India Rises as a Global Data Centre Investment Hub: Mumbai Among the Cheapest
India is now recognized as one of the world’s most attractive markets for data centre investment, driven by strong demand for digital infrastructure and cloud services. Mumbai has emerged as the second-lowest-cost city globally for data centre construction in 2025, according to Turner & Townsend’s latest Data Centre Construction Cost Index. The average build cost in Mumbai stands at just $6.64 per watt, ranking it 51st out of the 52 global markets evaluated—making it substantially more affordable than most competing hubs like Singapore or Zurich, where typical construction costs are more than double.
This favorable cost base gives India a strategic edge for both domestic and international investors looking to capitalize on rapid market expansion. The country generates 20% of the world’s data but currently hosts only 3% of global data centre capacity, highlighting enormous growth potential. Electricity tariffs in Mumbai, averaging only 6.71 cents per kWh, further enhance its operational attractiveness. However, industry leaders note that reliable power supply and resilient supply chains remain critical challenges.
The sector’s rapid growth will require significant innovation in energy-efficient design and advanced cooling technologies to support high-density AI workloads. Total regional data centre investment needs are projected at $156 billion. This investment will not only boost the digital infrastructure but also create numerous job opportunities and drive economic growth in the region.
India’s growing data centre market is supported by a robust ecosystem of tech companies, startups, and government initiatives. The Indian government has been proactive in promoting the development of data centres through policies and incentives. For instance, the National Data Centre Policy aims to establish India as a global leader in data management and processing. This policy includes provisions for tax breaks, streamlined regulatory processes, and the development of specialized industrial zones.
Despite the challenges, the future looks promising for the data centre industry in India. The combination of low costs, favorable government policies, and a growing demand for digital services positions India as a key player in the global digital economy. As more companies recognize the strategic advantages of investing in Indian data centres, the market is expected to see significant expansion in the coming years.
