India's Data Centre Push Draws Billions, But GDP Impact May Stay Modest

India has attracted billions of dollars in planned investments for data centres, but the overall effect on the country's economy may remain relatively small over the next few years. Moody's Ratings estimates that the sector could contribute only 0.13 per cent to India's GDP by 2030 despite the scale of announced projects.

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The ratings agency expects data-centre construction activity to add about 0.10 per cent of India's 2025 nominal GDP. Investments in additional power-generation capacity linked to these projects could contribute another 0.03 per cent. Even after the facilities are fully operational, the combined contribution is projected to remain at 0.13 per cent of GDP.  

Moody's noted that the investment pipeline is large in absolute terms, but much smaller when compared with the size of the Indian economy. The report added that a broader economic benefit would depend on factors such as supplier localisation, wider adoption of cloud services, expansion of digital-services exports and the development of businesses linked to the sector.  

The report does not expect a significant rise in employment either. Construction-related jobs generated by these projects are estimated to be around 0.01 per cent of India's 2025 industry employment. Once the facilities begin operating, that figure may increase to 0.02 per cent. Most of those roles are expected to be specialised in nature.  

Power availability, however, is not viewed as a major obstacle. Moody's estimates that data centres will account for less than 5 per cent of India's total electricity demand by 2030. The agency said the bigger challenge will be ensuring timely transmission and distribution connectivity in locations that are emerging as major data-centre hubs, including Mumbai.  

One factor limiting the sector's economic contribution is its dependence on imported equipment. A sizeable share of spending goes towards servers, semiconductors, cooling systems and other specialised technology sourced from overseas. Moody's noted that imports linked to data-centre development have accelerated since 2023, particularly in India, Thailand and Vietnam.  

Interest in the sector nevertheless remains strong. Domestic groups, global technology firms and smaller operators have together announced more than $250 billion in investments.  

Among the projects cited by the report are the $15-billion, 1-gigawatt data-centre project being developed by Google and Adani in Visakhapatnam, as well as Tata Consultancy Services' $7 billion HyperVault project of similar scale announced in October 2025.  

Earlier this year, Finance Minister Nirmala Sitharaman announced a complete tax holiday until 2047 for foreign cloud-service providers that use Indian data centres to host data or run workloads.