India's industrial equipment manufacturers are poised to benefit from a capital expenditure opportunity of USD 35 billion, driven by the rapid growth of the country's data center (DC) industry, according to a report by Nomura.
Rapid Growth of India's Data Center Industry
The Indian DC industry has been expanding at a swift pace, with DC IT load increasing from 350 MW in 2019 to an estimated 1.5-1.6 GW in 2025. This reflects a compound annual growth rate (CAGR) of 29 percent, significantly higher than the global average of 20 percent, as stated in the report.
The brokerage firm forecasts that the DC industry will continue to grow, reaching approximately 7 GW by 2030, at a CAGR of 30 percent from 2025 to 2030. This expansion is expected to unlock attractive opportunities for industrial equipment manufacturers.
Investment Opportunity for Equipment Manufacturers
Nomura estimates that incremental capacity of 5.1 GW until 2030 will provide a capex opportunity of USD 35 billion. A majority of this investment will be captured by industrial equipment manufacturers supplying electrical, mechanical, and cooling solutions to data centers.
India's share in global DC capacity has consequently increased from 1.5 percent in 2019 to 2-3 percent in 2025. Based on announced pipelines, the industry has visibility on over 15 GW of incremental capacity over the next decade, with expectations that India's DC capacity will reach 7 GW by 2030.
Key Drivers and Cost Advantages
The industry is being supported by increasing cloud and AI adoption, as well as rapid digitalization. Furthermore, India remains cost-efficient, with construction costs of USD 6-7 million per MW compared to USD 10-18 million per MW across developed Asia-Pacific and Western markets.
Nomura noted that competitive electricity sourcing at USD 7-8 cents per kilowatt-hour through open access, renewable power purchase agreements (PPAs), and captive power arrangements further strengthens India's operating cost advantage.
Supply-Side Prospects
The DC industry, led by a large announced pipeline of over 15 GW on the supply front, is creating favorable prospects for industrial equipment manufacturers due to robust demand and sustainable premium pricing trends.
Companies operating in switchgear, transformers, generator sets, UPS systems, cooling equipment, and rack infrastructure are expected to benefit from sustained premium pricing and multi-year order visibility. Overall, this presents a compelling long-term opportunity across both DC developers and the broader supply chain.
Product Categories with High Exposure
Nomura identified five product categories that together absorb 60-75 percent of a data center's capex budget, which ranges from USD 10-22 million per MW:
- Medium- and low-voltage switchgear and transformers
- UPS and battery systems
- Backup diesel and gas generator sets
- Precision cooling and liquid-cooling distribution units
- Rack, busway, and structured cabling infrastructure
The brokerage firm emphasized that the most attractive exposure for investors lies in the industrial supply chain.
