India Emerging as Hotspot for Data Centers and Chips, Moody’s Analytics Says
India is particularly attractive for low- to mid-tier chip manufacturing and R&D centers, Moody’s noted, as companies seek to diversify production away from traditional hubs and build resilience into their supply chains.
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India is fast becoming a key destination for global investment in data centers and semiconductor manufacturing, according to ‘AI Is Beating the Odds’—a new commentary released by Moody’s Analytics that tracks the AI-driven transformation of global capital flows.
While cross-border investment has slowed overall due to trade tensions and supply chain disruptions, capital is still pouring into AI-linked sectors—particularly data infrastructure and chip fabrication. And India, along with Singapore and Malaysia, is among the top beneficiaries.
“India’s growing economy and digital talent pool make it an attractive location for data centre providers and chip production,” the report said, adding that policy support and cost advantages are giving the country an edge in the AI supply chain.
The analysis, which used large language models to mine and classify cross-border investment data, found that investment in semiconductors and data centers has surged since the release of ChatGPT in 2022, even as total cross-border flows stagnate.
While the US remains the dominant source and destination, outbound investment is increasingly targeting Asia, with India ranking among the top 10 global destinations for inbound AI-related capital from 2022 to 2025.
India is particularly attractive for low- to mid-tier chip manufacturing and R&D centres, Moody’s noted, as companies seek to diversify production away from traditional hubs and build resilience into their supply chains.
While advanced fabrication is still concentrated in Taiwan and South Korea, India is carving out a role in the broader semiconductor ecosystem.
The investment boom has been most visible in data centers, as AI training and deployment demands shift infrastructure needs closer to both cheap power sources and large user bases.
With rising demand for AI-driven services, India’s combination of technical talent, power availability, and market scale has made it a strategic node in global tech expansion, the report said.
Moody’s cautioned, however, that rising geopolitical friction and policy unpredictability—especially in the US—could derail long-term commitments.
