Minister for Information Technology and Digital Services Palanivel Thiaga Rajan releases Knowledge Paper at 7th ASSOCHAM Smart Datacenters & Cloud Infrastructure Conclave 2025
| Photo Credit:
Bijoy Ghosh
Chennai’s data centre market is projected to more than double to 551 MW by 2030 from 202 MW in 2025, at a CAGR of 22 per cent, a new report by ASSOCHAM in association with PwC released on Monday shows.
Titled ‘Knowledge Paper on Empowering global digital change: Tamil Nadu’s data centre and cloud vision’, the report notes that growth is driven by the city’s strategic location, robust infrastructure and supportive government policies.
Tamil Nadu IT minister Palanivel Thiaga Rajan released the report at the 7th Assocham Smart Data Centres & Cloud Infrastructure Conclave 2025.
The Tamil Nadu Data Centre Policy 2021 provides incentives such as tax benefits, land subsidies and power tariff concessions, further boosting the market, the report said. These help to attract investors and position the state as a major data centre hub.
While Chennai has coastal proximity, Coimbatore’s strong industrial base and educational institutions, also offer appealing infrastructure and connectivity. Madurai leverages its growing IT sector, strategic location and skilled workforce. These cities benefit collectively from supportive government policies that foster their development and attractiveness for investments, the report said.
The report also credited the surge in GPU-based computing and AI growth for the development of data centres. There is an increasing shift towards ARM-based processors, which are more energy-efficient and cost-effective compared to traditional x86 chips, the report stated.
To strengthen the policy framework and support the growth of data centres in the state, the report recommended offering additional perks to data centres that adopt energy-efficient technologies and achieve high sustainability standards, including increased subsidies for renewable energy and tax incentives for green certifications.
It also urged the State government to launch targeted training programmes in collaboration with educational institutions and industry players to develop a skilled workforce for the data centre sector, including specialised courses and certification programmes. Investing in enhancing power and internet connectivity infrastructure across the state, such as expanding undersea cable networks and strengthening the power grid, will be required to ensure reliable, high-speed access, the report said.
Speaking at the event, minister Rajan said, “If we can get enough of the growth here, we will provide the platform for our own industry as the world moves towards more and more Artificial Intelligence, and I think Tamil Nadu will be well positioned as the innovation hub. We have a lot of data, data centres and many talented people, and these are the building blocks for innovation and AI,” he said.
Published on May 5, 2025