Mumbai has emerged as India’s undisputed data centre capital, accounting for 53% of the country’s total capacity of about 1,530 MW as of September 2025, according to a new CBRE report titled “India’s Data Centre Market in a New Era.” The city’s dominance is driven by its proximity to key global internet exchange points and submarine cable landing stations.

With Chennai, Delhi-NCR, and Bengaluru following, these four cities together host nearly 90% of India’s total data centre capacity, underscoring the country’s accelerating digital transformation and growing appeal to global investors.

According to the report, the DC capacity crossed ~1.5 GW for the first time during 9M 2025. Supply of ~260 MW has been added between January and September this year. The growth is mainly driven by rapid digitalisation, favourable government regulations, and increasing corporate investments in Artificial Intelligence (AI).

According to Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, India’s Data Centre capacity has seen significant growth in the last four to five years, mirroring the country’s rapid digital transformation.

“Rapid digitalisation due to rising internet penetration, cloud adoption, and the emergence of AI and Internet of Things (IoT), has taken the need for strong data infrastructure to new heights. This is being supported by government policies and data localisation norms, positioning India as a key hub for global as well as domestic investors. Looking ahead, as enterprises accelerate their digital transformation journeys, India is set to emerge as one of the most critical data centre markets in the world,” he added.

India offers one of the most cost-competitive DC environments globally, supported by relatively lower construction and electricity costs as compared to markets such as Singapore, China, and Japan. It also has a large pool of digital and AI talent, accounting for nearly 16% of the global AI workforce with over 600,000 professionals. This is expected to double by 2027.

The CBRE report said that India has attracted nearly USD 94 billion in DC investment commitments since 2019, with Telangana, Maharashtra, and Tamil Nadu emerging as the top three destinations.

The country’s DC sector witnessed investment commitments worth around USD 30 billion during the January-September 2025 period.

Ram Chandnani, Managing Director, Leasing, CBRE India, said, “AI has been contributing significantly to India’s economic growth ranging from advanced research and development to data solutions across industries. Generative AI holds significant potential for the country’s economy and is poised to unleash the next wave of DC demand. Moreover, AI is also impacting global capability centres helping them focus on automation, talent transformation, and cost optimisation. More GCCs are leveraging AI to improve efficiency, enhance service delivery, and drive innovation.”

In the coming months, the demand for DC facilities is likely to be driven by technology firms, BFSI companies, e-commerce and cloud services. Moreover, DC operators are expected to expand their presence in tier-2 markets, driven by rising data consumption in smaller cities.

Magazine said that the future of DCs in India is full of potential. “With digitalisation and AI adoption expected to only go up, India is likely to emerge as one of the biggest DC markets globally,” he said.