India's Data Centres to Attract $20-25 Billion in Investments Over Next 5-6 Years
India's data centre market is set to witness a significant surge, with an expected investment of $20-25 billion over the next five to six years. The market's capacity is projected to triple, driven by the adoption of AI, IoT, and cloud services.
Data CentresInvestmentsAiCloud ServicesReal EstateReal Estate NewsMay 28, 2025
The report, titled 'The Digital Backbone: Data Centre Growth Prospects in India,' highlights that Mumbai and Chennai together hold close to two-thirds of the DC capacity. Mumbai alone accounts for 41% of the total capacity, followed by Chennai and Delhi NCR with 23% and 14%, respectively. This rapid expansion has led to a more than three-fold increase in the real estate footprint over the past 6-7 years, reaching 16 million sq ft as of April 2025.
On the supply front, India has added 859 MW of capacity across the top seven primary DC markets since the beginning of 2020. Mumbai has been the leader in this expansion, contributing 44% of the new supply. Chennai and Delhi NCR together accounted for 42% of the capacity addition during this period.
Looking ahead, the primary DC markets are expected to see a significant influx of new supply. These Tier I markets are likely to witness 3,000-3,700 MW of DC capacity additions during 2025-2030, a four-fold increase compared to the new supply during 2020-2025. While Mumbai will continue to dominate the overall DC market, smaller growth markets such as Hyderabad, Bengaluru, and Pune are expected to see multifold growth in inventory levels. Hyderabad, in particular, is poised to emerge as a major hub alongside Mumbai, Chennai, and Delhi NCR.
Jatin Shah, Chief Operating Officer of Colliers India, commented, “With a DC capacity of about 1,263 MW across the top seven markets, India’s data centre industry has witnessed significant scaling up in the last few years. India is becoming a global DC hotspot, fueled by rapid digitalization, data localization norms, and strong government support. As this growth trajectory continues, India’s DC capacity is likely to cross 4,500 MW in the next 5-6 years, translating into a real estate footprint of 55 million sq ft.”
The report also notes a rise in the proportion of larger-sized DCs (greater than 20 MW) from 42% in 2020 to 56% as of April 2025, indicating a heightened interest in large hyperscale data centres. Vimal Nadar, National Director and Head of Research at Colliers India, added, “In the coming years, the demand for high density rack configurations and advanced computing infrastructure will further rise. DC investments of about $20-25 billion are likely to materialize over the course of the next 5-6 years.”
Frequently Asked Questions
What is the current capacity of India's data centre market?
The current capacity of India's data centre market is approximately 1,263 MW.
Which cities hold the majority of the data centre capacity in India?
Mumbai and Chennai hold close to two-thirds of the data centre capacity, with Mumbai accounting for 41% and Chennai 23%.
What is the projected growth in data centre capacity by 2030?
The projected growth in data centre capacity is expected to reach 4,500 MW by 2030.
How much investment is expected in the data centre market over the next 5-6 years?
The data centre market is expected to attract investments worth $20-25 billion over the next 5-6 years.
Which cities are expected to see significant growth in data centre capacity?
Hyderabad, Bengaluru, and Pune are expected to see multifold growth in data centre capacity, with Hyderabad emerging as a major hub.
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