India's data centre market is poised for rapid growth, with capacity projected to rise from 1,255 MW to 2,070 MW by 2025, driven by digital transformation, AI data demands, and supportive policies like the Digital Personal Data Protection Act and the 2020 Draft Data Centre Policy. The sector's footprint is set to expand from 19 to 31 million sq. ft., supported by over USD 60 billion in investments since 2019, expected to surpass USD 100 billion by 2027. Major hubs include Mumbai, Chennai, Delhi-NCR, and Bengaluru, accounting for 90% of capacity, with emerging Tier-II cities gaining traction.
India's data centre market is undergoing a transformative phase, with its capacity expected to soar to 2,070 MW by the end of 2025, as per a report by CBRE South Asia Pvt. Ltd. The current capacity of 1,255 MW is anticipated to reach 1,600 MW by 2024, reflecting the sector's rapid growth trajectory.
The report highlights key drivers propelling this expansion. The digital transformation sweeping across India, coupled with widespread internet penetration and the rise of AI-generated data workloads, forms the foundation of this growth. Significant policy measures, including the infrastructure status granted to data centres and the 2020 Draft Data Centre Policy, have created a supportive environment for developers and operators.
Moreover, the Digital Personal Data Protection Act (DPDPA) of 2023 has been instrumental in fostering legitimate data processing and facilitating cross-border trade. This legislation has bolstered stakeholder trust, solidifying India's position as a digital innovation hub.
Mumbai remains the epicentre of data centre activity, followed by Chennai, Delhi-NCR, and Bengaluru, collectively accounting for 90% of the country's stock. The total data centre footprint, currently at 19 million sq. ft., is projected to expand to 31 million sq. ft. by 2025. Emerging Tier-II cities like Ahmedabad, Kochi, and Visakhapatnam are also gaining traction due to cost-efficiency and growing regional demand.
State-level policies have played a pivotal role in driving this growth. Early initiatives by Maharashtra, Telangana, and Tamil Nadu offered substantial incentives and deemed data centres as 'essential services.' Other states have since followed, emphasizing the sector's importance.
Investments in the sector have been substantial, with over USD 60 billion committed between 2019 and 2024. By 2027, this figure is expected to exceed USD 100 billion. Sustainability is a growing priority, with renewable energy integration and advanced cooling technologies becoming standard practices to enhance energy efficiency and reduce carbon footprints.
The increasing demands of AI workloads are shaping infrastructure upgrades, ensuring data centres can handle next-generation digital needs. As the report suggests, BFSI and technology sectors will drive demand in the coming years, with nearly 475 MW of capacity currently under construction in major hubs like Mumbai, Chennai, and Delhi-NCR.
India's data centre landscape stands at the forefront of its digital evolution. With strategic policies, significant investments, and a focus on sustainability, the country is set to become a global data powerhouse, underpinning its digital economy and future innovations.
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