For over two decades, data centres have quietly powered the global digital economy—the unseen architecture behind everything from banking to communication. That reality is now changing. As our dependence on technology deepens, the global environment is increasingly defined by geopolitical fault lines. Questions like where data is stored, how it travels across borders, and how secure it is during that journey are no longer just technical—they are now strategic.
The ongoing West Asia conflict involving the US, Israel, and Iran, have made this shift even more visible. A spate of recent incidents, particularly the attacks on cloud infrastructure in the Gulf, show that even advanced digital systems are vulnerable. What was once seen as neutral infrastructure is now being looked at in terms of risk and security.
At the same time, the scale of the industry has grown significantly. Data centre investments today rival major infrastructure sectors, with the US accounting for over 40% of global capacity. Driven by cloud computing and the rapid rise of AI workloads, digital infrastructure has become both indispensable and more exposed.
Data centres are no longer just supporting systems. They are becoming central to financial networks, public services, and national security frameworks.
Recent disruptions are making companies and hyperscalers rethink where they set up their infrastructure. West Asia has long been a key link between Asia and Europe, but these events have shown the risks of depending too much on one region.
{{/usCountry}}Recent disruptions are making companies and hyperscalers rethink where they set up their infrastructure. West Asia has long been a key link between Asia and Europe, but these events have shown the risks of depending too much on one region.
{{/usCountry}}A clear shift is also visible. Companies are spreading their operations across different locations instead of relying on a single hub. The idea is simple—not just to run efficiently, but to make sure things don’t come to a halt if something goes wrong.
This becomes clearer when we look at how fragile global digital infrastructure actually is.
A large share of the world’s internet traffic moves through undersea cables in the Red Sea and the Strait of Hormuz—areas that are currently facing geopolitical tensions. If these routes are disrupted, it can slow down data, affect bandwidth, and impact reliability across regions.
At the same time, supply chains are also under stress. Many planned data centre projects are getting delayed because of power issues, lack of equipment, and logistics challenges. All of this shows that digital infrastructure doesn’t operate in isolation—it is closely linked to real-world conditions and global developments.
As a result, the way resilience is defined is evolving.
Earlier, redundancy meant having backup systems within the same city. Today, that is no longer sufficient. Companies are increasingly spreading infrastructure across regions and jurisdictions to reduce concentrated risk.
There is also growing interest in new approaches such as “data embassies,” where critical systems are hosted in stable, cross-border environments. Alongside this, the focus is expanding from data sovereignty to what is now being termed “compute sovereignty”, ensuring that not just data, but the infrastructure processing it, remains secure and accessible.
Energy is emerging as another key factor. Data centres are among the most energy-intensive assets in the modern economy, and disruptions in global energy markets, particularly those linked to West Asia, can directly impact operational costs and reliability.
As AI workloads continue to grow, the pressure to build more efficient facilities will only increase. This means integrating renewable energy, adopting advanced cooling technologies, and designing smarter power systems from the outset. Energy resilience is no longer an afterthought; it is central to how infrastructure is planned.
In this evolving environment, countries that can offer stability, scale, and policy clarity are beginning to stand out, and India is increasingly part of that conversation.
India’s data centre capacity has grown rapidly—from about 375 MW in 2020 to over 1,500 MW by 2025—and is expected to expand by nearly 30% in 2026, with around 500 MW of new capacity being added. This growth is backed by strong domestic demand, rising internet usage, and the steady expansion of digital services.
At the policy level, there is also a clear push towards building a more secure and self-reliant digital ecosystem. The Digital Personal Data Protection (DPDP) Act has laid the groundwork for stronger data governance, with a focus on consent, security, and accountability. Alongside this, the government’s broader focus on e-governance, Make in India, and Atmanirbhar Bharat is encouraging more data and digital infrastructure to be built and managed within the country.
Importantly, the Prime Minister’s vision, supported by forward-looking policies and reforms, is playing a key role in positioning India as a future-ready digital infrastructure hub and strengthening its path towards becoming a global data centre (DC) leader.
A key step in this direction is the framework introduced by the ministry of electronics and information technology (MeitY), which classifies government data based on sensitivity. Critical datasets such as Aadhaar, PAN, passports, and tax records are required to be hosted on government or sovereign cloud infrastructure, while less sensitive data can be managed through empanelled providers with safeguards. This structured approach strengthens data localisation while improving overall security standards.
Recent fiscal measures are also adding momentum. Union Budget 2026–27 has proposed a long-term tax holiday—extending up to 2047—for foreign cloud providers using India-based data centres to serve global markets. This is likely to attract more global players and position India not just as a domestic hub, but as a strategic base for international data flows.
Together, these developments are steadily shaping India into a credible and competitive destination in the global data centre landscape.
There’s a lot of opportunity here, but it’s not without challenges. A large part of India’s international data traffic still depends on routes that pass through sensitive regions. If something goes wrong there, it could slow things down or affect reliability.
There are other concerns too. Supply chain issues and rising energy costs could impact how quickly new capacity is added. Managing these risks will be important if the growth is to stay steady over the long term.
What we are seeing right now is not just a short-term disruption. It points to a deeper change in how digital infrastructure is being planned and built. The focus is slowly shifting. It’s not only about efficiency anymore—resilience is becoming just as important. Instead of staying close to one location, companies are spreading out to reduce risk. And increasingly, these decisions are influenced as much by global politics as by technology.
Looking ahead, India is well-positioned to emerge as one of the leading data centre hubs globally. With its strong demand base, improving infrastructure, policy support, and strategic location, the country is not just participating in this shift—but is set to play a defining role in shaping the future of the global data centre ecosystem.
(The views expressed are personal)
This article is authored by Amit Sarin, managing director, Anant Raj Ltd.