Microsoft just opened its fourth Azure region in India, and the banks lining up to use it say a lot about why it exists. The new Hyderabad facility joins existing regions in Pune, Chennai, and Mumbai, giving Microsoft four in-country locations plus two data centers it runs through a partnership with Reliance Jio.
Built across three Availability Zones, the region was designed specifically around India’s seismic and regulatory requirements, meaning workloads can spread across physically separate facilities with independent power and cooling instead of relying on a single site. That matters more than it sounds for financial institutions in particular, given how much of India’s banking regulation now touches disaster recovery and data residency.
HDFC Bank plans to pair Hyderabad with Microsoft’s existing Central India region specifically for disaster recovery and business continuity. Atish Bhanushali, the bank’s head of cloud infrastructure, called it a natural complement to the bank’s existing footprint, one that also opens up capacity for AI initiatives and heavier compute workloads. Bajaj Finance and PB Pay cited similar reasoning, pointing to data residency and scalability requirements shaping their decisions.
None of this unfolds in a regulatory vacuum. The Reserve Bank of India requires payment-system providers to keep payment data inside the country, and separate IT governance rules for regulated entities address disaster recovery and business continuity more broadly. That falls short of a blanket mandate forcing every company’s data to stay in India, but it carries enough specificity to shape where regulated financial workloads actually land.
Microsoft is framing Hyderabad as part of a much larger bet on India, tied to a combined $20.5 billion investment commitment the company announced across two rounds in 2025. Azure revenue in India has posted double-digit growth for two straight years, and Microsoft says more than 90% of NIFTY 100 companies now use Microsoft 365 Copilot.
Microsoft isn’t alone here, either. AWS already runs a three-zone Hyderabad region of its own, and Google Cloud offers India-specific data controls through its Assured Workloads service. IDC projects India’s public cloud market will hit $45.7 billion by 2030, and according to IDC’s William Lee, AI spending specifically is growing at roughly twice that overall pace.
