India’s data centre market is poised for exponential growth, with its size projected to more than double from $10 billion in 2025 to $22 billion by 2030, according to a report by Vestian. The surge reflects rising digital adoption, strong investor interest, and increasing demand for data-driven technologies.

Global demand surge driven by AI, cloud and data consumption

The global data centre industry is witnessing rapid expansion, with installed capacity currently estimated at 40–50 GW, expected to exceed 100 GW by 2030. This growth is being fuelled by advancements in artificial intelligence, cloud computing, and data-intensive applications.

India is emerging as a strategic hub in the Asia-Pacific region, driven by its fast-growing digital economy, rising internet penetration, and expanding hyperscaler investments.

Key growth drivers powering India’s data centre boom

This rapid growth can be attributed to rising internet and telecommunications subscribers, increasing enterprise cloud adoption, expanding AI and high-performance computing workloads, and shifting consumer preferences towards digital payments and OTT platforms. The rollout of 5G infrastructure has pushed average monthly wireless data consumption beyond 25 GB per user, reflecting a sharp rise in data usage and reinforcing the need for scalable data centre infrastructure.

A Snapshot of India’s Data Centre Market

Shrinivas Rao, FRICS, CEO, Vestian said, "India's data centre sector is rapidly transforming on the back of strong policy  support and  rising digital demand. Despite a limited share of global capacity, India has a huge upside potential to lead in Al infrastructure. With single-window clearances, 20-year tax exemptions, GST benefits, and incentives extending to 2047, India is strategically positioned to emerge as a global data centre and Al hub."

Robust Investment Pipeline Signals Strong Growth Ahead

India’s data centre industry has attracted significant investments from global and domestic investors. Between 2020 and 2024, the sector attracted approximately USD 13–15 Bn in investments, with foreign institutional investors accounting for nearly 80% of the total capital inflows. The investment pipeline remains strong, with announced projects totalling USD 60–70 Bn over the next five years, largely driven by hyperscale platforms and joint venture developments.

India also offers a competitive cost advantage, with data centre construction costs of USD 6–7 Mn/MW, significantly lower than those in mature APAC markets such as Singapore and Japan, thereby enhancing its attractiveness for large-scale investments.

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City-wise Analysis: Mumbai and Chennai Lead

Data centre infrastructure in India remains concentrated in a few key metropolitan markets. Mumbai remains the country’s largest data centre hub, driven by strong global connectivity and infrastructure advantages. At the same time, Chennai serves as a key global data gateway, with multiple submarine cable landings that enable high-capacity, low-latency connectivity. Meanwhile, Hyderabad, Bengaluru, and Pune are emerging as important secondary hubs owing to robust IT ecosystems, ample land availability, and competitive operating costs.

City-wise Share of Operational Capacity

While Mumbai and Chennai remain the primary hubs, data centre operators are increasingly exploring Tier-II cities to support distributed digital infrastructure. Cities such as Ahmedabad, Kochi, Jaipur, and Visakhapatnam are gaining traction due to competitive land availability, improving digital infrastructure, supportive state government policies, and growing enterprise demand. Operational capacity in Tier-II markets is currently estimated at 60–80 MW and is expected to exceed 100 MW by the end of 2026.

India’s data centre market is expected to witness sustained expansion over the next decade as digital transformation accelerates across industries. Installed capacity is projected to reach 1.7–2.0 GW by the end of 2026, backed by nearly USD 30 Bn in investments. This number is further expected to go up to 4–5 GW by 2030. Rising AI adoption, increasing demand for cloud infrastructure, and the rapid growth of digital platforms are expected to drive the next wave of growth in India’s data centre market.