India’s data centre market is entering a major expansion phase, with operational capacity expected to approach 2 GW by the end of 2026 and cumulative investment commitments reaching approximately $173 billion.

India added around 130 MW of new data centre capacity in H1 2026, taking operational stock to nearly 1,750 MW. More than 200 MW is expected to become operational in H2 2026.

The expansion is being driven by hyperscalers, cloud service providers, BFSI companies and increasingly by artificial intelligence workloads that require significantly higher computing and power density.

India has also moved from an Asia-Pacific “High Growth Market” to the “Leading Data Centre Markets” category in 2026, joining Japan, Australia and Mainland China.

India Data Centre Investments Reach $173 Billion

India attracted approximately $38 billion in data centre investment commitments in H1 2026, pushing cumulative commitments since 2021 to about $173 billion.

Investment commitments have increased rapidly from $18 billion in 2021 to $23 billion in 2022, $55 billion in 2023, $78 billion in 2024, $135 billion in 2025 and $173 billion by H1 2026.

Colocation represents 32 percent of cumulative commitments, while hyperscale accounts for another 30 percent, giving the two categories a combined 62 percent share. AI accounts for 16 percent, highlighting how quickly AI infrastructure is emerging as an investment priority.

Hyperscale developments alone have attracted approximately $48 billion in commitments since 2021. Global cloud companies including AWS, Microsoft and Google are acquiring land to build captive capacity, while data centre operators are expanding through greenfield projects, joint ventures and strategic land acquisitions.

AI Changes Data Centre Power and Infrastructure Requirements

AI is likely to become one of the biggest drivers of India’s next data centre investment cycle.

CBRE’s operator survey indicates that hyperscale and neo-cloud customers could require 30-50 kW per rack, compared with only 8-10 kW per rack in traditional data centre facilities.

This shift increases requirements for power infrastructure, advanced cooling, high-speed networking and renewable-energy procurement.

AI inference could also influence where future capacity is constructed. As AI moves from model training toward enterprise deployment, lower-latency infrastructure closer to users will become increasingly important. Neo-cloud operators offering GPU-as-a-Service and TPU-as-a-Service are also beginning to gain traction in India.

Mumbai Leads India Data Centre Market with 52 percent Share

Mumbai remains India’s dominant data centre hub, accounting for 52 percent of operational capacity, or approximately 0.9 GW, in H1 2026.

Chennai held an 18 percent share, followed by Delhi-NCR at 11 percent, Pune at 8 percent, Bengaluru at 7 percent, Hyderabad at 3 percent and Kolkata at 2 percent.

Mumbai was even more dominant in new capacity additions, capturing 94 percent of the approximately 130 MW commissioned in H1 2026, while Chennai accounted for the remaining 6 percent.

Navi Mumbai and Siruseri in Chennai remain important micro-markets because of their connectivity infrastructure, cable landing stations and established technology ecosystems.

Indian Developers Capture 48 percent of New Supply

Domestic companies are becoming increasingly important to India’s data centre expansion.

Indian developers accounted for 48 percent of new supply in H1 2026, compared with American companies at 28 percent and European companies at 24 percent.

Domestic investors also accounted for 38 percent of cumulative capital commitments since 2021, ahead of the United States at 27 percent. Multi-city portfolios represented more than 85 percent of commitments in H1 2026, demonstrating increasing geographical diversification.

92 percent of Operators Plan More Than 100 MW Expansion

The development pipeline suggests strong capacity additions will continue beyond 2026.

CBRE found that 92 percent of surveyed data centre operators plan to add more than 100 MW of capacity over the next 24 months. Around 75 percent expect to add more than 250 MW, while 17 percent plan additions of 100-250 MW.

BFSI and cloud companies are the leading sources of demand. 83 percent of surveyed operators identified BFSI companies as major demand drivers, followed by cloud service providers at 75 percent, technology companies at 42 percent and government, defence and PSU organisations at 33 percent.

Connectivity and Tier IV Infrastructure Gain Importance

Network connectivity emerged as the most important site-selection factor, cited by 75 percent of surveyed operators. Power availability followed at 67 percent, proximity to customers at 58 percent and land costs at 50 percent.

India is simultaneously moving toward more resilient facilities. Tier IV data centres represented 43 percent of overall supply in H1 2026, up from just 21 percent in 2024.

The trend reflects growing demand for highly available infrastructure supporting cloud, banking, government and AI applications.

Renewable Power Becomes Critical for AI Data Centres

Power availability could become one of the biggest considerations as AI infrastructure pushes rack density higher.

Renewables currently meet around 30-40 percent of operational energy requirements for most data centre operators surveyed. Operators are increasingly using direct procurement, power purchase agreements and green-energy partnerships.

India’s Renewable Consumption Obligation framework envisages mandated green-power procurement rising from 29.91 percent in FY2025 to 43.33 percent by FY2030.

Hyderabad, Bengaluru and Visakhapatnam Are Next Growth Hubs

More than 80 percent of India’s operational data centre capacity remains concentrated in Mumbai, Chennai and Delhi-NCR, but the next wave of capacity is expected to spread into Hyderabad, Bengaluru, Kolkata and Visakhapatnam.

Availability of land, power and water, combined with state-level incentives, is expected to support development in these emerging markets.

India’s data centre story is therefore moving beyond simple capacity expansion. With 1.75 GW already operational, 2 GW within reach, $173 billion in investment commitments and AI infrastructure requiring up to 30-50 kW per rack, the next phase will be defined by AI-ready facilities, hyperscale investment, power availability, renewable energy, cooling and low-latency connectivity.

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