Why India Wants to Become the World’s Digital Vault

India has a rare chance to leapfrog traditional digital hubs and position itself as a global nerve centre for digital infrastructure, according to a new PwC report. The pathway is unconventional but strategic: data embassies and data cities.

PwC argues that India can attract foreign governments and international organisations by offering “data embassy” arrangements—secure, sovereign data-hosting zones protected by diplomatic-style immunity. These would operate within tax-neutral frameworks, backed by strong cybersecurity guarantees, allowing nations to store critical digital assets on Indian soil without compromising sovereignty.

Alongside this, the report proposes the creation of purpose-built data cities—integrated hubs where data centres, cloud providers, AI labs and digital services coexist under a unified tax and policy regime. With plug-and-play infrastructure, regulatory sandboxes and targeted incentives, such cities could dramatically reduce setup friction for global and domestic firms alike.

The prize is significant. PwC estimates that data embassies and data cities together could unlock a powerful ecosystem—drawing global capital, accelerating innovation, creating high-value jobs and embedding India deeper into the global digital value chain.

The timing is favourable. India’s digital economy already contributed nearly 11.7% of GDP in FY23 and is growing at almost double the pace of the broader economy. By FY30, it could account for nearly 20% of national income, overtaking agriculture and manufacturing.

Demand for data centres reflects this momentum. Installed capacity, currently at 1.5 GW, is expected to rise nearly tenfold to about 14 GW by 2035, driven by a 20–24% CAGR and strong investment interest from Indian and global players.

India also enjoys structural advantages: lower construction costs than regional peers such as Singapore and South Korea, and strong potential for clean energy generation—an increasingly decisive factor for hyperscale data centres.

PwC cautions, however, that ambition must be matched with execution. A predictable, investment-friendly tax regime, clarity across the project lifecycle, and forward-looking policy coordination will be critical if India is to convert this opportunity into lasting global leadership.