The explosive growth of India’s digital economy is attracting global attention and driving huge investments from data center service providers, both Indian and international players, and cloud service providers. Private equity funds are also bringing in capital to participate in the growth. At the same time, India’s role as a digital corridor is becoming increasingly vital, bridging Asia-Pacific, Australia, Europe and the Middle East. There are multiple drivers of this growth:
- Rising household incomes and the expanding middle class are causing increased digital consumption across entertainment, e-commerce, education and financial services.
- The country’s high demographic dividend, with 40% of the population under 25, supports long-term demand for digital services.
- Global companies are increasingly investing in India, while domestic companies are expanding their presence.
India’s evolution as a strategic digital corridor and a leading digital economy requires industry-leading digital infrastructure.
Supporting massive local data production and consumption with a vibrant telco market
India aims to become a $1T digital economy by 2028. It is already making significant progress, supported by the country’s thriving startup ecosystem—the third largest in the world—and initiatives like Startup India.[1]
The country’s digital economy is growing rapidly due to increased smartphone usage, mobile data consumption, and a rising number of internet users, with cell phone users in India consuming over 19 petabytes (PB) of data monthly—the highest in the world.[2]
Widespread 4G and 5G networks and affordable telecom services have accelerated this growth, attracting 100 million new 5G users in 2024.[3] Telecom companies are attracting new users with some of the lowest pricing in the world. Affordable mobile internet means that Indians from all walks of life are able to consume massive amounts of content, including streaming video. In many cases, they’re also creating content themselves, driving further demand for compute and storage resources in the country.
Yet, challenges persist in bridging the digital divide. Digital infrastructure services should benefit all of society—including millions of rural residents across the country.
Emerging as a global subsea cable connectivity hub
India stands as a vital digital corridor connecting Asia-Pacific with Europe, the Middle East and Africa through its extensive subsea cable network. These underwater fiber optic pathways boost India’s data transfer capabilities while strengthening global digital connections.
With landing stations for 17 international subsea cables, India holds a key position in global connectivity. New systems like India Europe Express (IEX), India Asia Express (IAX), MIST, 2Africa Pearls, Blue Raman and SEMEWE 6 will cement India’s status as an essential digital hub. These advanced cables are expected to quadruple India’s data transmission capacity, dramatically improving internet connectivity across multiple regions.
This international data traffic surge and the growth in content creation and consumption will require domestic network providers to significantly expand their inter- and intra-city fiber network capacity in general and between data centers and cable landing stations, in particular, to support the increased data flow.
Strengthening India’s digital infrastructure foundation
To ensure the digital economy continues to thrive without barriers, these domestic networks, subsea cables and consumers need to be connected in an efficient way. Data centers and their associated digital infrastructure enable businesses to connect with multiple cloud and network service providers, partners and customers, through physical and virtual interconnection. The growing interconnection capabilities in India enable enterprises to choose the best cloud solutions for their specific needs and adopt hybrid multicloud strategies.
While a solid foundation of digital infrastructure is in place in India, much of it was not designed to support the massive amounts of data being generated today. In order to efficiently transmit, process and store rapidly multiplying volumes of data, businesses will need to invest in connectivity, build out network density and provision sufficient computing power and storage.
Government agencies and regulators recognize that tremendous progress has been made, but potential barriers to continuous progress exist. In response, they’ve launched various initiatives to address the rural and urban digital divide and to make doing business simpler, including:
- Providing high-speed internet connectivity to rural areas at affordable prices using optical fiber technology
- Establishing a startup ecosystem for innovation and entrepreneurship
- Driving growth in the AI sector by subsidizing the costs small businesses incur when developing AI applications
- Supporting sustainability efforts with renewable energy usage incentives
Recognizing data centers as critical national infrastructure
While India is already one of the world’s largest multi-tenant data center markets, it is significantly undersized compared to the country’s massive data production and consumption. For every megawatt (MW) of installed colocation capacity, users generate approximately 13.2 PB of data monthly. This ratio indicates India’s tremendous potential for data center expansion compared to more mature markets. In other Asia-Pacific countries, data generated per 1 MW of installed colocation capacity is commonly much lower: 0.3 PB for Australia and just 0.01 PB for Singapore.[4]
The Indian government has designated data centers as critical infrastructure, offering incentives for new development. Growth in the number and capacity of colocation data centers will help support the growing consumption of digital services and data generation, and deployment of available compute and storage capacity.
As you might expect, the expanded use of AI is driving some of this growth, particularly since India is among the leaders in consumer AI adoption. This will increase the demand for high performance data centers and digital infrastructure. Further, as data sovereignty regulations evolve and cloud adoption accelerates, the need for state-of-the-art data center infrastructure will become even more essential for India to fulfill its potential as a digital corridor.
Enhancing India’s digital infrastructure through investment
India’s consistent economic growth provides the financial foundation for sustained digital infrastructure investment, in lockstep with the buildout of data centers across India. At Equinix, we see the potential and are committed to continuing to invest in India by expanding our carrier-neutral, colocation data center presence across the country.
The Equinix Mumbai data center campus provides a hyper-interconnected platform with a unique aggregation of ecosystem of cloud and network service providers, content delivery networks, telcos, financial institutions and other enterprises in a carrier neutral environment in India’s financial and commercial hub. The campus hosts five operational internet exchanges, on-ramps to nearly every major cloud provider, 10+ major telcos and 175+ ISPs. This robust ecosystem makes Equinix the ideal hub for new cable systems entering Mumbai. We’re expanding in Mumbai and launching a new data center later this year—in the Chandivali Area, which is adjacent to our existing Mumbai campus. Equinix is also expanding into a new metro, with our new IBX at Siruseri, Chennai. It’s expected to go live later this year, to serve enterprises and hyperscalers looking to capitalize on the city’s strong tech ecosystem and connect with our thriving ecosystem at our Mumbai campus.
We are actively exploring other metros in India for future investments as part of our pan-India digital infrastructure platform. By making these investments and bringing our global platform to India, we aim to be a leading catalyst of development of the overall digital economy.
To learn more about how businesses are deploying interconnected digital infrastructure—in India and around the world—read our vision paper, The future of digital leadership.
[1] India’s Startup Revolution, Press Information Bureau, Government of India, February 1, 2025.
[2] Data Centre Research Report 2024: Is India Building Enough to Power Digital Transformation? | IN | Cushman & Wakefield, June 27, 2024.
[3] India’s telecom sector: A year in review 2024 and key trends shaping 2025, tele.net, December 27, 2024.
[4] Data Centre Research Report 2024: Is India Building Enough to Power Digital Transformation? | IN | Cushman & Wakefield, June 27, 2024.
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