Union Minister Piyush Goyal Chaired a productive roundtable on Ease of Doing Business (EoDB) to scale India’s data centre ecosystem.
NEW DELHI: Union Commerce and Industry Minister Piyush Goyal chaired a CEO roundtable on September 2 at Vanijya Bhawan, bringing together officials from eight states and roughly 46 data-centre companies to tackle the operational friction slowing India’s digital infrastructure buildout. The session, a follow-up to an earlier roundtable, focused squarely on execution: land banks, power reliability, cross-state clearances and building codes suited to high-density AI workloads.
Goyal called India the “world’s best location” for data centres, tying the sector’s growth to the country’s $30 trillion economy target by 2047. Notably, several industry participants told the Minister that his cited $200 billion investment potential figure looked conservative given accelerating AI demand, with one executive from Turner & Townsend pointing to a broader $700-800 billion ecosystem opportunity.
Where India Actually Stands
India’s operational data-centre capacity reached roughly 1.5 GW by late 2025, with 387 MW added that year alone. Industry forecasts diverge on where this goes next: conservative estimates put 2030 capacity between 3.5 and 4.5 GW, while more aggressive projections see it exceeding 6.5 GW on the back of AI inference workloads overtaking training as the primary compute driver by 2027. Mumbai remains dominant, holding 41 to 50 percent of national capacity, while Chennai, Hyderabad, Delhi NCR, Pune and Bengaluru trail as secondary hubs.
The Bottlenecks Nobody Can Policy Away
The roundtable’s real substance lay in naming specific friction points rather than headline ambitions. Substation lead times and grid interconnection delays remain the single biggest constraint, with speed-to-power now the primary factor in site selection; delayed sub-transmission infrastructure can extend project timelines by 12 to 24 months. Land aggregation is a parallel problem, since pre-zoned, power-ready parcels remain scarce, forcing operators to stitch together fragmented plots with encumbered titles. Layered on top are rising construction costs, shell and core real estate now runs $10.7 to $11.3 million per megawatt, while AI-specific GPU fit-outs add another $20 to $25 million per megawatt, and a persistent shortage of engineers trained in liquid cooling and high-density systems.
What’s Actually Been Fixed
Not everything remains stuck in bureaucracy. The National Building Code 2026 now formally classifies data centres under a dedicated Group E category with its own fire-risk and performance standards, resolving years of ambiguity where municipal authorities treated data centres like generic commercial or industrial buildings. The Union Budget 2026-27 added two concrete fiscal anchors: a tax holiday running until 2047 for foreign cloud providers using India-based infrastructure, and a 15% safe harbor margin that reduces transfer-pricing disputes for domestic operators serving related foreign entities. Goyal also confirmed some grid connectivity issues were resolved on the spot during the session itself, while more complex technical matters were handed to newly formed sub-committees with time-bound mandates.
The State-Level Patchwork
Because power distribution, land allocation and building approvals are constitutionally state subjects, central policy only goes so far. States have responded with their own competing frameworks: Maharashtra offers a permanent 100% electricity duty exemption under its 2023 IT/ITeS policy, Telangana classifies data centres as an essential service exempt from power cuts, Tamil Nadu offers relaxed floor-space norms and stamp duty concessions, and Uttar Pradesh provides capital subsidies alongside labour law relaxations. Each state channels applications through its own single-window portal, MAITRI in Maharashtra, TS-iPASS in Telangana, meaning national policy coherence still depends heavily on uneven state-level execution.
The Real Test Ahead
Four prerequisites will determine whether committed capital actually translates into built capacity: guaranteed Day-1 power loads with dual feeders rather than reactive grid allocation, harmonised renewable energy wheeling rules that let operators source power across state lines, timely municipal adoption of the new NBC Group E classification, and prompt CBDT guidelines clarifying how the tax holiday will actually work in practice. None of these has a firm public timeline yet.
What to Watch
The sub-committees formed at the roundtable carry no published terms of reference, membership structure or reporting schedule, making their eventual output the clearest signal of whether this translates into binding reform or remains an advisory exercise. Over the next six to twelve months, the concrete markers worth tracking are state gazette notifications adopting NBC 2026 Group E rules, CBDT’s operational guidance on the tax holiday, Central Electricity Authority rules for Day-1 sanctioned loads, and state industrial corporations actually releasing pre-zoned land banks. India’s macroeconomic pitch for data-centre investment is strong; whether the plumbing keeps pace with the ambition is the question this roundtable was really trying to answer.
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