Chennai’s data centre capacity is projected to grow from 202 MW in 2025 to 551 MW by 2030, registering a compound annual growth rate (CAGR) of 22%, according to a new report by ASSOCHAM in collaboration with PwC. Titled “Knowledge Paper on Empowering Global Digital Change: Tamil Nadu’s Data Centre and Cloud Vision,” the report highlights Chennai’s strategic location, strong infrastructure, and investor-friendly government policies as key growth drivers.
Released by Tamil Nadu IT Minister Palanivel Thiaga Rajan at the 7th ASSOCHAM Smart Data Centres & Cloud Infrastructure Conclave 2025, the report credits the state’s Data Centre Policy 2021 for providing tax incentives, land subsidies, and power tariff concessions—measures that have helped position Tamil Nadu as a leading data centre hub.
Beyond Chennai, cities like Coimbatore and Madurai are also emerging as attractive destinations due to their industrial base, skilled workforce, and growing IT ecosystems. The report also points to the rise in AI adoption, GPU-based computing, and a shift toward energy-efficient ARM-based processors as fueling demand for advanced data infrastructure.
To further accelerate growth, the report recommends enhanced subsidies for sustainable technologies, tax benefits for green-certified facilities, and targeted training programs in partnership with educational and industry stakeholders. It also emphasizes the need to invest in expanding power and internet infrastructure, including undersea cables and grid upgrades, to ensure reliable, high-speed connectivity.
Speaking at the event, Minister Rajan said, “If we can capture a significant share of this growth, Tamil Nadu can become a platform for innovation in the AI era. With our talent, data, and infrastructure, we’re well-positioned to lead.”
