Cloud Infrastructure Market in India 2023 – 2028

Cloud Infrastructure Market in India 2023 – 2028

Cloud infrastructure encompasses the fundamental elements required for cloud computing, which entails providing customers with internet-based computing services such as servers, storage, software, databases, networking, and analytics. Various sectors, including IT, e-commerce, telecommunications, media, manufacturing, transportation, logistics, and retail, have embraced cloud infrastructure to optimize their daily functions. The market can be classified into three main types: Infrastructure-as-a-Service (IaaS), Software-as-a-Service (SaaS), and Platform-as-a-Service (PaaS).

Market insights:

The adoption of Cloud infrastructure in India is predominantly witnessed in sectors including IT, e-commerce, communication and media, telecommunications, manufacturing, government, transportation, logistics, and retail (excluding e-commerce). In 2022, the Indian cloud infrastructure market reached a valuation of INR 356.19 billion, and it is anticipated to attain INR 1,621.10 billion by 2028, with a projected compound annual growth rate (CAGR) of 27.49% during the period from 2023 to 2028. As major Tier 1 cities like Delhi, Bangalore, Mumbai, Chennai, and Hyderabad approach infrastructural saturation, cloud infrastructure providers are also directing investments towards IT/ITeS infrastructure in Tier 2 and Tier 3 cities.

Market drivers:

The integration of digital technologies has become imperative for Indian businesses across diverse sectors aiming to maintain their global competitiveness. Cloud infrastructure plays a pivotal role in enabling this digital transformation by providing scalable, flexible computing resources, data storage, and essential services. Legacy IT systems that had been hindering agility and innovation are now swiftly modernized through cloud platforms, facilitating the adoption of emerging technologies such as artificial intelligence (AI), machine learning (ML), and the Internet of Things (IoT).

Market challenges:

Meeting strict data protection needs often entailed significant investments in data security tech, processes, and training. Regulations like the draft PDPB required critical data storage in India, posing hurdles for global firms in India dealing with data localization and maintaining worldwide operations. Varied internet connectivity in India—strong in cities but weak in rural areas—could result in slow access to cloud resources, hampering application performance and user experience.