- India has emerged as the second-largest data centre market in the Asia-Pacific (APAC) region, with operational data centre capacity reaching 1.6 gigawatts (GW), according to the Cushman & Wakefield Global Data Center Market Comparison 2026 report.
- The report highlights that rapid adoption of Artificial Intelligence (AI), expansion of hyperscale cloud services, and rising enterprise demand are driving strong growth in India’s digital infrastructure sector.
- In addition to operational capacity, India is also among the top three APAC markets in terms of development pipeline, with nearly 3.1 GW of capacity currently under construction or in the planning stage.
Mumbai Leads India’s Data Centre Expansion
Mumbai continues to be the country’s primary data centre hub and is expected to cross 1 GW of operational capacity by the end of 2026.
The report noted that India’s data centre ecosystem is now spread across multiple cities, including:
- Mumbai
- Hyderabad
- Chennai
- Delhi NCR
- Pune
- Bengaluru
Among secondary markets, Hyderabad has emerged as the strongest performer, ranking first in APAC secondary markets and ninth globally.
Bengaluru has also gained importance and is categorized as a tertiary data centre market in the region.
AI and Cloud Demand Driving Growth
The expansion of hyperscale cloud providers and AI-related workloads is becoming a major driver of data centre investments across India, especially in:
- Mumbai
- Hyderabad
- Pune
According to the report, AI computing requirements and large-scale cloud deployments are significantly influencing future capacity expansion strategies.
India’s long-term growth potential also remains strong, with over 10.5 GW of future capacity currently at the land acquisition stage.
Vacancy Levels Decline Amid Rising Demand
The report stated that India’s data centre market still remains underpenetrated despite rapid growth.
- Data centre density currently stands at around 943,000 people per MW
- Vacancy rates declined to 12.9% by Q4 2025
This indicates increasing demand and stronger utilization of existing facilities.
Government Policies Supporting Growth
India’s long-term outlook is being supported by several policy and infrastructure initiatives.
The proposed Draft National Data Centre Policy 2025 includes:
- Tax exemptions for up to 20 years
- GST input tax credits on capital expenditure
The report also highlighted improvements in India’s power ecosystem, with the country ranking fourth globally in electricity production growth between 2022 and 2025.
However, transmission losses remain high at 14.2%, indicating the need for further improvements in grid efficiency as data centre demand scales up.