US technology giants are holding off on leasing large-scale data centres in India as trade tensions between New Delhi and Washington continue to escalate, according to a CNBC report. Amazon, Microsoft, and Google currently make up about 30 percent of India’s data centre demand, a share expected to rise to 35 percent, says property consultancy Anarock Capital. Alok Bajpai, managing director of NTT Global Data Centers in India, noted that while orders for hyperscalers—massive, highly scalable data centres designed for heavy workloads with optimized network infrastructure and minimal latency—remain in the pipeline, companies are pausing before signing agreements.

New data centre deals have been stalled for more than two months, with industry experts expecting hyperscalers to reassess their plans over the next three to six months. The trade environment has been strained after the US imposed tariffs on Indian goods, initially at 25 percent in August and later doubling to 50 percent, citing India’s purchase of Russian oil. This was followed by a new $100,000 one-time visa fee for fresh H-1B applications, effective September 21, which is expected to impact Indian workers heavily. According to Jitendra Soni, a partner at Argus Partners, these tariffs have disrupted global supply chains and made equipment and input costs more uncertain.

Despite these challenges, India’s data centre sector is projected to attract investments of ₹1.6–2.0 trillion over the next five to seven years, with plans to add 7.1 gigawatts of new capacity. However, nearly 60 percent of this capacity is still in early stages, with only 1.3 GW under construction and another 1.6 GW in planning. Industry estimates suggest that India’s total data centre capacity could nearly triple, from 1.2 GW to more than 3.5 GW by 2030, driven by rising demand from e-commerce, cloud infrastructure, and AI workloads, alongside relatively low operating costs. The uncertainty caused by trade tensions is now being reflected in negotiations for new projects, with clauses covering phased capacity and legal changes becoming increasingly common.