As this growth accelerates, however, attention is increasingly turning to the infrastructure needed to support it. Data centres, once viewed primarily as technical assets, are now becoming critical components of the modern economy. The current challenge for policymakers, investors and businesses is ensuring that this expansion can be delivered sustainably, without placing undue pressure on resources or compromising long-term growth ambitions.
Data centres move to the centre of the growth agenda
More than 100 new Global Capability Centres (GCCs) have reportedly been established in India so far in 2026, while significant investment continues to flow into advanced technologies, digital services and semiconductor manufacturing. As businesses generate, process and store increasing volumes of data, demand for data storage, cloud computing and connectivity infrastructure is rising accordingly. Against this backdrop, data centres are evolving from back-office technology assets into critical infrastructure that underpins digital growth. They require substantial land, reliable power, sophisticated cooling systems, connectivity infrastructure and extensive operational support. Regulation of the sector therefore extends beyond technology and increasingly intersects with energy policy, environmental regulation, infrastructure planning and industrial development. Policymakers at both national and state level are taking steps to support data centre development through targeted incentives, infrastructure investment and streamlined approval processes.
As demand for digital infrastructure grows, India is increasingly positioning itself as a hub for data centre investment. Its large domestic market, skilled workforce and rapidly evolving digital ecosystem continue to attract significant capital, as demonstrated by major projects involving organisations such as Google, Meta and Reliance Industries. For businesses considering expansion into India, opportunities extend beyond the development of data-centre facilities themselves. Increasing demand for renewable energy, cooling technologies, telecommunications infrastructure, cloud services, AI infrastructure and managed services is creating opportunities across the wider digital ecosystem.
Why sustainability matters
The scale of the opportunity is matched by the infrastructure challenge. Data centres require substantial and reliable supplies of electricity and, depending on the cooling systems used, can also place pressure on water resources. As investment accelerates, policymakers are increasingly focused on ensuring that growth does not come at the expense of environmental resilience.
Recent government statements have emphasised the importance of expanding data centre capacity while limiting pressure on water resources and supporting broader sustainability objectives. Proposed measures include increased reliance on renewable energy, adoption of closed-loop water systems and investment in more resource-efficient cooling technologies.
This approach is reflected in Karnataka's Sustainable Data Centre Policy 2026-2031, which seeks to establish the state as a leading data centre hub while promoting efficient use of electricity and water, encouraging green technologies and reducing carbon emissions. Karnataka represents a broader trend emerging across India, with several states introducing dedicated policies and incentive frameworks designed to attract digital infrastructure investment.
For investors, operators and customers alike, sustainable infrastructure is increasingly viewed as a prerequisite for resilience, future growth and long-term commercial success. Projects that integrate sustainability from the outset are likely to be better positioned for long-term success than those that treat it solely as a compliance exercise.
Talent remains part of the equation
While discussions around digital infrastructure often focus on buildings, power and technology, people remain a critical component of the sector's continued growth. As investment in data infrastructure accelerates, demand is expected to increase across a broad range of disciplines, including engineering, construction, telecommunications, facilities management, power systems, equipment maintenance and specialist technology roles.
At the same time, access to skilled talent is becoming an increasingly important consideration. Recent reports have highlighted shortages in areas such as cloud computing and generative AI, illustrating the need for continued investment in training and workforce development alongside physical infrastructure.
In this sense, the data centre industry is becoming more than an infrastructure story. Employment, skills and workforce development will be critical to its continued growth. Continued investment in talent, training and workforce development will be essential if India is to fully realise the opportunities presented by its growing digital economy.
Looking ahead
India's digital infrastructure ambitions reflect a broader shift in focus from growth alone to sustainable growth. As investment continues to accelerate, success will depend not only on building more infrastructure, but on building smarter, greener and more resilient infrastructure.
Those organisations that can balance investment, sustainability and talent development are likely to be best placed to benefit from the next phase of India's growth story.
DWF is a leading legal adviser to Indian and India-focussed companies, financial institutions and high net worth individuals and families. Our India Group, consisting of 115 lawyers from 9 countries, 16 practice areas and 9 sector groups, is the largest India group of any international law firm located outside India.
Dhruv Chhatralia BEM, the Head of the DWF India Group, was named to the India Business Law Journal’s International A-List 2024 featuring the world’s top-tier international lawyers outside India, based on recommendations by general counsels and lawyers at Indian law firms, for his work on cross-border aspects of India-related matters. DWF was ranked as an International Firm to Watch by the IBLJ in 2025. DWF was also shortlisted for the award of “Legal Practice of the Year” at the 6th Annual UK-India Awards in 2024 based on the achievements of the DWF India Group. Further details about the DWF India Group can be found on the following webpage: https://url.uk.m.mimecastprotect.com/s/2bA1C6yRUgzp8ki5sJF5doBP?domain=eu-central-1.protection.sophos.com.
While we do not practice Indian law as per the country’s current regulatory framework, we have strong relationships with leading Indian law firms with whom we collaborate to provide a seamless service to our clients. If you have queries on any of the issues covered in this article, please contact one of our experts.
We would like to thank Gabriella Rasiah and Victoria Shaw for their contribution to this article.
