Source: Tony Webster from Minneapolis, Minnesota, United States [CC BY]

In a move that will heat up the recently competitive cloud computing and data centers space in India, Amazon has unveiled an ambitious plan to invest a staggering $12.7 billion to significantly scale its AWS cloud infrastructure in the country by 2030.

The cloud arm of the e-commerce group announced its commitment to invest the amount (which comes to ₹1,05,600 crores) by 2030 to meet the growing demand for cloud services in the country. It is claimed that the fresh investment by AWS will contribute ₹1,94,700 crores ($23.3 billion) to India’s GDP by the same year.

The announcement is interesting, considering how Amazon’s earlier commitment last year mentioned a $4.4Bn investment. India is the world’s second largest internet market, and has seen a surge in cloud adoption, largely by an ever growing number of internet startups in the country. AWS competitors Google Cloud and Microsoft also maintain two and three cloud data centers respectively.

Amazon said that this new investment will reportedly create an estimated average of 1,31,700 full-time equivalent (FTE) jobs in Indian businesses annually. These positions would include construction, facility maintenance, engineering, telecommunications, and others.

Today, AWS has two data center infrastructure regions in India – the seven-year-old AWS Asia Pacific (Mumbai) Region, and the AWS Asia Pacific (Hyderabad) Region, which was launched in November 2022.

“Since 2016, AWS has invested billions of dollars into cloud infrastructure in India to support the tremendous growth we have witnessed in the use of cloud for digital transformation,” Puneet Chandok, president of commercial business, AWS India and South Asia, commented on the matter. AWS CEO Adam Selipsky hailed India as a “high growth market,” adding that he expects it to embrace cloud technology to reach its goal for a $5 trillion economy.

“AWS is committed to driving positive social and economic impact in India. In addition to building cloud infrastructure and helping local customers and partners digitally transform, we have trained more than four million people in India with cloud skills since 2017, and invested in six utility-scale renewable energy projects to meet our global 100% renewable energy goal by 2025. Our planned investment of ₹1,05,600 crores (US $12.7 billion) by 2030 will help create more beneficial ripple effects, supporting India on its path to becoming a global digital powerhouse,” he added.

This fresh investment comes amid Amazon already investing nearly $6.5Bn in the country, which is one of its key markets. Ever since it entered India, the e-commerce behemoth has poured in billions over the years to strengthen its foothold and deepen its presence in the market. However, most of its consumer business investments haven’t really borne the fruits it expected, resulting in a considerable scale back of consumer-focused businesses in recent times.

However, the Indian public cloud infrastructure space, which is expected to reach $13 billion by 2026 according to IDC, is an area where Amazon sees considerable scope for growth and market dominance. Additionally, the Indian government has been increasingly pushing for digitisation of most government platforms and public service portals, thus further increasing the need for cloud services, that are closer to home. Amazon will face competition from homegrown players, most notable from Indian billionaire Gautam Adani. Adani has been making considerable investments in setting up a network of data centers across the country.

“PM Narendra Modi ji’s Digital India vision is driving expansion of cloud & data centers in India,” said Rajeev Chandrashekhar, minister of state for electronics and information technology, skill development and entrepreneurship in India, in a statement. “India Cloud and the underlying data center infrastructure are important elements of India’s digital infrastructure and ecosystem. I welcome the Amazon Web Services (AWS) investment of $12.7 billion to expand their data centers in India. It will certainly catalyze India’s digital economy. MeitY is also working on a Cloud & Data Center Policy to catalyze innovation, sustainability, and growth of India Cloud.”