India’s data centre capacity set to reach 2GW by 2026, backed by $30 billion in investments: Report

India is rapidly emerging as a strategic data centre hub within the Asia-Pacific region, driven by a fast-expanding digital economy, a growing internet user base, and rising investments from hyperscale operators.

According to Vestian’s latest report, the country’s installed data centre capacity is projected to reach 1.7-2.0 GW by the end of 2026, backed by nearly $30 billion in investments. Vestian is a Chicago-based, occupier-focused workplace solutions firm with expertise across commercial, residential, industrial, retail, and hospitality sectors.

Currently, India hosts 164 data centres, trailing markets such as Italy, Mexico, and Brazil. In comparison, the United States has the largest footprint globally, with over 5,000 data centres.

According to the report, India’s data centre market, valued at approximately $10 billion in 2025 — is expected to more than double to $22 billion by 2030, highlighting a strong growth trajectory and increasing investor confidence.

Globally, the data centre market is witnessing significant expansion, with current installed capacity estimated at 40-50 GW and projections exceeding 100 GW by 2030. This growth is largely being driven by the rapid adoption of cloud computing, AI, and other data-intensive technologies.

In India, the surge is underpinned by a sharp rise in internet and telecom subscribers, increasing enterprise cloud adoption, expanding AI and high-performance computing workloads, and a shift in consumer behaviour towards digital payments and OTT platforms.

The construction pipeline remains robust, with over 700 MW currently under development and an additional 1-2 GW in the planning stage. Overall, the country is expected to add 2–3 GW over the next five to seven years, indicating sustained demand and absorption.

The rollout of 5G has further accelerated data consumption, with average monthly wireless usage crossing 25 GB per user, reinforcing the need for scalable data centre infrastructure.

Shrinivas Rao, FRICS, CEO, Vestian said, "India's data centre sector is rapidly transforming on the back of strong policy support and rising digital demand. Despite a limited share of global capacity, India has a huge upside potential to lead in Al infrastructure. With single-window clearances, 20-year tax exemptions, GST benefits, and incentives extending to 2047, India is strategically positioned to emerge as a global data centre and Al hub."

The sector has attracted significant investor interest. Between 2020 and 2024, it drew approximately $13-15 billion in investments, with foreign institutional investors accounting for nearly 80% of total inflows. The pipeline remains strong, with announced projects worth $60-70 billion over the next five years, largely led by hyperscale platforms and joint ventures.

India also offers a cost advantage, with data centre construction costs at $6-7 million per MW — significantly lower than in mature APAC markets such as Singapore and Japan — enhancing its appeal for large-scale investments.

Geographically, data centre capacity remains concentrated in key metropolitan markets. Mumbai leads with a 49% share, benefiting from strong global connectivity and infrastructure. Chennai follows with 18%, supported by multiple submarine cable landings enabling high-capacity, low-latency connectivity.

Hyderabad, Bengaluru, and Pune are emerging as key secondary hubs, backed by strong IT ecosystems, land availability, and competitive operating costs.

Meanwhile, Tier-II cities such as Ahmedabad, Kochi, Jaipur, and Visakhapatnam are gaining traction due to better land availability, improving digital infrastructure, supportive state policies, and rising enterprise demand. Operational capacity in these markets is currently estimated at 60–80 MW and is expected to exceed 100 MW by the end of 2026.

Overall, India’s data centre market is poised for sustained expansion over the next decade as digital transformation accelerates across sectors.