New data centre capacity additions in India surged to 258 MW IT in H1 2026, compared to 162 MW IT in H1 2025, registering an impressive 59.3% Y-o-Y growth, taking the country’s total operational stock to 1.8 GW IT. Absorption reached 278 MW IT in H1 2026, up 31.1% Y-o-Y, led by hyperscalers, other smaller cloud players and larger enterprise demand, according to global real estate consultancy Savills India.

“The Indian data centre market continues to witness sustained growth, driven by both established operators and an influx of new funds and developers, seeking to establish a presence in this sector. While the broader colocation market has experienced relatively moderate demand due to increasing enterprise adoption of cloud services, demand from hyperscalers and large enterprises remains strong and is expected to continue underpinning market expansion.

Furthermore, we anticipate emerging demand from Neo-Cloud service providers, many of whom are actively evaluating India as a strategic destination owing to its compelling cost advantages, location agnostic nature, and expanding infrastructure ecosystem. Despite the steady market outlook, facilitation of power and suitable land parcels for DC development, remains a critical challenge across all key data center markets in India, requiring Hyperscalers and DC Operators to explore new clusters for future expansion, with the support of local governments,” said Srihari Srinivasan, Director & Lead – Data Centre Services, Savills India.

Mumbai retained its position as the largest data centre market, accounting for 38% of total absorption in H1 2026, followed by Chennai (26%), Delhi-NCR (22%), and Hyderabad (11%). On the supply side, Mumbai led with a 55% share of total new capacity additions, followed by Chennai (20%) and Hyderabad (10%), while Tier-II cities accounted for 7% of the total.

Of the total operational stock of 1.8 GW IT as of H1 2026, hyperscalers accounted for 36%, followed by enterprise focused facilities at 8% and edge data centres at 1%, while the remaining 55% comprised facilities catering to both hyperscalers and enterprises.

Outlook for 2026

India is continuing to be one of the key emerging data centre markets globally, due to demand driven by rapid digitalisation, cloud adoption, AI-led demand, rise of Neo-Cloud, and expanding data localisation requirements. Supported by strong policy initiatives and significant investments from global and domestic players.

India’s data center market is set for significant expansion, with total capacity projected to nearly fourfold and reach over 7 GW IT by 2030. Annual average capacity additions are expected to accelerate to 350-500 MW IT between 2026 and 2030, nearly double the 150-250 MW IT added annually during 2022 to 2025, while in 2026 both capacity additions and absorption expected to surpass 600 MW IT.

Hyperscale data centres are expected to drive growth through rising cloud adoption and expanding AI workloads, while 5G, IoT, and growing demand for low-latency services are accelerating data centre expansion across selective Tier-II cities.

Significant activity is expected in Hyderabad and Mumbai, , with growing momentum in other locations such as Vizag, Nagpur, Bhubaneswar, Patna, Lucknow, Jaipur, Kochi, Coimbatore, Madurai, Raipur and Hubballi.