The report highlights that India now ranks as the second-largest data centre market in the Asia Pacific (APAC) region, with 1.6 GW of operational capacity, driven by rapid adoption of artificial intelligence (AI), hyperscale cloud expansion, and growing enterprise demand.

Mumbai Leads, Hyderabad Gains Global Prominence

Among Indian cities, Mumbai has emerged as a primary data centre hub in APAC and is expected to cross 1 GW of operational capacity by the end of 2026. The city continues to anchor India’s data centre growth due to its strong connectivity, financial ecosystem, and proximity to subsea cable landing stations.

Meanwhile, Hyderabad has gained global recognition, ranking ninth among secondary data centre markets worldwide. It is also identified as the leading secondary market in APAC, reflecting strong investor interest and infrastructure readiness.

Other cities such as Chennai, Delhi NCR, Pune, and Bengaluru are also witnessing increasing development activity, indicating a multi-market growth strategy.

Strong Pipeline and Future Capacity

India’s long-term growth outlook remains robust, with over 10.5 GW of additional capacity currently at the land acquisition stage. This signals sustained investor confidence and a strong pipeline of future projects.

Despite this rapid expansion, the sector remains underpenetrated. Data centre density in India stands at approximately 943,000 people per MW, suggesting significant room for further growth compared to global benchmarks.

Vacancy levels have also tightened, declining to 12.9% as of Q4 2025, indicating strong absorption of new capacity and sustained demand.

AI and Hyperscalers Driving Demand

The report notes that hyperscaler demand—led by global cloud providers—and the increasing adoption of AI workloads are the primary drivers of capacity expansion in India. Cities like Mumbai, Hyderabad, and Pune are witnessing large-scale deployments as enterprises scale their digital operations.

Emerging locations such as Visakhapatnam are also being positioned as future AI and data infrastructure hubs, reflecting a shift toward newer, scalable markets.

APAC Trends Mirror India’s Growth

India’s growth aligns with broader trends across the APAC region, where data centre capacity expanded by over 1.5 GW in the past year alone—a 13% increase. Vacancy across the region declined from 12.4% to 10.9%, underscoring strong occupier demand.

Notably, most new data centres are being pre-leased before completion, with nearly all under-construction capacity already committed. This highlights the intensity of demand and supply constraints across key markets.

Policy Support and Power Challenges

India’s data centre expansion is further supported by policy initiatives such as the Draft National Data Centre Policy 2025, which proposes tax incentives and GST benefits to attract investment.

Additionally, the country ranked fourth globally in electricity production growth between 2022 and 2025, strengthening its ability to support energy-intensive data centre infrastructure. However, transmission losses of over 14% remain a concern, pointing to the need for continued upgrades in grid efficiency.

Execution Will Define Next Phase

Industry experts note that the global data centre sector is shifting from a demand-driven to an execution-driven growth phase, where access to power, land, and regulatory approvals will determine market competitiveness.

India’s combination of strong demand visibility, expanding infrastructure, and a growing multi-city ecosystem positions it well to capitalize on this shift. However, timely execution and infrastructure readiness will be critical in sustaining long-term growth momentum.

Also Read: Faster Internet, Better Streaming: How India’s $22Bn Data Boom Will Impact You

The post India’s Data Centre Boom Accelerates with 3.1 GW Pipeline, Mumbai Emerges as Key Hub appeared first on Square Feat India.

From smoother OTT streaming to faster UPI payments and better app performance, the expansion of data centres is quietly becoming the backbone of India’s digital lifestyle.

What Are Data Centres—and Why Should You Care?

Data centres are essentially large facilities that store and process the data behind:

• Your WhatsApp messages
• UPI transactions
• Netflix and YouTube streaming
• Online shopping and banking

Every time you use the internet, your request travels to a data centre and comes back with the result. The closer and more powerful these data centres are, the faster and smoother your experience becomes.

What This Growth Means for You

1. Faster Internet Speeds and Less Buffering

With more data centres being built across India, especially in cities like Mumbai and Chennai:

• Videos will load faster
• Gaming will have lower lag
• Apps will respond quicker

This is especially important as Indians are now consuming over 25 GB of mobile data per month on average.

2. Smoother UPI and Digital Payments

India’s growing reliance on digital payments means:

• Faster transaction processing
• Reduced chances of payment failures
• Better reliability during peak hours

As more data centres come online, platforms handling millions of transactions daily will become more stable.

3. Better OTT & Entertainment Experience

Whether it’s binge-watching shows or watching live cricket:

• Less buffering during peak hours
• Higher video quality (HD/4K streaming)
• Improved user experience on platforms

This is because content gets stored closer to users via local data centres.

4. More Jobs and Local Development

The data centre boom is also creating:

• Jobs in construction, IT, and maintenance
• Demand for land and infrastructure
• Growth in cities like Pune, Hyderabad, and Bengaluru

Even Tier-2 cities are now emerging as future hubs, bringing development beyond metros.

5. Boost to AI and Future Technologies

With the rise of Artificial Intelligence (AI):

• Faster AI tools and services for users
• Better recommendations on apps
• Smarter digital services

India is positioning itself as a global hub for AI infrastructure, which will shape future digital experiences.

Why India Is Becoming a Data Hub

India is attracting massive investments due to:

• Lower costs compared to countries like Japan and Singapore
• Government incentives and policies
• Rapid digital adoption across sectors

Between 2020 and 2024 alone, the sector attracted $13–15 billion in investments, and another $60–70 billion pipeline is expected in the coming years.

Mumbai Leads, But New Cities Are Catching Up

Currently:

• Mumbai holds nearly 49% of India’s data centre capacity
• Chennai follows with strong global connectivity
• Cities like Ahmedabad, Kochi, and Jaipur are emerging as new hubs

This means better digital services not just in metros, but across India.

City-wise Share of Operational Capacity

The Bigger Picture

India’s total data centre capacity is expected to grow from around 1.5 GW today to 4–5 GW by 2030. This expansion is being driven by:

• Rising internet users
• Growth of cloud computing
• Increasing use of AI and digital platforms

Conclusion

While data centres may seem like a backend infrastructure story, their impact is very real for everyday users. From faster internet and seamless payments to better streaming and job creation, this $22 billion growth story is set to touch nearly every Indian connected to the digital world.

Also Read: Data center stock to double in next 3 years to 20 million sq ft

The post Faster Internet, Better Streaming: How India’s $22Bn Data Boom Will Impact You appeared first on Square Feat India.

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

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India’s data centre market is on track for unprecedented expansion, with total capacity projected to reach 2 GW by 2026, according to industry estimates. Currently, 525 MW of data centre capacity is under construction across key cities like Mumbai, Chennai, Hyderabad, and Bengaluru. Fueled by advances in cloud computing, 5G rollouts, and the digitalisation of sectors such as BFSI, the market is expected to hit $11.6 billion by 2032.

Institutional investors have increasingly recognized data centres as a lucrative asset class, deploying significant capital into the sector. Key trends shaping the industry for 2025 and beyond are as follows:

1. Large-Scale Data Centre Campuses

Operators are ramping up investments in mega-projects exceeding 100 MW, particularly in Navi Mumbai and Chennai. Hyderabad is also emerging as a hotspot for hyperscale developments, with major projects spanning over 100 acres in progress to meet the surging demand from AI-led applications and cloud computing.

2. Emergence of New Availability Zones and Micro-Markets

The rising cost and scarcity of land in traditional data centre hubs are pushing operators to explore alternative locations near Mumbai and Chennai. These new micro-markets aim to sustain growth while balancing costs.

3. AI-Driven Demand and Infrastructure Evolution

India’s AI market is projected to grow at a CAGR of over 20% between 2023 and 2028, according to NASSCOM. This surge in AI workloads is driving increased power consumption and higher rack densities, with average densities expected to rise from 8-10 KW per rack to 30 KW per rack by 2025.

4. Sustainable Cooling Technologies

To address growing power demands, operators are adopting advanced cooling methods like liquid immersion cooling. This technology promises better energy efficiency and cost savings, particularly in hyperscale and AI-specific facilities.

5. Collaborations Between Chipmakers and Infrastructure Providers

Partnerships between companies like NVIDIA and Yotta, as well as Tata Group and Reliance Jio Infocomm, are paving the way for sustainable, energy-efficient data centres. These collaborations align with the government’s “India AI” mission and are expected to yield substantial benefits for the ecosystem.

6. Development of Edge Data Centres

Smaller, localized data centres closer to end-users are gaining traction, particularly in tier II and tier III cities such as Patna, Jaipur, Lucknow, Ahmedabad, and Bhubaneshwar. These facilities aim to reduce latency and handle the growing data traffic from IoT devices, OTT platforms, and Smart Cities.

7. Migration to Cloud-Based Infrastructure

An increasing number of companies are shifting from on-premise IT systems to hybrid cloud environments. This transition offers cost savings, scalability, and enhanced security, further driving demand for data centre facilities.

8. Focus on Green Data Centres

Environmental, Social, and Governance (ESG) considerations are reshaping the industry. Operators are increasingly integrating renewable energy sources like wind and solar into their operations. Some are aiming for 100% green facilities, with investments in renewable energy projects and nuclear energy also under exploration.

9. Enhanced Security Protocols

Advanced security measures such as AI-powered tools, Zero Trust Architecture, and multi-factor authentication are being implemented to counter evolving cyber threats and ensure robust data protection.

10. Skill Development Initiatives

Efforts to upskill the workforce in hardware, software, and IT infrastructure management are underway. Both government and private players are focusing on training programs to align with the sector’s rapid growth.

With strong support from institutional capital, technological advancements, and regulatory frameworks, India’s data centre industry is poised to solidify its position as a critical pillar of the nation’s digital ecosystem by 2025.

Also Read: Amazon India Data services

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