India is rapidly emerging as one of the world’s most attractive destinations for data centre investment, with Mumbai standing out as a global cost leader. According to the latest Turner & Townsend Data Centre Construction Cost Index 2025, Mumbai ranks as the second-lowest-cost region worldwide for building data centres.
The report reveals that constructing a data centre in Mumbai costs just USD 6.64 per watt, placing the city 51st out of 52 global markets assessed, where the first rank denotes the highest cost and the 52nd the lowest. In other words, Mumbai is effectively the second most cost-efficient city in the world for data centre construction.
The ranking is based on the cost per watt to build data centres, with 1st rank representing the highest construction costs and 52nd the lowest.
Thus, Mumbai’s 51st position indicates it is the second most cost-effective city in the world for data centre construction, offering significantly lower costs compared to most other markets.
This low-cost advantage gives India a critical strategic edge as companies expand their digital infrastructure to meet the surging global demand for cloud storage, AI computing, and data-heavy applications. Compared to mature data centre hubs like Tokyo, Singapore, and Zurich, where construction costs per watt are at least double, Mumbai presents an extremely competitive environment for investors.
Adding to the appeal is the city’s cheaper electricity tariff, which stands at 6.71 US cents per kWh which is more than 50% lower than Shanghai. This not only reduces operational expenses but also strengthens India’s position as a sustainable and cost-efficient alternative for global hyperscalers.
Despite this advantage, the gap between India’s data production and its hosting capacity remains stark. While India generates nearly 20% of the world’s data, it currently houses only about 3% of global data centre capacity. This imbalance points to massive untapped potential and explains why investors are looking at India as the next big frontier for digital infrastructure.
The Turner & Townsend report places India, along with Japan and Singapore, among the top data centre markets in the Asia-Pacific region after Mainland China. To meet the growing demand for storage and computing, the country is projected to need an investment of USD 156 billion for regional buildout in the coming years.
“India sits at a crucial global inflection point, with markets like Mumbai offering a potent combination of competitive construction costs and a massive projected opportunity,” said Sumit Mukherjee, Managing Director for Real Estate in Asia at Turner & Townsend. “This low-cost base provides India with a salient advantage for data centre investment.”
However, the report also underlines several pressing challenges. Securing reliable power supply and strengthening supply chains remain key hurdles to unlocking India’s full potential in this sector. The analysis notes that the average global construction cost inflation for data centres in 2025 is projected at 5.5%, underscoring the need for developers to optimise their procurement strategies.
Turner & Townsend recommends that developers rethink their supply chain structures to ensure faster, more reliable project delivery—particularly for AI-driven data centres that demand high-density, GPU-optimised infrastructure. The report also stresses the importance of innovation in energy-efficient design, especially as cooling systems and power reliability become decisive factors in data centre performance.
“To fully capture the benefits of the AI transformation, developers must urgently prioritise securing reliable power and water availability,” Mukherjee added. “Strategic investment in advanced cooling and energy-efficient designs is now absolutely critical.”
As artificial intelligence accelerates global computing needs, India’s competitive construction costs, abundant land availability, and expanding digital ecosystem position it at the centre of a new data infrastructure boom. Mumbai’s ranking underscores how the country is not just catching up but actively shaping the future of digital infrastructure economics.
The next phase of India’s data centre growth will depend on how quickly the industry can overcome logistical and power-related constraints. If addressed effectively, the combination of affordability, innovation, and scale could transform India into a global hub for next-generation data centres, powering the digital ambitions of both domestic and international enterprises.
