Transmission infrastructure takes 3-4 years while data centres are built in 12-18 months, creating a standoff over who pays for upgrades. States race to install new sub-stations.
India's data centre operators have committed over $250 billion in new capacity over the past year. The power grid is not keeping up. Transmission lines and sub-stations take three to four years to build, while data centres are ready in 12 to 18 months.
The power ministry told Parliament on 27 July that data centres will add 26.3GW of load to the national grid by fiscal 2032. India's operational data centre capacity stood at 1.12GW as of June 2025, according to a JLL report published last October.
For operators, the primary bottleneck has shifted from land to power. “Securing adequate, reliable, and scalable power has become increasingly challenging,” said Sunil Gupta, chief executive of Yotta Data Services. The biggest delays come from building high-voltage sub-stations, which require land acquisition and regulatory approvals across multiple authorities. Sridhar Pinnapureddy, chief executive of CtrlS Datacenters, said the net investment could run into “a few lakh crore rupees.”
The cost-sharing model varies. State distribution companies typically fund sub-stations unless they sit inside a data centre campus. Developers pay for transmission lines, step-down transformers, and internal cabling.
State-level examples show the strain. In Maharashtra, a senior official at the Maharashtra State Electricity Transmission Company Limited (MSETCL), speaking anonymously, said the existing network “cannot support the scale of demand being sought by AI developers.” Mumbai's total demand is about 4.5GW; supplying the next 5GW would require new 400kV and 765kV sub-stations and high-voltage lines. Building that would take four to five years. Over the past four months, public and private firms have poured ₹1,500 crore into upgrading Maharashtra's power infrastructure. Bajel Projects alone won contracts worth more than ₹1,500 crore from MSETCL, Tata Power, PowerGrid Corporation, and an unnamed data centre company. The state expects 5GW of data centre load by 2030.
In Odisha, current infrastructure can support up to 80MW. Scaling to hyperscale campuses will demand entirely new transmission infrastructure, said Hemant Sharma, the state's additional chief secretary for industries. Odisha released a data centre policy in April 2022 and has drawn investments from HCLTech, Sarvam, the Adani Group, CtrlS, and Airtel subsidiary Nxtra. The state is installing a 400kV sub-station expected in 12-14 months and a new 765kV grid that will take 2.5 to 3 years.
In Tamil Nadu, Chennai is India's second-largest data centre hub. A senior Tangedco official, also speaking anonymously, said existing facilities are accommodated. Expanding capacity takes years because land for new sub-stations is scarce.
The timeline mismatch between project construction and grid readiness is acute. Sabyasachi Majumdar, senior director at CareEdge, said data centres are ready in 12-18 months and solar farms in 18-24 months, while transmission infrastructure still takes three to four years. “Regulators, discoms, transmission utilities and private companies need to plan long-term.”
AI workloads are compounding the problem. A July 2026 report by KPMG said AI racks require 50-60kW each, compared with 8-12kW for conventional racks, demanding heavier-duty power distribution and stronger grid connectivity. Vijay Agarwal, managing director at Equirus Capital, said India curtailed about 300GWh of renewable electricity in Q1FY26 because the transmission network could not carry it to where it was needed. “That challenge becomes more acute when AI campuses require hundreds of megawatts of uninterrupted power around the clock.” He added that power reliability and interconnection throughput are now the primary differentiator, ahead of land and headline incentives, because incentives have largely converged across states while grid delivery has not.
The JLL report noted India's operational data centre capacity at 1.12GW as of June 2025. JLL's Alpha Score is 57/100, reflecting moderate positioning in the real estate sector. JLL stock page
“If a data centre wants 500MW or 1GW of power capacity within a year, that demand can’t be met,” the MSETCL official said.
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