Data Centres to Add Just 0.13% to India GDP: Moody’s
Billions in planned investments could boost digital infrastructure, but limited jobs and imported equipment may constrain economic gains
By Anjali Sharma
WASHINGTON – Moody’s Ratings on Friday said that India’s rapidly expanding data centre industry may attract billions of dollars in investment over the coming years, but its direct contribution to the country’s economic output is likely to remain relatively small.
Moody’s said that data centers may add just 0.13% to India’s GDP by 2030 despite billions in investments.
The rating agency estimated that data centre-related investments could contribute around 0.13 per cent to India’s GDP by 2030.
The data centre construction and capital expenditure are expected to account for about 0.10 per cent of nominal GDP in 2025, while investment in additional power generation could contribute another 0.03 per cent.
The contribution is expected to remain around 0.13 per cent even after the facilities become fully operational, highlighting the capital-intensive nature of the industry, it 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 could have considerable strategic and regional significance, they are not currently large enough to significantly alter the country’s overall growth trajectory, it added.
The sector is also unlikely to become a major source of employment because operating data centres requires substantial capital but relatively few workers.
Moody’s estimated that construction-related employment linked to the sector will be equivalent to around 0.01 per cent of India’s industrial employment in 2025, increasing to approx 0.02 per cent once the facilities become operational.
The ratings firm said that most of the long-term jobs are expected to be concentrated in specialized areas, limiting the industry’s overall employment impact.
Moody’s said India’s relatively large power system means that the additional electricity requirement from data centres is unlikely to become a nationwide constraint by 2030.
Data centres are projected to account for less than 5 per cent of India’s total electricity consumption by 2030.
The ability to provide reliable transmission and distribution infrastructure near major data centre hubs will remain important.
Mumbai and other emerging clusters could particularly require timely grid connectivity as new facilities come online.
One of the biggest challenges for India is the industry’s dependence on imported equipment.
A substantial portion of data centre investment is directed towards servers, semiconductors, cooling equipment and specialized IT infrastructure, much of which is sourced from overseas. This limits the amount of economic value that is retained domestically.
Moody’s noted that imports associated with data centre development have accelerated since 2023, with India, Thailand and Vietnam among the markets witnessing a notable increase.
The longer-term economic benefits for India will therefore depend on whether the investment encourages greater localization of suppliers, wider adoption of cloud services, increased digital-services exports and the development of supporting industries.
India has emerged as a major destination for data centre investment, with domestic conglomerates, global technology companies and independent operators announcing more than $250 billion in planned investments as they seek to capitalize on rising demand for digital infrastructure.
The firm stated that 1-GW data centre initiative by Google and Adani in Visakhapatnam.
Tata Consultancy Services has also announced a $7-billion, 1-GW HyperVault project, which was unveiled in October 2025.
The scale of these proposed investments underscores the growing strategic importance of data infrastructure, even though their immediate contribution to national GDP and employment remains limited.
The government has also introduced measures aimed to attract global cloud companies to India.
Union Finance Minister Nirmala Sitharaman announced a full tax holiday until 2047 for foreign cloud service providers that use Indian data centres to host data or run workloads.
The incentive is intended to strengthen India’s position as a global hub for cloud computing and data infrastructure, it added
Moody’s assessment suggested that the broader economic impact will depend less on the construction of data centers and more on whether the investments generate domestic supply chains, digital exports and wider technology adoption.
