Data centre boom to add 0.13 pc to India's GDP
The surge in data?centre investment in India is likely to make a modest direct contribution to gross domestic product (GDP), adding 0.13 per cent to it, a new report has said.
The report from Moody’s Ratings estimated that data?centre capital expenditure will add nearly 0.10 percentage point to nominal GDP during the construction phase in 2025, with additional investment in power generation contributing roughly 0.03 percentage point.
Once facilities are fully operational, the agency projected the sector’s contribution to stabilise at around 0.13 per cent of GDP by 2030, the report added.
“India’s planned investment and construction employment are substantial in absolute terms but small relative to the size of the economy,” Moody’s said.
The investments are strategically and locally important, however, “not yet large enough to materially change the national growth profile”.
The longer-term economic payoff will depend on hinge on the investment triggering supplier localisation, wider cloud adoption, growth in digital-services exports and development of the broader ecosystem, the ratings agency said.
As data centres are highly capital-intensive, construction-related employment from them is likely to be nearly 0.01 per cent of 2025 industry employment, rising to 0.02 per cent once the facilities become fully operational.
Long-term employment is likely to remain concentrated in specialised roles.
Power availability is unlikely to be a national constraint, the report said, projecting data centres to account for less than 5 per cent of India’s electricity demand by 2030.
The estimation suggested that the country is better placed than smaller regional markets to absorb the additional load. The report stressed that timely transmission and distribution links to major data centre clusters remains crucial.
India has attracted significant investment in data centre capacity, with domestic conglomerates, global technology companies and smaller independent firms together announcing over $250 billion in investments.
