India’s data centre industry has over $6.5 billion in investments committed through private equity, joint ventures, and acquisitions between 2014 and 2024, finds a new report India Data Centre Market: Growth, Trends & Outlook by ANARAOCK Capital. The industry has witnessed exponential growth between 2019 and 2024, recording a 139% increase in capacity - scaling from 590 MW in 2019 to 1.4 GW in 2024.

Devi Shankar, Executive Director - Industrial, Logistics & Data Centres, ANAROCK Capital, says, "This surge is underpinned by rising internet penetration, which has risen from 33.4% in 2019 to 55.2% in 2024), a near-doubling in data consumption per user from 11.5 GB to 21.1 GB/month, and an explosion in average traffic per smartphone, which grew from 13 GB to 32 GB. India now leads globally in average mobile data traffic per smartphone, and just this fact alone has had a palpable impact on the demand for high-grade data centres in the country. India's booming digital engagement is a direct indicator of future DC demand."

Market Concentration & City-Wise Distribution

Mumbai and Chennai dominate the DC market, accounting for 70% of India’s total IT power capacity, with Mumbai alone contributing nearly half at 49%. These cities also witnessed record-breaking supply growth from 2022 to 2024—92% in Mumbai and 340% in Chennai.

Other key markets include:

• Noida: 9%
• Bangalore: 8%
• Hyderabad: 4%
• Pune: 5%

Together, these regions have contributed to an overall occupancy level of 76%, underscoring strong market absorption and operational efficiency.

Investments & Land Acquisition Trends

India has emerged as a hotspot for hyperscalers adopting the 'own-and-operate' model. Over the past five years, around 440 acres of land have been acquired for the creation of hyperscalers across three major cities:

• Hyderabad: 69%

• Mumbai: 22%

• Pune: 9%

Financial & Deployment Trends

"The size of India’s DC industry is currently estimated at $10 billion, with $1.2 billion in revenue for FY 2024," says Shobhit Agarwal, MD & CEO – ANAROCK Capital. "Notably, 78% of the revenue is generated by four major DC operators. While EBITDA growth showed signs of plateauing post-2020, it is projected to rise by 50-55% as under-construction projects reach stabilization."

"Capital deployment has surged between 2022 and 2024, with $4.2 billion deployed on-ground till FY 2024," adds Agarwal. “The total capital deployed, including fixed assets and working capital,  amounted to USD 2.6 billion in equity and USD 2.4 billion in debt as of March 2024. This signals aggressive expansion sentiment and investor confidence."

Key Trends for 2025 and Beyond

AI-Driven Demand

Artificial Intelligence is set to drive the next wave of DC requirements. To accommodate AI workloads, future-ready DCs will require:

• Liquid cooling technologies
• Rack densities of more than 30–40 kW per rack
• Floor loads up to 2,500 kg/sq.m.

Rise of Edge DCs in Tier II Cities

“To bring computing closer to users, edge data centres - small-scale, decentralized data storage and processing facilities located nearer to end-users and devices in tier 2 and tier 3 markets - are emerging,” says Ankita Sahu, Sr. Manager – Industrial, Logistics & Data Centres, ANAROCK Capital. “These include, among others, cities like Jaipur, Ahmedabad, Kochi, Vizag, Lucknow, Patna, and Bhubaneshwar. Edge data centres will play a vital role in supporting latency-sensitive applications and Gen AI-based services. Essential for real-time apps and generative artificial intelligence services, these facilities handle data locally, thereby lowering latency. They scale resource-intensive AI projects, improve dependability, maximise bandwidth, and enable context-aware processing.”

Sustainability - Green DCs

With environmental concerns gaining traction, there is a growing emphasis on energy-efficient design, renewable energy sourcing, and sustainable cooling methods. Green DCs are set to be a cornerstone of industry development going forward.

With exponential growth in data consumption, aggressive capital infusion, hyperscaler activity, and a strong push toward AI and sustainability, India is set to take a pole position in terms of global data infrastructure.