India is emerging as one of the biggest data centre investment destinations in South and Southeast Asia, but the multi-billion-dollar build-out may have only a modest impact on the country’s overall economic growth because a large share of equipment is imported, Moody’s Ratings said.
Data centre capital expenditure is projected to add about 0.10% to India’s 2025 nominal GDP during the construction phase, while investment in additional power generation could contribute another 0.03%. Even after the facilities become fully operational, their contribution is expected to be only 0.13% of GDP, Moody’s projections through 2030 showed.
“India’s planned investment and construction employment are substantial in absolute terms but small relative to the size of the economy,” Moody’s said in a report. The investments are strategically and locally important, it added, but are “not yet large enough to materially change the national growth profile”.
India and Malaysia are expected to account for the bulk of planned data centre capital spending in the region. Malaysia, however, is likely to gain considerably more at the economy-wide level. Data centre construction there is projected to contribute 0.86% of GDP and full operations as much as 1.75%, compared with 0.10% and 0.13%, respectively, for India.
High Import Intensity
A key constraint for India is the sector’s high import intensity. A significant portion of data centre spending goes towards imported servers, semiconductors, cooling systems and specialised IT equipment, limiting domestic value addition. Moody’s noted that data centre-related imports have accelerated since 2023, particularly in India, Thailand and Vietnam.
The employment gains are also expected to remain modest because data centres are highly capital-intensive. Construction-related employment is estimated at around 0.01% of 2025 industry employment, rising to 0.02% once the facilities are fully operational. Long-term employment is likely to be limited and concentrated in specialised roles.
Manageable Power Demand
Power availability, however, is unlikely to become a nationwide constraint. Moody’s expects data centres to account for less than 5% of India’s total electricity demand by 2030, leaving the country better placed than smaller regional markets to absorb incremental load. Timely transmission and distribution connectivity to major clusters such as Mumbai will remain critical.
Moody’s said the longer-term payoff will depend on whether the investment triggers supplier localisation, cloud adoption, digital-services exports and wider ecosystem development. Without these spillovers, the economic gains could remain concentrated largely in construction, telecommunications and infrastructure providers.