CBRE South Asia Pvt. Ltd., report states that India’s data centre capacity is projected to reach approximately 2,070 (Mega Watt) MW by the end of 2025. India’s current data centre capacity stands at 1,255 MW, and it is projected to further expand to around 1,600 MW by the end of 2024.
The country’s accelerated technology proliferation, digital transformation, increased internet penetration, policy enablers, and growth in AI-generated data workload will pivot this growth. One of the key growth drivers identified by the report is the infrastructure status accorded to the data centre sector, coupled with the 2020 Draft Data Centre Policy, which has fostered a conducive environment for operators and developers.
Furthermore, the implementation of the Digital Personal Data Protection Act (DPDPA) in 2023 has facilitated cross-border trade, legitimate data processing, and built stakeholder trust, propelling India's digital innovation ecosystem. Given the current growth curve, it is forecasted that cumulative investment commitments in data centres is likely to surpass USD 100 Bn by the end of 2027.
Mumbai continues to dominate data centre stock, followed by Chennai, Delhi-NCR and Bengaluru, accounting for 90% of the country’s total data centre stock as of Sep’ 2024. Currently, India’s total DC stock stands at 19 Mn. Sq. ft. (land area), which is expected to reach 31 Mn. Sq. ft. by the end of 2025.
The report further added that the sector is poised for significant growth in 2025, with nearly 475 MW of capacity under construction across major cities like Mumbai, Chennai, and Delhi-NCR. Key demand drivers for the year ahead include BFSI and Technology companies.
The report identified state-level policies as a major growth booster for the sector. To foster the growth of the data centre (DC) sector, various state governments in India have implemented dedicated policies and incentives. Many states have deemed DCs as 'essential services', underscoring their importance for uninterrupted operations. Maharashtra, Telangana, and Tamil Nadu were pioneers in this regard, releasing state-specific incentives. Subsequently, other states have followed suit, offering substantial incentives and infrastructure support to attract DC investments.
The Data Centre (DC) market in India has experienced substantial investment from global operators, real estate developers, and private equity funds seeking to capitalize on the country's burgeoning market. Between 2019 and 2024, India attracted investment commitments totalling more than USD 60 billion from both domestic and international investors. Maharashtra, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal emerged as the leading states in terms of cumulative investment commitments. The report anticipates India surpassing USD 100 billion in cumulative investment commitments by the end of 2027.
Tier-II cities like Ahmedabad, Kochi, Visakhapatnam, and Lucknow are gaining traction as key locations for data centers, driven by regional data consumption growth and cost-efficiency advantages. As sustainability becomes a critical priority, there is a growing focus on integrating renewable energy solutions and advanced cooling technologies, which are helping enhance energy efficiency and reduce the carbon footprint of India’s data centres.
Additionally, with AI workloads expected to surpass traditional cloud computing demands, data center operators are making significant upgrades to their infrastructure to accommodate the evolving needs of AI-driven applications, ensuring they can support the next generation of digital transformation.
