A global race between US tech giants—Microsoft, AWS, Meta, and Google—to build infrastructure for hosting AI services has opened up a multi-billion-dollar opportunity for India, one that could turn it into a regional AI powerhouse. Policymakers see this as a “once-in-a-generation” opportunity, as recently noted by BVR Subrahmanyam, CEO of NITI Aayog, the Indian government’s think tank.

The ‘hyperscalers’ (as these tech giants are referred to) have collectively committed to investing close to $300 billion in 2025 alone. About 13% of that is earmarked for the Asia Pacific-Japan region, translating to approximately $40 billion. India has a shot at capturing a significant portion of this investment, according to government officials and executives from Google, Microsoft, and AWS who spoke with The CapTable.

However, while the first round of capital expenditure by cloud majors is already underway, India’s success as a global AI infrastructure destination is not guaranteed. There are infrastructural challenges that need to be resolved, and there are Asian rivals who are breathing down India’s neck to secure this windfall for themselves.

With massive investment at stake, there’s a palpable sense of urgency in official circles now. While the Ministry of Electronics and IT (MeitY) has been working on a draft data centre policy for years, the process has recently been revived under top-level directions, a government official said. MeitY and NITI Aayog are conducting parallel consultations with stakeholders to address pain points and attract AI infrastructure investments. But can the wheels of Indian bureaucracy move fast enough?

Playing catch-up

In April, MeitY held its first consultation with a newly formed special interest group on data centres. The group includes officials from the electronics, IT, power, finance, and commerce ministries, as well as industry body Nasscom. NITI Aayog followed this with an extensive consultation involving state representatives, central ministries, and industry stakeholders on May 8.