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Despite billions of dollars being invested in data centres, they may contribute just 0.13 per cent to India’s gross domestic product (GDP) by 2030, Moody’s Ratings said in a report published on Tuesday.
Data centre capital expenditure is projected to contribute about 0.10 per cent of India’s 2025 nominal GDP during the construction phase, while investment in additional power generation could add another 0.03 per cent. Even once the facilities become fully operational, their contribution is expected to remain at just 0.13 per cent of GDP, Moody’s projections showed.
“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, it added, but are “not yet large enough to materially change the national growth profile”. The longer-term economic payoff will depend on whether the investment triggers supplier localisation, wider cloud adoption, growth in digital-services exports and development of the broader ecosystem, Moody’s said.
Limited employment gains
Employment gains are also expected to remain modest because data centres are highly capital-intensive. Construction-related employment is estimated at around 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 limited and concentrated in specialised roles.
Power availability not a constraint
Power availability is unlikely to emerge as a nationwide constraint, according to Moody’s. Data centres are expected to account for less than 5 per cent of India’s total electricity demand by 2030, leaving the country better placed than smaller regional markets to absorb the additional load. However, timely transmission and distribution connectivity to major data centre clusters, including Mumbai, will remain critical.
High import intensity limits domestic value addition
A key constraint for India is the sector’s high import intensity. A significant share of data centre spending goes towards imported servers, semiconductors, cooling systems and specialised IT equipment, limiting domestic value addition. Moody’s noted that data centre-related imports have accelerated since 2023, particularly in India, Thailand and Vietnam.
India attracts more than $250 billion in announced investments
India has been attracting significant investment in data centre capacity, with domestic conglomerates, global technology companies and smaller independent firms together announcing more than $250 billion in investments as they bet on the sector’s growth. Among the major projects are Google and Adani’s $15-billion, 1-gigawatt (GW) data centre project in Visakhapatnam and Tata Consultancy Services’ $7-billion, similarly sized HyperVault project, announced in October 2025.
Amid heightened investor interest in data centres, Union Finance Minister Nirmala Sitharaman announced earlier this year a complete tax holiday until 2047 for foreign cloud service providers that use Indian data centres to host data or run workloads.
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