India’s optical fiber cable sector is experiencing unprecedented growth, fueled by rapid digitalization, expanding 5G networks, and the increasing adoption of cloud and artificial intelligence (AI). According to a recent CBRE report, India’s data center capacity is projected to nearly double from 950 MW to 1,800 MW by 2026.
Key Drivers of Data Center Growth
One of the primary reasons for this surge in data center infrastructure is the rising popularity of AI-driven tools and applications, which are significantly boosting demand for high-speed connectivity. AI-powered applications, particularly machine learning and deep learning, require extensive computational power, leading to the emergence of AI-optimized data centers.
“High-performance computing powered by GPUs, high-bandwidth fiber optic networks, and large-scale storage solutions are critical for India’s AI adoption,” said Aniruddha Chakrabarti, Partner – AI & Cloud at Grant Thornton Bharat.
Major Investments in AI and Data Centers
Significant investments are pouring into India’s AI and data center infrastructure:
- Reliance Industries is developing a 3GW AI data center in Jamnagar.
- Microsoft recently announced a $3 billion investment in AI and cloud infrastructure.
- Amazon Web Services (AWS) is investing $8.3 billion in Mumbai and another ₹600 billion ($6.9 billion) for data centers in Hyderabad.
- Sify, CtrlS, and STT Global are also expanding their data center presence across India.
“India’s fiber demand is projected to triple to 60 million fiber kilometers annually by 2030, driven by 490 million 5G subscribers and 100 million fiber-connected homes,” said Naivedya Agarwal, MD of Runaya, a company ramping up the production of fiber-reinforced plastic (FRP) rods used in optical fiber cables.
5G and Digital Economy Boosting Fiber Deployment
Apart from AI, India’s booming digital economy is a major contributor to fiber expansion.
- Rising mobile data usage demands increased backhaul from cell towers, which relies heavily on fiber optics.
- Enterprise cloud adoption is driving demand for high-bandwidth fiber connections.
- Fiber-to-the-Home (FTTH) expansion requires substantial fiber deployment for high-speed residential broadband.
“India’s digital economy needs high-speed, high-capacity connectivity, making fiber densification essential,” said Kunal Bajaj, CEO of CloudExtel, a Network-as-a-Service (NaaS) provider, which plans to expand its fiber network by 40% in 2025.
India’s leading telecom players, Reliance Jio and Bharti Airtel, are also aggressively expanding fiber infrastructure. Airtel deployed 55,982 Rkm of fiber in FY 2023-24 and had already added 47,100 km by December 2024.
Government Initiatives Driving Growth
Several government-led initiatives, including Digital India and the National Broadband Mission, are accelerating fiber deployment. The recent Union Budget 2025 allocated ₹20 billion ($230 million) for the IndiaAI Mission, aimed at enhancing AI infrastructure, data centers, and fiber connectivity.
Challenges and Future Outlook
Despite this rapid expansion, limited fiber penetration still affects connectivity in rural and semi-urban areas. “Insufficient fiber leads to network congestion, slower internet speeds, and unreliable connectivity, hampering India’s global digital competitiveness,” said Arun Menon, Principal Analyst at MTN Consulting.
Fiber infrastructure is critical for 5G adoption, AI-driven data centers, and cloud services. Chakrabarti of Grant Thornton Bharat warns that a lack of adequate fiber could delay India’s AI infrastructure development, slowing progress in AI model training and nationwide 5G rollout. As India continues to push for AI dominance and digital transformation, fiber-optic networks will remain the backbone of this revolution, ensuring seamless, high-speed connectivity across industries.
