BENGALURU: With an increase in adoption of Artificial Intelligence (AI) and Internet of Things (IoT) and the surge in demand for digital and cloud services, the country's data centre (DC) market has scaled up significantly, and will cross 4,500 MW by 2030 from the current capacity of 1,263 MW.
Also, in the next five to six years, amidst massive adoption of cloud computation and AI in the country, data centres are likely to attract investments to the tune of $20-25 billion.
The recent Colliers’ report 'The digital backbone: Data centre growth prospects in India' states that Mumbai and Chennai cumulatively hold close to two-thirds of the DC capacity.
Mumbai continued to account for the majority of the DC capacity with 41% share, followed by Chennai & Delhi NCR at 23% & 14%, respectively. This rapid expansion in capacity has resulted in an over three-fold increase in real estate footprint over the last 6-7 years, across the top seven DC markets of the country, taking it to 16 million sq ft as of April 2025, the report added.
On the supply front, India has witnessed 859 MW of capacity addition across the top seven primary DC markets since the beginning of 2020. In terms of geographical spread, 44% of the new supply since 2020 was concentrated in Mumbai. This was followed by Chennai and Delhi NCR which together accounted for 42% of the capacity addition from 2020.
In the next 5-6 years too, the majority of the primary DC markets are set to witness significant influx of new supply. These Tier I markets are likely to witness 3,000-3,700 MW of DC capacity additions during 2025-2030, a four-fold rise compared to the new supply during 2020-2025, the report further added.
It said though Mumbai will continue to dominate the overall DC market, relatively smaller growth markets such as Hyderabad, Bengaluru and Pune are likely to see multifold growth in inventory levels. Hyderabad is likely to see significant traction and emerge as a major hub, in addition to cities such as Mumbai, Chennai & Delhi NCR.
“With a DC capacity of about 1,263 MW across the top seven markets, India’s data centre industry has witnessed significant scaling up in the last few years. India is becoming a global DC hotspot, fueled by rapid digitalization, data localization norms and strong government support. As this growth trajectory continues, India’s DC capacity is likely to cross 4,500 MW in the next 5-6 years, translating into a real estate footprint of 55 million sq ft,” said Jatin Shah, Chief Operating Officer, Colliers India.
The rise in proportion of larger-sized DCs (>20 MW) -- from 42% during 2020 to 56% as of April 2025 -- indicates heightened traction in large hyperscale data centres, especially in recent years, the report added.
"In the coming years, the demand for high density rack configurations & advanced computing infrastructure will further rise. DC investments of about $20-25 billion are likely to materialise over the course of the next 5-6 years,” said Vimal Nadar, National Director & Head of Research, Colliers India.