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India's data centre (DC) industry is set for rapid expansion, with a projected addition of 604 MW capacity between the second half of 2024 and 2026, as per JLL India. The industry, which has grown 2.5 times since 2019 at a CAGR of 24%, is being fuelled by advancements in artificial intelligence (AI), the nationwide rollout of 5G, and government investments of 1.24 billion USD in AI infrastructure. The expansion will require 7.3 million square feet of real estate and 3.8 billion USD in capital. Mumbai will maintain its leadership, while Chennai and other regions see notable growth. This increase underscores India's emergence as a global tech hub, generating employment, fostering innovation, and strengthening the digital economy.
India's data centre (DC) sector is experiencing unprecedented growth, driven by advancements in artificial intelligence (AI) and the nationwide expansion of 5G technology. According to a report by JLL India, the industry is expected to add 604 MW of capacity between the second half of 2024 and 2026. This growth highlights India's emergence as a key global player in AI innovation and data infrastructure. Advertisement
India's data centre industry has been on a steep growth trajectory in recent years. By mid-2024, the industry reached a total capacity of 917 MW, with a high occupancy rate of 873 MW, underscoring strong demand. Since 2019, the sector has grown 2.5 times, achieving a compound annual growth rate (CAGR) of 24%. This rapid expansion is being bolstered by key government initiatives, including an investment of 1.24 billion USD in AI infrastructure, and the rollout of 5G, which reached over 90% of the population by the end of 2023.
The industry is now preparing for the next wave of expansion. Between 2024 and 2026, the data centre sector is projected to require 7.3 million square feet of real estate and 3.8 billion USD in capital investment. Mumbai is set to retain its position as the leading market, with significant growth also anticipated in Chennai and other regions.
Dr. Samantak Das, Chief Economist and Head of Research at JLL India, emphasised the ripple effects of this growth, stating that it will not only demand specialised skills but also generate opportunities in industries linked to data centre operations.
Despite its rapid growth, the industry is operating under tight conditions, as reflected by the near-full occupancy rate in mid-2024. The addition of 604 MW in capacity aims to ease this pressure and meet the rising demand driven by technological advancements and digital transformation.
The expansion of the data centre industry is creating a wide range of opportunities. It is generating employment in specialised fields, spurring innovation across various sectors, and boosting industries that supply critical infrastructure. The development is further enhancing India's digital capabilities and cementing its position as a global technology hub.
As India continues to invest in AI and expand 5G coverage, the data centre industry is set to play a critical role in supporting the country's digital ambitions. With an increasing focus on advanced technologies and infrastructure, India is positioning itself as a leader in the global tech landscape.
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