On Thursday, India and Japan signed several key technology agreements, and one of them relates directly to setting up data centres in India. But this is neither a standalone nor a first-of-its-kind development. Over the past few months, the world's biggest technology companies have either shown interest in building data centres here or have already begun work on them. In the last six months, India has emerged as the very centre point of these facilities. Put simply, the country has become the new home base for the world's leading tech giants when it comes to data centres.
Google, Microsoft, Amazon, Meta, NTT Data, Reliance, Adani and several others are pumping billions of dollars into the country. Within just six months, at least seven major cities have become hubs for mega data centre projects. Experts now describe this as far more than mere investment, calling it a new era of geo data politics.
Why the sudden scramble for data centres?
Until a few years ago, oil, gas and ports were seen as any nation's greatest strategic assets. Data has now taken their place. The more data an AI model processes, the better it becomes. That is exactly why every major tech company in the world is hunting for countries where data can be stored and processed at scale. This is where the story of geo data politics begins. It means the competition between nations is no longer just over land or sea routes, but over data itself. The country with the most data, the most computing power and the most data centres will hold the greatest sway over the digital economy of the future.
Why India became the top choice
The first big reason is a population that has gone digital. India has the world's largest internet user base. Crores of people use UPI, social media, e-commerce, video streaming and countless digital services every single day. This generates enormous volumes of data every second, and that raw material is precisely what AI companies need most.
The second major factor is data localisation. India's rules are steadily moving in the direction of keeping sensitive data of Indian citizens within the country's borders. In practice, that means foreign companies will have to build their data centres inside India.
On top of this, land and construction costs here are far lower than in the United States and Europe. Solar and wind energy are growing rapidly, which can supply these centres with green power. International submarine internet cables land directly in cities like Mumbai, Chennai and Visakhapatnam, offering fast connectivity to networks around the globe.
A new digital India taking shape across seven cities
Right now, seven major cities form the core of data centre investment in the country.
Mumbai and Navi Mumbai remain India's largest data centre hub. Here, Amazon Web Services (AWS), Microsoft, Google, STT GDC, Nxtra and many others are steadily expanding their capacity.
Chennai is rising fast on the strength of its submarine cable network. Several hyperscale data centres are already operational, and work on new projects is under way.
Hyderabad is where Japan's NTT Data is building its largest AI data centre project. The company is working on a cluster of around 400 megawatts of capacity.
Visakhapatnam is set to host a major AI and data centre hub that Google is preparing to develop with an investment of roughly 6 billion dollars.
Jamnagar is where Reliance Industries and Meta are jointly working on one of the country's largest AI data centres, complete with green energy and cooling drawn from seawater.
Noida and Bengaluru are also seeing the expansion of several big cloud and data centre projects, with both domestic and foreign companies investing.
Why India is trusted more than China
India is now seen as more reliable than China for data centres. The biggest reasons are geo data politics and the shift in the global supply chain. Many large tech companies in the United States and Europe want to reduce their dependence on China. Growing state control in China, strict rules around data access, US-China tensions and rising regulatory risk for foreign firms have all deepened investor anxiety. India, on the other hand, offers a democratic system, a fast-growing digital market, a data localisation policy, strong IT talent, cheap land and government incentive schemes, all of which inspire greater confidence. That is why global companies are now investing billions in their big data centres and AI infrastructure in India rather than China.
Who placed how big a bet?
Google has announced a major investment to expand its AI infrastructure in India. The company is growing its footprint in Visakhapatnam, Navi Mumbai and the Delhi NCR region.
Microsoft is continuously expanding its cloud network and has already counted India among its biggest AI markets.
Amazon Web Services has boosted the capacity of its Mumbai region and has already announced plans to invest billions of dollars in the years ahead.
Japan's NTT Data is investing in one of the largest AI data centre clusters in India.
Alongside them, Indian and global players such as STT GDC, CtrlS, Nxtra and AdaniConnex are also building hyperscale data centres across the country.
It is worth remembering that data centres are not just buildings that house servers. They come with investments running into thousands of crores of rupees, and an entire ecosystem of construction, power and fibre networks is built around them.
