Microsoft Opens Fourth India Cloud Region as AI Infrastructure Demand Grows

Microsoft has officially launched its India South Central cloud region in Hyderabad, expanding its hyperscale cloud footprint in the country. The new datacentre region is designed to support AI workloads, digital transformation and data sovereignty requirements for enterprises and government organisations.

With the launch, Microsoft now operates four cloud regions in India—Pune, Chennai, Mumbai and Hyderabad.

The Hyderabad region comprises three Availability Zones and is built to support mission-critical workloads with enterprise-grade security, compliance and governance.

The company said the region is already seeing strong early demand from enterprises including Adani Group, Bajaj Finance, HDFC Bank and PB Pay, which are using it to improve resilience, expand cloud capacity and accelerate AI initiatives.

“Microsoft India’s South Central Azure region strengthens our digital transformation efforts by enhancing data residency, resilience, and scalability while accelerating cloud and AI adoption. We value our partnership with Microsoft to deliver secure AI-driven financial services and look forward to leveraging the Hyderabad region," said Mudit Mehrish, Bajaj Finance Ltd Chief Information Officer.

Microsoft also noted that Azure has recorded strong double-digit growth in India over the past two years, while enterprise adoption of Microsoft 365 Copilot continues to increase.

"The Microsoft India South Central datacentre region is a critical part of that foundation, backed by Microsoft’s $20.5 billion investment commitment to India’s cloud and AI future. Making India AI-first is about bringing together the scale to support growth, the skills to unlock value, the sovereignty organisations expect, and the security they depend on. We are not investing in infrastructure to keep up with demand. We are investing in India’s ability to set the pace for the world,” said Puneet Chandok, Microsoft India and South Asia President.

The Hyderabad region builds on its previously announced investments of $3 billion in January 2025 and $17.5 billion in December 2025. Globally, the company operates more than 80 cloud regions, over 500 datacentres and one of the world's largest cloud networks.

Industry analysts believe the expansion comes at a crucial time as organizations move AI projects from pilots to production.

“A three-availability-zone region in Hyderabad, built with sovereign-ready controls and next-generation zero-water cooling, addresses the twin pressures on Indian enterprises and regulated industries: scaling AI workloads while meeting rising expectations on data governance and environmental responsibility,” said Dr William Lee, IDC Senior Research Director.

The company said the Hyderabad facility is designed with zero-water cooling technology and supports Microsoft's broader sustainability goals of becoming carbon negative, water positive and zero waste by 2030.