Crisil said the surge is driven by generative artificial intelligence (GenAI) led computing demand, enterprise digitalisation and rising data consumption.
While long-tenor contracts with hyperscalers provide strong cash flow visibility, the pace of the expansion and credit quality of the data centre developers will hinge on timely power connectivity, regulatory approvals, and disciplined project execution, it said.
“India’s structural cost advantages further strengthen its attractiveness as a data centre destination. Development costs are around one-fifth lower than in several competing Asia-Pacific markets owing to more competitive land, construction and labour costs. Combined with lower power tariffs, this translates into rentals that are 30-35 per cent lower than in peer markets,” Anand Kulkarni, Director, Crisil Ratings, said.
The ability to develop large, renewable-powered campuses also aligns well with the sustainability goals of hyperscalers, reinforcing India’s competitive positioning, he said.
Crisil also noted that the unprecedented growth in data centres is creating a power infrastructure bottleneck.