India is emerging as one of Asia Pacific’s most significant growth markets for digital infrastructure, as accelerating AI adoption, hyperscale cloud expansion, and rising enterprise demand continue to reshape global data center development patterns, according to Cushman & Wakefield’s Global Data Center Market Comparison 2026 report. The country ranks as the second-largest market in the region with 1.6 GW of operational capacity and is also among the top three markets by development pipeline, with 3.1 GW under construction and planned.

The report evaluates 107 global markets across 24 variables, including real estate fundamentals, power infrastructure, development activity, regulation, and operational risk, offering a forward-looking perspective on data center market dynamics.

Globally, data center markets are entering a new phase of expansion shaped by accelerating AI adoption, hyperscale cloud demand, and increasing pressure on power infrastructure and development timelines. The report notes that while demand fundamentals remain exceptionally strong, market competitiveness is increasingly being defined by power availability, execution capability, land access, and regulatory readiness. Dallas ranked as the world’s leading primary data center market in the 2026 edition, followed by Atlanta, Virginia, Columbus, and Johor. Within APAC, Johor and Sydney were the only primary markets to feature in the global top 10 rankings, while Hyderabad ranked ninth globally among secondary markets.

India’s data center ecosystem is supported by a multi-market presence, with Mumbai, Hyderabad, Chennai, Delhi NCR, Pune and Bengaluru included among the 107 global markets evaluated.

The report categorizes data center markets into primary, secondary, and tertiary markets, noting that while primary markets remain highly desirable due to their scale and maturity, large-scale development interest is increasingly expanding into secondary and tertiary markets as growth opportunities broaden.

Within this framework, Mumbai anchors India’s position as a primary market in Asia Pacific and continues to play a central role in regional expansion. The city is identified as one of the fastest-growing markets in the region and is expected to surpass 1 GW of operational capacity by the end of 2026.

Growth is increasingly being supported by secondary markets such as Hyderabad, Chennai, Delhi NCR and Pune, which are seeing rising levels of investment and development activity. Hyderabad, in particular, is highlighted as the top secondary market in Asia Pacific and ninth globally, underscoring its growing prominence in the data center landscape. Bengaluru is positioned as a tertiary data center market within the regional data center landscape.

Hyperscaler demand remains a key driver of expansion across India, particularly in Mumbai, Hyderabad, and Pune. AI workloads and large-scale cloud deployments are increasingly influencing capacity expansion strategies across Indian markets. The report also highlights the emergence of locations such as Vizag, which is positioning itself as a future AI hub, reflecting a broader shift toward scalable markets capable of supporting next-generation digital infrastructure.

India’s growth is further reinforced by the scale of its long-term expansion pipeline. Over 10.5 GW of capacity remains at the land stage, reflecting strong future development potential as operators continue to secure sites and prepare for sustained demand.

At the same time, the market remains structurally underpenetrated, with data center density at approximately 943,000 people per MW, indicating significant headroom for growth. Vacancy has declined to 12.9% as of Q4 2025, pointing to continued absorption of new capacity and strengthening demand fundamentals.

India’s momentum mirrors broader trends across Asia Pacific, where strong hyperscale and AI-led demand continue to tighten supply across major markets.

Operational inventory across APAC continued to expand, adding over 1.5 GW during the year, representing a 13% increase in capacity. Despite aggressive development activity, vacancy across the region declined from 12.4% to 10.9% over the year, underscoring sustained occupier demand for digital infrastructure.

Most new data centers in APAC are now fully leased before completion, reflecting the intensity of hyperscale and AI-led demand. Nearly all capacity under construction has been pre-committed, even as development pipelines continue to expand at approximately 20% year-on-year, highlighting continued pressure on available supply.

India’s long-term outlook is further supported by policy and infrastructure developments. The Draft National Data Centre Policy 2025 proposes tax exemptions of up to 20 years along with GST input tax credits on capital expenditure, signalling a supportive regulatory framework for continued investment. This is complemented by improvements in the power ecosystem. India ranked fourth globally in electricity production growth between 2022 and 2025, reflecting expansion in generation capacity. However, transmission losses remain at 14.2%, highlighting the need for continued improvements in grid efficiency as demand continues to scale.

“The global data center sector is moving into a more execution-driven phase of growth, where access to power, infrastructure readiness and delivery capability are becoming as important as demand itself,” said Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield. “India is well positioned within this shift given its combination of strong demand visibility, expanding development pipeline, and growing multi-market ecosystem across both primary and emerging locations. As capacity requirements continue to evolve, markets that can support scalable deployment, reliable infrastructure, and faster execution timelines are expected to see stronger long-term momentum.”