India Rises as a Global Data Centre Investment Hub: Mumbai Among the Cheapest
India is quickly becoming a top destination for data centre investments, with Mumbai emerging as one of the most cost-effective cities for construction. This low-cost base positions India as a strategic location for both domestic and international investors.
Data CentreInvestmentMumbaiDigital InfrastructureCloud ServicesReal Estate MumbaiNov 11, 2025
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.
Frequently Asked Questions
Why is Mumbai considered one of the cheapest cities for data centre construction?
Mumbai is considered one of the cheapest cities for data centre construction due to its low average build cost of just $6.64 per watt, which is significantly lower than other global hubs like Singapore or Zurich.
What is the growth potential for data centres in India?
India generates 20% of the world’s data but currently hosts only 3% of global data centre capacity, highlighting enormous growth potential. Total regional data centre investment needs are projected at $156 billion.
What challenges does the data centre industry face in India?
The data centre industry in India faces challenges such as ensuring a reliable power supply and resilient supply chains. Advanced cooling technologies and energy-efficient designs are also crucial for supporting high-density AI workloads.
What government policies support the growth of data centres in India?
The Indian government has introduced the National Data Centre Policy, which includes provisions for tax breaks, streamlined regulatory processes, and the development of specialized industrial zones to promote the growth of data centres.
What is the projected investment for data centres in the region?
The total regional data centre investment needs are projected at $156 billion, which will be crucial for expanding the digital infrastructure and meeting the growing demand for cloud services and digital solutions.
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