By – Aditya Shrivastava
June 18, 2025 | New Delhi
In the wake of rising global demand for Artificial Intelligence (AI) infrastructure, India is rapidly establishing itself as a leading hub for data centers and semiconductor (chip) manufacturing, according to a new report released by Moody’s Analytics. The report, titled “AI Overcoming Barriers,” highlights India’s growing prominence alongside Singapore and Malaysia in the global AI investment landscape.
India’s Digital Strength and Cost Advantage Attracting Global Investors
Moody’s Analytics emphasizes that India’s robust digital ecosystem, skilled workforce, and cost-effective operational environment are key factors driving foreign direct investment (FDI) in the country’s tech infrastructure sector. With AI-driven innovations fueling the need for powerful computing capabilities and high-speed data processing, the demand for hyperscale data centers and chip fabrication units is surging globally.
India’s central and state governments have also rolled out multiple incentives and policy frameworks to promote semiconductor manufacturing and establish data center parks in key metros such as Hyderabad, Bengaluru, Mumbai, and Noida.
“Even as global trade and investment face a slowdown, spending on AI technologies and the infrastructure that supports them continues to rise,” the Moody’s report states.
Asia Emerging as AI Investment Hotspot
While the United States and China have been dominant players in AI technology and infrastructure, the report notes a significant shift toward Asia—particularly South and Southeast Asia—as the next big frontier for AI-related investments.
Singapore, known for its mature infrastructure and regulatory stability, and Malaysia, with its strategic location and tax incentives, are also witnessing growing interest from global tech giants and AI-focused enterprises. However, India stands out for its scalability, market size, and government-backed digital transformation initiatives such as Digital India and the India Semiconductor Mission.
AI Infrastructure: A Priority Despite Global Economic Uncertainty
Despite ongoing challenges in the global economic landscape, including geopolitical tensions and inflationary pressures, AI remains a top investment priority across sectors. Businesses and governments alike are investing heavily in the foundational technologies needed for AI adoption—including data centers, semiconductor fabs, and cloud computing systems.
The Moody’s report also predicts that by 2030, countries like India will play a pivotal role in the global AI value chain—not just as service providers, but as key players in hardware development and next-generation chip design.
Recent Developments in India’s Tech Ecosystem
- The Indian government has announced a $10 billion incentive scheme to attract chip manufacturers, including collaborations with major global players such as Micron Technology and Foxconn.
- States like Tamil Nadu and Gujarat are developing electronics manufacturing clusters with specialized infrastructure for data and chip production.
- Investments in 5G and undersea cable networks are enhancing India’s data connectivity, further bolstering its readiness to host data-intensive applications powered by AI.
Conclusion
As per Moody’s Analytics, India is not just catching up—it is positioning itself as a global leader in the next digital revolution. With a blend of policy support, talent pool, and infrastructure development, the country is fast becoming a magnet for global tech investments in AI, data centers, and semiconductor manufacturing.