In the era of digital transformation, a structural shift is underway in how economies grow and how industries contribute to national output. Gross domestic product (GDP) has been the standard candle for measuring a country’s economic output, factoring in government and consumer spending, manufacturing, exports, and services. Increasingly, however, digital infrastructure, particularly data centres and cloud computing platforms, is emerging as a foundational driver of economic value creation.
The scale of this shift is massive. Recent analysis by Harvard economist Jason Furman showed investments in data centres and cloud-related infrastructure in the US in the first half of 2025 accounted for roughly 4% of GDP. However, they contributed over 90% of GDP growth.
Earlier, Renaissance Macro Research also estimated that the dollar value contributed to GDP growth by AI data centres had surpassed US consumer spending.
For India, the story is quite different. Data centres rarely appear as consumer-facing industries. Instead, they enter national accounts as capital formation, construction, servers, networking equipment, and software.
But at a sufficient scale, the conversation changes. Market research firm Grand View Research estimated that the Indian data centre market generated around $9.17 billion in 2024, based on comparative industry analysis, and this figure is expected to reach nearly $22 billion by 2030.
Now, with cloud adoption accelerating across enterprises and government in India, this raises a key question: Is the economic contribution of digital infrastructure being systematically undercounted?
India’s Digital Infrastructure Inflexion Point
Industry leaders argue that India is already at a pivotal moment. “India’s rapid expansion in cloud adoption and digital infrastructure marks a pivotal inflexion point for economic value creation,” Dhiraj Udapure, CTO of IT firm SCS Tech India, told AIM.
“At SCS Tech, we see data centres and cloud services evolving from backend enablers into core contributors to India’s GDP over the next decade,” he added.
Multiple structural forces are driving this transition. Data localisation mandates, AI-led workloads, and the scale of India’s digital public infrastructure, such as UPI, Aadhaar, and ONDC, are increasing demand for domestic compute and secure cloud environments.
At the same time, enterprises across BFSI, manufacturing, healthcare, telecom, and government are migrating mission-critical workloads to hybrid and multi-cloud models.
“From a GDP perspective, the impact will be both direct and indirect,” Udapure explained. “Directly, data centres generate high-value capital investment, skilled employment, and recurring service revenues. Indirectly, they act as multipliers, fuelling innovation in AI, SaaS, IoT, and digital services that are exportable at scale.”
This distinction is critical. While data centre revenues alone may appear modest relative to India’s overall GDP, their downstream effects on productivity, exports, and innovation are significantly larger.
GDP Input or Economic Output?
One reason data centres remain underrepresented in GDP conversations is that much of their economic value materialises over time. The construction of a data centre contributes immediately through capital expenditure and employment. The larger impact, however, comes later, through the digital services, platforms, and productivity gains.
Productivity improvements driven by cloud computing, faster analytics, automation of routine processes, real-time decision-making, and AI deployment are diffused across sectors and only partially captured in traditional GDP accounting.
“Hybrid multi-cloud is creating impact far beyond traditional data-centre revenues by enabling modernisation, automation, and AI readiness across industries,” said Faiz Shakir, VP and MD (India and ASEAN) of cloud computing company Nutanix.
“While we don’t assign GDP figures, its role as a digital foundation is clear, helping sectors like BFSI, healthcare, manufacturing, and public services scale securely, optimise costs, and accelerate time-to-market,” he added.
Shakir emphasised that cloud infrastructure should be understood as a productivity multiplier, not merely an IT expense. As organisations adopt containerisation, AI platforms, and cloud-native architectures, new skill clusters and partner ecosystems emerge, feeding into longer-term economic competitiveness.
According to JLL, India’s installed data centre capacity has increased from roughly 350 MW in 2019 to over 1 GW by 2024, driven by cloud adoption, data localisation requirements, and rising AI workloads.
This infrastructure build-out is expected to continue as India’s AI data centre market expands rapidly. According to Grand View Research, India accounted for roughly 4.3% of the global AI data centre market in 2024, generating approximately $588.6 million in revenue in 2024.
From Support Layer to Strategic Infrastructure
Operators running India’s data centre backbone argue that the sector’s role now closely resembles that of traditional infrastructure such as power or transport.
“India’s digital infrastructure is increasingly becoming a foundational layer of the economy, and data centres sit right at the core of that transformation,” said Vipul Kumar, VP of Edge and Network, CtrlS.
Kumar noted that focusing only on direct revenues obscures the broader picture. “While data centre revenues today may appear as a relatively small line item within India’s overall GDP, their multiplier effect is already significant and will become far more visible over time.”
That multiplier spans nearly every digital sector. “Every major digital activity, cloud services, fintech, e-commerce, AI, digital public platforms, telecom, and enterprise IT, ultimately depends on resilient, scalable data centre infrastructure,” he added.
As digital adoption spreads beyond metros into tier-2, 3 cities, the role of data centres as economic enablers is also intensifying. Edge infrastructure, regional cloud availability, and domestic capacity expansion are linking digital growth more closely to local economies.
“As India’s digital economy expands across metros and non-metros alike, the economic contribution of data centres will grow not just through direct revenues, but through job creation, capital investment, energy ecosystems, and the enablement of downstream digital services,” Kumar highlighted.
Reducing the Measurement Gap
Unlike the US, where data centre investment has been identified as a visible driver of GDP growth, India’s contribution remains embedded within broader categories such as IT services and digital services. This makes the sector’s economic importance harder to quantify, even as its real-world impact accelerates.
Yet the signals are increasingly difficult to ignore: rising enterprise cloud spend, growing IT and digital services exports, expanding startup ecosystems, and sustained investment from hyperscalers and domestic players alike.
At SCS Tech, this evolution is already visible on the ground. “As cloud becomes the backbone for startups and global capability centres, India’s digital services exports are likely to see significant upside,” Udapure noted.
“With the right policy support and continued private investment, data centre and cloud ecosystems can emerge as a measurable, high-growth contributor to India’s GDP, much like IT services did in earlier decades,” he added.
As AI workloads scale, hybrid cloud adoption deepens, and data localisation strengthens, the economic footprint of data centres and cloud infrastructure in India is set to expand further. The challenge ahead lies not only in building capacity, but in recognising digital infrastructure as a long-term growth asset rather than a background utility.
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