NEW DELHI : New Delhi: The Centre is drawing up a roadmap to position India as a host for foreign governments' data embassies, enhance international submarine cable connectivity and develop sovereign cloud infrastructure, showed an inter-ministerial presentation seen by Mint and people close to the discussions.

A data embassy is a secure data centre located in another country but legally protected under the laws of the home country through a bilateral agreement.

To achieve these goals, the government seeks to promote indigenous IT hardware manufacturing, expand edge data centres in tier-II and tier-III cities, streamline regulatory clearances, build a skilled workforce, and encourage the use of renewable energy and advanced cooling technologies to support sustainable growth.

Emerging data centre market

The roadmap comes as India emerges as one of the world's fastest-growing data centre markets. Over the past 12 months, domestic conglomerates, Big Tech firms such as Google, Amazon, Microsoft, and Meta, and standalone operators have committed over $250 billion to build new data centre capacity across the country.

The presentation showed that the country's installed data centre capacity has expanded fourfold over the past half-decade, from about 375 megawatts in 2020 to nearly 1,500MW at present. And the market, estimated at $8.94 billion in 2025, is projected to grow to $31.36 billion by 2035, with installed capacity exceeding 12 GW.

A cost advantage over several mature global markets has helped the country climb from 13th place in June 2024 to sixth globally by June this year in terms of operational data centres.

Data centre development costs in India are estimated at ₹40-55 crore per megawatt, significantly lower than in mature markets such as the US, Germany, the UK and Singapore. Relatively competitive commercial power tariffs further enhance the country's appeal for large-scale investments.

Key hurdles

However, heavy reliance on imported IT hardware remains a major concern.

Critical components, including servers, storage systems, networking equipment, graphics processing units (GPUs) and advanced cooling technologies, continue to be sourced largely from foreign original equipment manufacturers (OEMs), limiting the development of a domestic manufacturing ecosystem.

The presentation also pointed to the dominance of foreign hyperscalers and cloud service providers in meeting the country's cloud infrastructure demand, underscoring the need to build indigenous cloud platforms and sovereign cloud capabilities, according to the people cited above.

Other bottlenecks identified include the absence of Indian standards and certification frameworks for data centres, shortages of skilled professionals in data centre design, commissioning, operations and AI infrastructure, and lengthy approval processes involving land acquisition, environmental clearances, construction permits, power connectivity and multiple local authorities.

Mint's queries emailed on 30 July to the ministry of commerce and industry, the ministry of electronics and information technology, the National Informatics Centre (NIC) and the Software Technology Parks of India (STPI) remained unanswered.

“India's renewed focus on data centre infrastructure provides the necessary tailwind to position the country as a compelling destination for global capital flows,” said Sharat Chandra, founder of EmpowerEdge Ventures, a venture-building firm for fintechs and startups.

“Data centres are preferred long-term infrastructure assets with predictable cash flows, making them particularly attractive to hyperscalers, sovereign wealth funds, private equity investors and global infrastructure funds seeking stable, dollar-denominated investment opportunities.”

“As India's digital economy, cloud adoption and AI workloads grow, the demand fundamentals become even stronger. Every new hyperscale data centre creates opportunities for a wide range of startups and technology companies to innovate and scale,” Chandra added.

NEW DELHI : New Delhi: The Centre is drawing up a roadmap to position India as a host for foreign governments' data embassies, enhance international submarine cable connectivity and develop sovereign cloud infrastructure, showed an inter-ministerial presentation seen by Mint and people close to the discussions.

A data embassy is a secure data centre located in another country but legally protected under the laws of the home country through a bilateral agreement.

To achieve these goals, the government seeks to promote indigenous IT hardware manufacturing, expand edge data centres in tier-II and tier-III cities, streamline regulatory clearances, build a skilled workforce, and encourage the use of renewable energy and advanced cooling technologies to support sustainable growth.

Emerging data centre market

The roadmap comes as India emerges as one of the world's fastest-growing data centre markets. Over the past 12 months, domestic conglomerates, Big Tech firms such as Google, Amazon, Microsoft, and Meta, and standalone operators have committed over $250 billion to build new data centre capacity across the country.

The presentation showed that the country's installed data centre capacity has expanded fourfold over the past half-decade, from about 375 megawatts in 2020 to nearly 1,500MW at present. And the market, estimated at $8.94 billion in 2025, is projected to grow to $31.36 billion by 2035, with installed capacity exceeding 12 GW.

A cost advantage over several mature global markets has helped the country climb from 13th place in June 2024 to sixth globally by June this year in terms of operational data centres.

Data centre development costs in India are estimated at ₹40-55 crore per megawatt, significantly lower than in mature markets such as the US, Germany, the UK and Singapore. Relatively competitive commercial power tariffs further enhance the country's appeal for large-scale investments.

Key hurdles

However, heavy reliance on imported IT hardware remains a major concern.

Critical components, including servers, storage systems, networking equipment, graphics processing units (GPUs) and advanced cooling technologies, continue to be sourced largely from foreign original equipment manufacturers (OEMs), limiting the development of a domestic manufacturing ecosystem.

The presentation also pointed to the dominance of foreign hyperscalers and cloud service providers in meeting the country's cloud infrastructure demand, underscoring the need to build indigenous cloud platforms and sovereign cloud capabilities, according to the people cited above.

Other bottlenecks identified include the absence of Indian standards and certification frameworks for data centres, shortages of skilled professionals in data centre design, commissioning, operations and AI infrastructure, and lengthy approval processes involving land acquisition, environmental clearances, construction permits, power connectivity and multiple local authorities.

Mint's queries emailed on 30 July to the ministry of commerce and industry, the ministry of electronics and information technology, the National Informatics Centre (NIC) and the Software Technology Parks of India (STPI) remained unanswered.

“India's renewed focus on data centre infrastructure provides the necessary tailwind to position the country as a compelling destination for global capital flows,” said Sharat Chandra, founder of EmpowerEdge Ventures, a venture-building firm for fintechs and startups.

“Data centres are preferred long-term infrastructure assets with predictable cash flows, making them particularly attractive to hyperscalers, sovereign wealth funds, private equity investors and global infrastructure funds seeking stable, dollar-denominated investment opportunities.”

“As India's digital economy, cloud adoption and AI workloads grow, the demand fundamentals become even stronger. Every new hyperscale data centre creates opportunities for a wide range of startups and technology companies to innovate and scale,” Chandra added.