India’s fast-growing data centre industry is beginning to shift beyond Mumbai into cities such as Hyderabad, Pune, Chennai and even Vizag, as rising AI workloads, land shortages and power pressures reshape how digital infrastructure is being built across the country.
India currently has 1.6 GW of operational data centre capacity, making it the second-largest market in the Asia Pacific region, according to Cushman & Wakefield’s Global Data Center Market Comparison 2026 report. The country also has 3.1 GW under construction and planned, placing it among the top three global development pipelines.
The report shows that growth is no longer concentrated only in large established hubs. Hyderabad was ranked the top secondary data centre market in Asia Pacific and ninth globally among secondary markets, while Chennai, Delhi NCR and Pune also emerged as rising secondary locations.
Mumbai remains India’s largest and most important data centre market and is expected to cross 1 GW of operational capacity by the end of 2026. However, operators are increasingly looking at other cities as demand for AI computing and cloud infrastructure rises.
“The global data center sector is moving into a more execution-driven phase of growth, where access to power, infrastructure readiness and delivery capability are becoming as important as demand itself,” said Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield.
“India is well positioned within this shift given its combination of strong demand visibility, expanding development pipeline, and growing multi-market ecosystem across both primary and emerging locations,” he added.
The report said nearly all new capacity under construction across APAC has already been pre-committed. India’s vacancy levels fell to 12.9% by the end of 2025 despite rapid construction activity.
The expansion is also beginning to expose infrastructure challenges.
A separate KPMG report said the industry’s biggest challenge is no longer demand but the complexity of scaling infrastructure fast enough to meet it.
“Right now, the biggest roadblock to scaling up is not a lack of demand; It is the sheer complexity of meeting the demand,” the report said.
The report added that older Indian facilities still rely on legacy cooling systems that are not designed for modern GPU clusters used in AI workloads, increasing pressure on operators to redesign facilities with higher-density power systems and liquid cooling technologies.
Emerging locations such as Vizag are also being positioned as future AI infrastructure hubs, reflecting the industry’s push towards cities with cheaper land, scalable power access and fewer development bottlenecks.
The shift suggests that India’s next phase of data centre growth may depend less on demand and more on which cities can deliver reliable power, faster approvals and large-scale infrastructure in time to support AI expansion.
