India emerges as global digital infrastructure hub with major tech investments
Big tech push shifts India from IT services to a digital infrastructure powerhouse
India is emerging as a core hub for cloud, artificial intelligence and data infrastructure, moving beyond its long-standing role as a services-led IT economy as global tech firms commit major investments to the country.
Microsoft has pledged $17.5 billion (Dh64.2 billion) over the next four years, while Amazon has outlined investments of more than $35 billion, largely focused on cloud infrastructure, data centres and AI capabilities.
The size, duration and capital-intensive nature of these commitments mark a shift from earlier phases of global tech engagement, which were dominated by software services, outsourcing and lower-cost talent.
These investments position India not just as a large consumer market, but as an infrastructure geography where compute, storage, platforms and AI systems are being built at scale to support domestic, regional and global workloads.
“Microsoft’s $17.5 billion investment in India over the next four years reflects India’s central role in our global AI and cloud roadmap — not only as a large and growing market, but as a place where AI can be deployed at population scale,” says Puneet Chandok, President, Microsoft India and South Asia.
“As India moves from digital public infrastructure to AI public infrastructure, this investment is focused on enabling that transition through world-class hyperscale infrastructure, secure and trusted platforms, and skilling initiatives that support developers, enterprises, start-ups, and public institutions,” Chandok adds.
Digital economy scales up
India’s growing role as a digital infrastructure hub is underpinned by the rapid expansion of its digital economy. According to a Ministry of Electronics and Information Technology–commissioned report by the Indian Council for Research on International Economic Relations (ICRIER), the digital economy accounted for 11.74 per cent of national income in 2022–23, equivalent to Rs28.9 trillion ($320 billion) in gross value added and Rs31.6 trillion in GDP. The report projects the digital economy’s share could approach one-fifth of GDP by 2030.
For global technology firms, the scale matters, as India is increasingly being treated as a long-term infrastructure base rather than a peripheral services location.
Why investments are accelerating
Industry experts say the surge in large-scale technology investment reflects structural changes that have matured over the past decade.
“These commitments signal a structural shift in India’s role within the global technology ecosystem. While services and talent remain important, India is increasingly being positioned as a destination for long-term, capital-intensive digital infrastructure, including hyperscale cloud regions, data centres, and AI platforms,” says Kaustubh Wagle, Managing Director and Partner at BCG.
“India is being financed not just as a user market or talent pool, but as an emerging infrastructure geography for global cloud and AI, where compute, data, and platforms are being built for scale, not merely served into the market,” he adds.
According to Siddhartha Tipnis, Partner and Technology Sector Leader at Deloitte India, India’s digital infrastructure growth is supported by multiple structural factors.
“India’s digital infrastructure is positioned for sustained growth, underpinned by three structural factors,” Tipnis says, citing policy enablement, mass digital adoption and rising hyperscaler and AI-driven investment demand.
“Accelerated investment in India is primarily driven by a unique combination of scale, policy certainty, and structural demand visibility,” he says.
Tipnis highlights the sustained convergence of enterprise AI adoption, hyperscaler expansion, data localisation and a supportive policy framework is expected to act as a structural multiplier for India’s economy.
“This is likely to result in greater technology services exports — spanning engineering, AI, data, and platform services — supported by the continued growth of Global Capability Centres (GCCs).”
India’s digital public infrastructure has played a central role in this shift. Platforms such as Aadhaar and UPI have enabled population-scale adoption of digital services, making India the world’s largest market for digital transactions by volume and reducing friction for enterprises deploying digital solutions.
Productivity and export impact
Beyond headline investment numbers, executives say the more lasting impact will come from productivity gains and export growth driven by AI and cloud adoption.
“The rise of AI and cloud adoption is transforming the traditional people-led development to AI-automated development, leading to productivity enhancement,” says Dr Mohammed Aslam Khan, CEO and Managing Director of Octaware Technologies.
Official data shows India’s digital economy is nearly five times more productive than the rest of the economy, measured by output per worker. While it employs about 2.5 per cent of the workforce, it contributes close to 12 per cent of national income.
Dr Khan says delivery models are also evolving. “Indian companies are shifting from offshore delivery centres (ODC) to global capability centres (GCC) offering complete business function support through AI-enabled automation services to their clients rather than just software or product innovation.”
He adds, “The client engagement model by IT services companies is changing from a fixed-bid costing model to an outcome-based pricing model.”
Emerging constraints
While India’s technology workforce remains a key strength, skill availability could become a constraint in the next phase of growth.
“India is very well positioned with the global AI adoption need. The domain-specific data and AI engineering skills are in demand,” Dr Khan says.
“The New Education Policy (NEP) 2020 has introduced artificial intelligence at the school education level. The universities in India have launched graduate programmes specialising in data science, machine learning, and artificial intelligence,” he says.
Despite this, shortages persist in advanced and domain-specific skills, particularly in healthcare, manufacturing and life sciences, even as overall tech employment continues to expand.
As investments shift from announcements to execution, constraints are increasingly linked to infrastructure rather than policy.
“The key constraints increasingly relate to execution rather than intent, with greater emphasis on hard rather than soft factors,” Wagle says, adding, “As cloud and AI infrastructure scales, energy capacity and reliability — especially access to clean and competitively priced power — are likely to play a more prominent role in shaping outcomes.”
Tipnis echoes these concerns, pointing to power availability, grid stability, land acquisition and specialised talent as potential bottlenecks.
In 2026, tech-led capital inflows are increasingly viewed as a structural pillar of India’s economic trajectory rather than a cyclical boost. “The tech-led capital inflows would transform India’s growth trajectory by boosting its digital economy through AI innovation and digital infrastructure,” Dr Khan says.
“The Indian IT services firms will be the key enablers by providing AI-automated solutions and domain-specific tech innovation such as healthtech, fintech, clean tech and Industry 5.0.”
If execution matches ambition, big tech’s investment in India could become a major driver of the country’s growth in the second half of the decade.
Sign up for the Daily Briefing
Get the latest news and updates straight to your inbox
Network Links
GN StoreDownload our app
© Al Nisr Publishing LLC 2026. All rights reserved.