India’s installed data centre capacity is set to increase five-fold to around 7.5 GW by March 2030, attracting more than Rs. 3 tn in investments over the next four financial years, according to a report by Crisil Ratings. Generative artificial intelligence, enterprise digitalisation and rising data consumption are driving the planned expansion, although the sector’s returns will depend on power connectivity, regulatory clearances and project execution. Nearly half of the upcoming capacity has already been committed through long-term contracts, reducing speculative development and offtake risk. Global hyperscalers are supporting investment decisions through cloud adoption and increasingly compute-intensive GenAI workloads, while India’s development costs are around 20 per cent lower than those in several competing Asia-Pacific markets. Lower land, construction and labour costs, along with competitive power tariffs, enable rental rates to remain 30 to 35 per cent below those in peer markets. The availability of large campuses powered by renewable energy is also strengthening India’s appeal to hyperscalers seeking to meet sustainability commitments. Power infrastructure remains a significant execution challenge. Nearly three-fourths of about 6 GW of upcoming capacity is expected to be concentrated in Visakhapatnam, Mumbai and Hyderabad, where capacity by fiscal 2030 could equal around 80 per cent, 60 per cent and 20 per cent, respectively, of current peak electricity demand. Existing facilities are operating at around 90 per cent utilisation, while more than 95 per cent of capacity under construction has been contracted. Contract tenors have lengthened to 15 to 20 years from 10 to 12 years earlier, improving revenue visibility, although developers will need continued investment in upgrades, higher power density and advanced cooling for next-generation workloads. Hyperscalers’ share of leased capacity is expected to rise to 75 to 80 per cent by fiscal 2030 from 60 to 65 per cent in fiscal 2026, increasing customer concentration and bargaining-power risks. Investments generally precede cash flows by 24 to 36 months, but improving utilisation and operational commissioned capacity should gradually strengthen cash generation and reduce leverage.