Friday 13 / November / 2026
India is strengthening its position as a major destination for global data-centre investments, supported by faster project development, renewable energy availability and favourable government policies. The country's data-centre capacity is expected to expand fivefold to 8 gigawatts over the next three years, as demand for artificial intelligence (AI) infrastructure continues to rise.
Against this backdrop, global investment firm KKR is exploring the sale of its Indian data-centre portfolio, which could be valued at around $5 billion. The proposed divestment reflects growing investor interest in India's digital infrastructure market at a time when supply-chain uncertainties and construction delays are affecting other markets.
India is increasingly viewed as a competitive location for developing large-scale AI data centres compared with the United States and several other Asian economies. Access to renewable energy and land with existing power infrastructure allows projects to be completed more quickly.
A data-centre development with access to powered land can be completed in approximately two years in India, compared with three to six years in the United States. Government incentives, including a tax holiday for foreign companies extending through 2047, are providing additional momentum to the sector.
Potential disruptions to advanced semiconductor supplies could further influence investment decisions. Supply constraints linked to geopolitical tensions involving China may slow data-centre development in some Asian markets, creating opportunities for India to attract additional investment.
KKR weighs exit from Indian data-centre business
KKR is seeking to sell its Indian data-centre portfolio, which forms part of ST Telemedia Global Data Centres (STT GDC). KKR acquired the platform alongside minority partner Singapore Telecommunications in February in a transaction that valued the business at an enterprise value of $11 billion.
In India, STT GDC holds a 74 per cent stake in a portfolio with capacity exceeding 600 megawatts, while Tata Communications owns the remaining 26 per cent.
KKR and Tata Communications had previously considered an initial public offering (IPO) to monetise their investments. However, an outright sale could provide KKR with a more direct exit, even if the final valuation is lower than what could potentially be achieved through a public listing.
Tata Communications is among the potential buyers. However, a transaction involving the existing minority shareholder could face complications amid broader leadership and control issues within the Tata Group.
Capacity expected to reach 8 gigawatts
India's data-centre industry is entering a period of rapid expansion, driven by rising requirements for cloud computing, digital services and AI applications.
Total installed capacity is projected to increase fivefold to 8 gigawatts over the next three years, underlining the scale of investment opportunities in the sector.
The availability of renewable energy is another important advantage, as data-centre operators increasingly seek reliable and sustainable power sources to support energy-intensive computing operations.
With relatively shorter construction timelines, government incentives and growing digital demand, India is positioning itself as an important destination for international data-centre developers and investors.
KKR's potential $5 billion portfolio sale further highlights the growing commercial value of the country's data-centre assets and the increasing global interest in India's AI infrastructure market.
