India to surpass Japan, Australia in APAC data-center power demand

As of mid-2025, India’s total IT load capacity for datacenters stands at approximately 1.4 gigawatts.

India is on track to become the second-largest market for datacenter electricity demand in Asia-Pacific, overtaking Japan and Australia, according to a report by S&P Global.

The growth is driven by a surge in digital services, data consumption, and AI adoption, positioning the country as a potential global hub for datacenter activity.

S&P Global estimates power demand from India’s datacenter industry will rise nearly fivefold by 2030—from about 13 terawatt-hours (TWh) in 2024 to 57 TWh—increasing its share of the country’s total electricity consumption from 0.8% to around 2.6%.

This reflects India’s rapidly expanding digital infrastructure, underpinned by strong fundamentals such as cloud computing, e-commerce, digital payments, and internet-of-things adoption.

As of mid-2025, India’s total IT load capacity for datacenters stands at approximately 1.4 gigawatts, with that figure expected to double within two years based on projects currently under construction.

Over 95% of upcoming capacity additions are projected to come from leased facilities—both retail and wholesale—with a smaller share allocated to hyperscaler AI infrastructure.

Government initiatives are playing a key role in enabling this growth. The report highlighted policy support including data localisation mandates, incentives under the IndiaAI mission, and classification of datacenters as critical infrastructure.

State and central authorities are also offering land subsidies, electricity tariff discounts, and guaranteed power access, particularly in datacenter hubs such as Maharashtra, Telangana, and Karnataka.

However, S&P Global cautioned that infrastructure bottlenecks and environmental challenges could limit momentum.

Key concerns include water scarcity in major cities like Mumbai, Chennai, and Bengaluru, variability in state-level regulation, and the carbon intensity of India’s power mix, which is still dominated by coal.

The pace of grid upgrades and transmission expansion may also lag behind sector growth.

In response, datacenter operators are increasingly turning to renewable energy procurement, direct power purchase agreements, battery storage, and dual-grid connections to enhance sustainability and reliability.