India’s data centre capacity set for sharp growth on AI, 5G demand

India’s data centre industry is set for a sharp growth phase driven by the twin forces of artificial intelligence (AI) and 5G, according to Ashish Rai, Group CEO of Aurionpro Solutions, and Prateek Jhawar, MD & Head of Infrastructure and Real Assets Investment Banking at Avendus Capital.

Speaking to CNBC-TV18, Rai said that Aurionpro’s data centre business has become a key growth engine, contributing “north of 15% of our revenue at the moment” and expanding at a pace of 40–50% annually over the last four years.

He also highlighted the demand-supply gap in the country, pointing out that “we generate almost 20% of global data demand, but the data centre capacity is probably 3% or thereabouts.” With rising requirements from AI inference, 5G, payments and latency-sensitive services, Rai expects demand to climb strongly over the next five to seven years.

On the investment side, Jhawar estimated that meeting India’s demand would require around $25 billion over the coming decade. He noted that the entire value chain—developers, operators, cooling and power solution providers—stands to gain. “From a developer-operator perspective, you have to invest almost around $600–700 million for a gigawatt of capacity,” he said, adding that global operators with hyperscaler relationships and the lowest cost of capital are likely to capture the bulk of this build-out.

Both leaders agreed that policy support and localisation requirements from regulators are pushing momentum further. Jhawar said India could potentially become a global hub for data storage if its infrastructure costs remain competitive, while Rai stressed that Aurionpro intends to be among the top players supporting partners in this fast-growing ecosystem.

Watch accompanying video for entire discussion.