New Delhi, May 25 (IANS) India’s data centre industry is entering a phase of accelerated expansion and the country’s total data centre sector revenue is pegged to reach about $45.69 billion by 2033, a report said on Monday.

The report from KPMG in India said that the accelerated expansion of specialised infrastructure is driven by AI‑driven workloads, rising cloud adoption, widespread 5G rollout and data localisation requirements.

The AI‑optimised data centre market, valued at roughly $588.6 million in 2024, is projected to reach approximately $3.55 billion by 2030 at an estimated compound annual growth rate of 35.1 per cent.

The report added that the sector’s principal challenge is no longer demand but the increasing complexity of delivering scalable, compliant, and operationally integrated infrastructure solutions.

Traditional infrastructure designs based on legacy air-cooling systems are proving inadequate for modern GPU‑intensive AI workloads, as AI‑ready facilities require specialised liquid cooling and high‑density power distribution.

The Digital Personal Data Protection (DPDP) Act 2023 is accelerating the need for local data residency infrastructure and compliant data processing architectures, the report noted.

“India’s data centre industry is moving into a new phase of accelerated growth driven by AI‑led workloads, cloud adoption, and evolving data localisation requirements,” said KG Purushothaman, Head – Digital Solutions and National Leader – Artificial Intelligence, KPMG in India.

As infrastructure demand increases, the market will require integrated execution models that can combine engineering capabilities, AI readiness, regulatory understanding, and operational accountability to support large‑scale and future‑ready digital infrastructure development, he added.

The report highlighted that the market is increasingly shifting away from fragmented service provider models towards an integrated lifecycle partner approach that combines planning, building, deployment, operationalisation, and maintenance under a single accountability framework.

ESG considerations are increasingly influencing investment attractiveness, with operators focusing on renewable energy integration, efficient power usage, and sustainable infrastructure models.

“Execution capability will become as important as infrastructure capacity creation,” said Unaise Urfi, Partner – Digital Solution, Strategy and Insights, KPMG in India, adding that organisations will increasingly require integrated partnership models for seamless, scalable, and coordinated infrastructure delivery.

—IANS

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