [pdf]
The Ministry of Electronics and Information Technology (MeitY) has no official records on data center capacity, and it relies on ‘industry estimates’ to assess data centre growth and future capacity requirements, according to a recent parliamentary committee report examining the Ministry of External Affairs (MEA).
“Officially, no data is maintained in MeitY regarding the capacity of Data Centres,” noted the recent parliamentary committee report titled “India’s Role in Global Tech Diplomacy, Digital Governance, Outer Space Diplomacy, AI and Emerging Innovations”. The parliamentary committee called for verified data on India’s data centre capacity to help guide international investment.
The same was also noted in the committee recommendations. Under one of the recommendations, the committee noted MeitY’s response:
“…when asked whether India hosts nearly 20% of the world’s data while accounting for only 3% of global data centre capacity, MeitY candidly acknowledged that neither figure is officially verified, and that no official data on India’s data centre capacity is centrally maintained by the Ministry, with the figures placed before the Committee drawn instead from industry estimates. The Committee note that this uncertainty exists notwithstanding the acknowledged scale of the challenge, with industry estimates suggesting that capacity may need to expand several-fold, to somewhere between 5 and 10 GW, by 2030.”
In this context, the committee recommended that the Ministry of External Affairs ‘take up with MeitY’ and other concerned Ministries the need for systematic collection and publication of verified data on India’s data centre capacity, utilisation and growth and use this evidence to prioritise international investment and technology partnerships addressing identified capacity gaps.”
Why it matters: The need for verified capacity data is particularly relevant given the upcoming multi-crore AI data centre projects across states, including Andhra Pradesh, Telangana, Karnataka, Uttar Pradesh and Maharashtra.
The data sovereignty issue is relevant as the Reserve Bank of India’s Storage of Payment System Data Directive (2018) mandates that regulated entities across sectors like banking, insurance, fintech, healthcare, and government agencies require payment transaction data, including customer credentials, transaction logs, and personal details, to be stored exclusively in systems located within India.
Foreign surveillance laws in some countries could also raise concerns about access to Indian data stored overseas. For instance, in April 2024, then US President Joe Biden signed the ‘Reforming Intelligence and Securing America Act’(RISAA) that allows the US authorities to seek data belonging to foreign nationals. Read more about the Act’s implications on India here.
Why is there a call for local data centres in India? “The committee are concerned that the present gap results in a portion of India’s data being stored or processed outside the country, raising concerns of latency, cost and, most significantly, data sovereignty”
Government measures to support data centre development:
- Long-term tax holidays for foreign cloud companies: “Government shall be providing a long-term tax holiday to foreign cloud service providers on procurement of Data Centre services from Indian Data Centres. This initiative is aimed at positioning India as a global digital infrastructure hub. It is a major step in attracting investment in the data centre industry provider on data centre and cloud infrastructure investment.” Read more about such tech-policy announcements from the recent Union Budget here
- Infrastructure status that could improve access to long-term financing: “For facilitating ease of finance, Data Centres were included in the Harmonized list of Infrastructure Sub-Sectors (HML) qualifying them for the infrastructure status at par with other infrastructure projects.” Read more about this on PIB
Relying on industry estimates, the report noted that the data center capacity “has grown rapidly, from around 520 MW in 2020 to approximately 1.5 GW in 2025. It is projected to reach approximately 2 GW by 2026 and over 8 GW by 2030.” It further noted that the major data centre hubs include Mumbai, Bengaluru, Hyderabad, Chennai, and Delhi NCR.
Singapore has introduced a Digital Infrastructure Bill proposing a licensing regime for major cloud service providers and data centre operators that have power capacity of 10MW or more. These include cybersecurity measures, measures to minimise the risk of unexpected service interruptions and business continuity and disaster recovery plans. Read a brief lowdown of the bill on MediaNama World.
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