India’s data centre (DC) industry has witnessed an unprecedented investment inflow of $6.5 billion through private equity (PE), joint ventures (JVs), and acquisitions between 2014 and 2024, according to ANAROCK Capital’s latest report, India Data Centre Market: Growth, Trends & Outlook. The industry’s rapid expansion is underscored by a 139% increase in IT power capacity, surging from 590 MW in 2019 to 1.4 GW in 2024.
Exponential Growth in Internet & Data Consumption
The report attributes this dramatic surge to rising internet penetration and an explosive increase in data usage. India’s internet penetration rate has jumped from 33.4% in 2019 to 55.2% in 2024, while data consumption per user has nearly doubled from 11.5 GB to 21.1 GB per month. Additionally, average traffic per smartphone has skyrocketed from 13 GB to 32 GB, placing India among the global leaders in mobile data usage.
“India now leads the world in average mobile data traffic per smartphone, which has directly impacted the demand for high-grade data centres,” said Devi Shankar, Executive Director – Industrial, Logistics & Data Centres, ANAROCK Capital.
Market Concentration: Mumbai & Chennai Lead the Charge
The Indian data centre industry remains heavily concentrated in Mumbai and Chennai, which together account for 70% of India’s total IT power capacity. Mumbai alone contributes 49%, making it the dominant hub.
From 2022 to 2024, the supply of data centres grew at record rates in these two cities:
- Mumbai: 92% growth
- Chennai: 340% growth
Other emerging data centre hubs include:
- Noida: 9%
- Bengaluru: 8%
- Hyderabad: 4%
- Pune: 5%
The overall data centre occupancy level across these regions stands at 76%, reflecting robust demand and high operational efficiency.
Investment & Land Acquisition Trends
India has become a hotspot for hyperscalers, which are increasingly adopting the ‘own-and-operate’ model. Over the last five years, 440 acres of land have been acquired for hyperscaler developments across major cities:
- Hyderabad: 69%
- Mumbai: 22%
- Pune: 9%
Financial & Deployment Trends
India’s data centre market is currently valued at $10 billion, with $1.2 billion in revenue recorded for FY 2024. Notably, four major operators generate 78% of this revenue.
“While EBITDA growth had plateaued post-2020, it is projected to rise by 50-55% as under-construction projects become fully operational,” said Shobhit Agarwal, MD & CEO – ANAROCK Capital.
The capital deployment between 2022 and 2024 reached $4.2 billion, with a breakdown of:
- $2.6 billion in equity
- $2.4 billion in debt
This signals an aggressive expansion trend, driven by rising investor confidence and growing demand for data infrastructure.
Key Trends for 2025 and Beyond
1. AI-Driven Demand
Artificial Intelligence (AI) is poised to drive the next wave of data centre requirements. To support AI-heavy workloads, future-ready DCs will need:
- Liquid cooling technologies
- Rack densities exceeding 30–40 kW per rack
- Floor loads up to 2,500 kg/sq.m.
2. Expansion of Edge Data Centres in Tier-II Cities
To bring computing closer to users, edge data centres—small, decentralized facilities—are emerging in Tier-II and Tier-III cities such as Jaipur, Ahmedabad, Kochi, Vizag, Lucknow, Patna, and Bhubaneshwar.
“Edge data centres will be crucial for latency-sensitive applications and AI-driven services,” said Ankita Sahu, Sr. Manager – Industrial, Logistics & Data Centres, ANAROCK Capital. These facilities reduce latency, enhance bandwidth efficiency, and enable context-aware processing for real-time applications.
3. Sustainability & Green Data Centres
With rising environmental concerns, the industry is shifting toward sustainable data centres that prioritize:
- Energy-efficient designs
- Renewable energy integration
- Sustainable cooling methods
The Future of India’s Data Centre Industry
India’s data centre market is on a robust growth trajectory, driven by soaring data consumption, aggressive capital investments, hyperscaler expansions, and AI-led infrastructure demands. With a strong push towards sustainability and decentralization through edge DCs, India is poised to become a global leader in data infrastructure.
Also Read: Amazon India Data services
