Impact Of Data Localisation Laws
The Indian government’s push for data localisation, under policies like the Digital Personal Data Protection Act, has accelerated the establishment of data centres. Global players such as AWS, Microsoft, and Google are investing heavily to comply with these regulations, while Indian companies like Jio and Yotta Infrastructure are scaling up their capacities.

Green Data Centres On The Rise
Sustainability is a key focus for Indian data centres in 2025. Operators are investing in renewable energy sources like solar and wind to power facilities, with states such as Rajasthan and Gujarat leading in renewable energy adoption. Innovative cooling technologies, including liquid cooling and the use of natural resources for temperature management, are becoming standard practices to enhance energy efficiency.

Edge Computing And Regional Growth
India’s shift towards edge computing is transforming data centre architecture. With the rollout of 5G and the proliferation of IoT devices, smaller edge data centres are being established closer to users in Tier 2 and Tier 3 cities.

Expansion Of Colocation And Hyperscale Facilities
By 2025, colocation and hyperscale data centres will dominate the Indian market. Colocation facilities, which allow multiple organizations to share infrastructure, are becoming the preferred choice for startups and small businesses due to cost efficiency. On the other hand, hyperscale data centres, built to support massive data volumes for global giants like Amazon and Google, are rapidly expanding to cater to India’s growing digital needs.

Advances In Security And Automation
With increasing cyber threats, Indian data centres are integrating advanced security measures such as Zero Trust Architecture, AI-powered threat detection, and biometric access controls. Automation is playing a vital role in optimizing operations. AI systems are managing energy consumption, predicting maintenance needs, and ensuring seamless uptime, reducing operational costs while improving efficiency.

Government Support And Policy Initiatives
The Indian government’s initiatives, such as the National Policy on Software Products and state-level incentives, are creating a favourable ecosystem for data centre growth. Many states are offering subsidies on land, power tariffs, and taxes to attract data centre investments.

Opportunities In Tier 2 And Tier 3 Cities
As data consumption grows beyond urban centres, data centre operators are expanding into Tier 2 and Tier 3 cities. These locations offer lower operational costs, ample land availability, and growing demand for digital services, making them attractive for future investments.

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https://www.businessworld.in/article/data-centers-in-2025-whats-driving-the-boom-in-india-540530