India’s digital transformation is often described as a national phenomenon. Millions of people are gaining access to digital services, businesses are moving online and government services are becoming increasingly digital. But beneath this national story is another development that deserves greater attention: digital infrastructure is becoming geographically concentrated.

Data centres, submarine cable connections, cloud infrastructure, major internet exchanges and high-capacity fibre networks naturally cluster around locations with reliable electricity, strong connectivity, skilled workers and large concentrations of businesses. Mumbai, Chennai, Bengaluru, Hyderabad, Delhi NCR and other major economic centres therefore have structural advantages when attracting digital infrastructure investment.

This concentration can create a powerful economic feedback loop. Digital infrastructure attracts technology companies and data-intensive businesses, which create additional demand for computing and connectivity. That demand encourages further infrastructure investment, which makes the same location even more attractive to new businesses.

The result can be a digital version of agglomeration economics.

But the opposite can happen elsewhere. Regions with weaker connectivity, unreliable electricity, limited data-centre capacity or inadequate digital infrastructure may struggle to attract businesses that increasingly depend on cloud computing, high-speed networks and real-time data.

This creates an important distinction between having internet access and having advanced digital infrastructure.

A household may have a fast mobile connection while the region still lacks the infrastructure required to support large technology companies, advanced manufacturing, financial services or high-performance computing. Connectivity for consumers does not automatically translate into digital capacity for the economy.

The issue becomes especially important as artificial intelligence expands. AI applications require substantial computing power and data infrastructure. Companies developing or deploying advanced systems may increasingly consider proximity to reliable computing infrastructure when deciding where to establish operations.

This could influence India’s future industrial geography.

Cities with abundant power, fibre connectivity, data centres and digital talent could become increasingly attractive locations for high-value industries. Regions without these assets may find themselves competing from a structural disadvantage.

India therefore faces a new infrastructure question.

The objective cannot simply be to connect every place to the internet.

It may also need to ensure that computing, storage, connectivity and reliable power are distributed sufficiently across the country to prevent digital infrastructure from becoming concentrated in only a handful of economic centres.

The geography of India’s digital economy may ultimately determine the geography of its next generation of economic growth.