Microsoft formally launched its fourth India cloud region in Hyderabad on Thursday, designating the new facility as a strategic hub for Asia and the Global South. According to reports from Business Standard, the India South Central region became generally available on August 6 and joins the company's existing regions in Pune, Chennai and Mumbai. The expansion represents Microsoft's continued commitment to strengthening its cloud infrastructure across India's key metropolitan areas, with the company stating that infrastructure alone does not make a country AI-ready and emphasizing its broader AI skills development initiatives. The move gives Microsoft four cloud regions in India and strengthens its position as the country's largest hyperscale cloud provider by footprint. As per Microsoft India and South Asia President Puneet Chandok at the Microsoft AI Infrastructure Summit India, the launch addresses the critical need for more resilient, trusted infrastructure to support the growing use of AI applications across businesses and government agencies. This launch coincides with over $100 billion in private capital for data center development and $1.3 billion for the IndiaAI Mission.
Electronics and IT Secretary S Krishnan provided strategic guidance for Microsoft's future data center expansion during the Hyderabad launch. As reported by Business Standard, Krishnan emphasized that it was easier and more economical to build data centres near power sources than near coastal cable landing hubs such as Chennai. He stated that "It will be much more economical if you go closer to where the power itself is generating," adding that the government would continue to facilitate faster approvals to meet the requirements of both the country and the world. Krishnan called the launch significant for strengthening India's data centre and AI infrastructure, and said the country needs to simultaneously access the best global technology and build domestic, sovereign computing capacity. Krishnan highlighted that India's scale of 1.4 billion people, along with its growing digital public infrastructure, generates large volumes of data that form a "treasure house" for AI applications, giving the country the potential to become "the application powerhouse of the world." He noted that India's tax policies, ease of doing business, and the new telecom law permitting easier interconnection of facilities had made it simpler to build and connect a data centre to the grid in India than in many other countries.
The Hyderabad facility features effectively zero water for cooling, relying on high-efficiency mechanical cooling systems that deliver zero water use for cooling, as reported by Upstox. Microsoft India and South Asia President Puneet Chandok highlighted that the region has been designed to support mission-critical and AI workloads at scale, with three availability zones and resilience aligned to India's regulatory and seismic requirements. The company confirmed that Microsoft Foundry and additional Azure AI capabilities are planned to be rolled out in the coming months, with the facility currently offering a broad portfolio of Azure services. The Hyderabad region is built for AI workloads from day one, adding to Microsoft's existing cloud regions in Pune, Chennai and Mumbai. On sustainability, Chandok announced that Microsoft planned to create 5 million litres of groundwater recharge capacity, supporting the company's commitment to becoming carbon negative, water positive and zero waste by 2030. In an interview with Business Standard, Chandok emphasized that upcoming data centres in India will have to set the benchmark for the world by building green data centre infrastructure with net-zero water consumption, stating that "All players in the ecosystem will, in fact, have to find ways to replenish and add much more water back to the ecosystem than they consume every year."
Leading Indian enterprises and critical infrastructure organisations have already signed up for the new region, including Adani Group, Bajaj Finserv, HDFC Bank and Paytm, according to Upstox. The company stated that the new region provides local capacity, data residency options, availability zones and governance capabilities for organisations deploying eligible cloud and AI workloads. Microsoft's cloud regions across India are now AI-enabled with AI-capable hardware, high-efficiency cooling systems and platform infrastructure needed to run advanced AI workloads, supporting the country's ambition of becoming an AI-first nation. According to Chandok, Indian organisations were moving from pilots to production, with 40% of enterprises in the country scaling their use of AI. The latest launch is part of the company's previously announced $20.5-billion India investment commitment, with customers particularly driving demand in regulated sectors such as financial services and digital commerce. Speaking at the event, Shri Jitin Prasada, Hon'ble Minister of State for Commerce and Industry, and Electronics & Information Technology, said, "India's ambition is to be an AI-first nation. The launch of Microsoft's India South Central datacenter region strengthens the digital infrastructure needed to support that ambition."
Microsoft's India South Central data centre region is now live in Telangana, marking a significant expansion of the state's hyperscale and AI infrastructure ecosystem. As reported by Business Standard, Telangana's hyperscale and AI infrastructure ecosystem crosses a new scale, with more than 2.5 GW of data-centre capacity either operational or under development across major global and Indian operators. Telangana is targeting 5 GW of data-centre capacity by 2029, with around $30 billion in potential investment across the broader AI and digital infrastructure ecosystem. Global players including Microsoft, AWS, Iron Mountain, CtrlS, Sify, TCL, NTT DATA and CapitaLand are investing in large-scale compute and data-centre infrastructure. D. Sridhar Babu, Minister for Information Technology, Electronics and Communications, Government of Telangana, stated that "We are building on this foundation with an ambition for Telangana to reach 5 GW of data-centre capacity by 2029 and attract around $30 billion in investment. Microsoft's investment is an important part of this journey and will further strengthen Hyderabad's ability to power the next generation of AI, cloud and digital innovation for India and the world." The investment is aligned with Telangana's Hyderabad Global AI Strategy, which brings together AI City, the Global AI Innovation Hub, AIKAM and TGDeX to support the development and adoption of AI at scale.
India generates 20% of the world's data but accounts for only 3% of global data centre capacity, as highlighted by Microsoft India and South Asia President Puneet Chandok. India would emerge as an AI infrastructure hub not just for itself but for Asia and the Global South, positioning the country as a critical component of Microsoft's regional strategy. Chandok expects India's capacity to increase from around 2GW to between 12-14GW by 2035, with the India South Central region expanding Microsoft's Sovereign Public Cloud foundation in India and giving organizations more options for deploying eligible cloud and AI workloads closer to their data, users, and operations. The region provides local capacity, data residency options, Availability Zones, and governance capabilities designed to help customers address applicable regulatory, security, operational, and sovereignty requirements. Microsoft's India cloud regions provide capabilities aligned with MeitY guidelines and designed to help customers address applicable requirements under India's Digital Personal Data Protection (DPDP) framework and sector-specific expectations from authorities, including the RBI and CERT-In. The growth in India's data centre story is evident in double-digit growth in Azure and Copilot over the last two years, with significant growth in Copilot usage across financial services, transportation, travel, and manufacturing sectors, as reported by Business Standard.
The expansion comes at a time of rapid digital growth in India, with India's public cloud services spending forecast to reach USD 45.7 billion by 2030, growing at an annual rate of 22.2 per cent, according to data from research firm IDC. AI spending is expected to grow at double that pace, creating substantial opportunities for Microsoft's cloud infrastructure. This growth trajectory supports Microsoft's strategic positioning in the Indian market and reinforces India's emergence as a key hub for both domestic and regional AI and cloud computing requirements. The launch is also being positioned as a catalyst for jobs, skills, and local enterprise growth, with Microsoft highlighting the region as a foundation for wider economic activity around construction, power, cooling, connectivity, and AI-related employment. Chandok noted a 15-fold increase in agent usage in Microsoft 365 and revealed that 92% of knowledge workers in India are using AI, compared to 75% globally. Beyond AI-ready datacenters, Microsoft is also investing in the critical digital infrastructure that enables AI at scale, including its consortium partnership in the planned India-Southeast Asia (I-2SEA) submarine cable system targeting 2029 readiness. The Boston Consulting Group (BCG) study estimates that India's data centre buildout could generate $140-200 billion in economic output for India through 2030, with "Every rupee spent on a data centre leads to 3.5x rupees of impact," as Chandok quoted from the BCG report.
