India could be a big winner in AI data centre boom, but power demand may be the catch

India could emerge as one of the biggest beneficiaries of the global AI data centre boom, as demand for sovereign AI, local cloud infrastructure and AI-powered services pushes more computing capacity closer to users.

PwC released a report titled ‘Global Data Centre Outlook 2026–50’ on Wednesday estimating that data centres globally could attract $31.6 trillion in capital expenditure through 2050 in its central scenario. The annual spending is expected to rise from around $800 billion in 2026 to $1.1 trillion in 2030 and $1.8 trillion by 2050.

According to the report, the Asia-Pacific region could attract $8.2 trillion in cumulative data centre capex through 2050, with India and China emerging as the biggest sources of incremental demand. Large populations, rapidly growing digital economies and significant headroom for AI adoption make both markets important to the next phase of the data centre buildout.


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For India, however, the bigger opportunity may come from sovereign AI and data localisation.

S&P Global says India's data centre IT load stood at 1.4 GW during April-June 2025, with another 1.4 GW under construction. Technology companies have announced close to $300 billion of investments in India's data centre infrastructure over the past two years. More than 5 GW of additional IT load is expected to come online by 2030.

According to BloombergNEF, Reliance Industries and the Adani Group have collectively committed $210 billion to data centre development in India. Google, Amazon and Microsoft together have announced $84 billion of investment.

All of this needs electricity

PwC identifies power as the biggest constraint on the global data centre buildout. Transmission capacity, substations and other grid infrastructure can take years to develop, potentially slowing projects even when investment and demand are available.

The scale of the potential demand is already visible in government data. A March 2026 parliamentary reply, citing the Ministry of Power, put electricity demand from data centres at 13.56 GW. An August reply, citing the Central Electricity Authority, put it at around 17 GW.

The pipeline could add further pressure. A July 2026 report citing a Ministry of Power reply said states had submitted AI data centre projects that could add 26.3 GW of grid load. While this is a project-linked pipeline figure rather than a forecast of actual demand, it highlights the scale of capacity that the power system may eventually have to accommodate.

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India's data centre electricity consumption was around 13 TWh in 2024, accounting for 0.8% of the country's total electricity demand, according to S&P Global Commodity Insights. By 2030, it expects data centre power demand to rise almost fivefold to 57 TWh, taking the sector's share of India's electricity demand to around 2.6%.

That growth is happening alongside a broader increase in India's electricity requirements.

The International Energy Agency expects India's electricity demand to grow at an average 6.4% annually through 2030, adding more than 570 TWh to annual consumption over the next five years. Cooling, industry, agriculture and transport are all expected to drive demand. India's peak load has already risen from 162 GW in 2017 to 250 GW in 2024.

India does have a much larger power base than it did a decade ago. According to a factsheet by the Press Information Bureau, installed power capacity was around 552 GW in July 2026, more than double the 249 GW recorded in 2014.

However, S&P Global estimates that 15-30 GW of additional renewable capacity will be needed over the next five years to meet projected data centre power demand. That is less than 10% of the renewable capacity additions expected during the period, suggesting India has enough renewable potential to support the sector. The challenge, it says, is likely to be the timely expansion of the grid needed to move that power to where it is required.

Also Read: India's data centre footprint to touch over 101 million sq ft by 2030

Data centre operators are already moving in this direction. S&P Global has recorded more than 3 GW of renewable procurement deals announced by operators for live and pipeline projects in India.

Sovereign AI becomes the key

The country has the demand, a rapidly expanding digital economy and a policy push towards local computing infrastructure. The shift towards sovereign AI could further strengthen the case for building capacity within India.

But the next phase of the race will increasingly be about who can secure reliable power, at the right price, in the right location.

For India, becoming an AI infrastructure hub may therefore depend as much on building out its electricity and transmission infrastructure as it does on adding GPUs and data centre capacity.