Driven by digitisation, AI adoption, corporate investment boost and supportive government policies, data centres are in a fast lane. 

According to a recent report by CBRE, India’s total data centre capacity reached 1530 MW at the end of September 2025, with Mumbai having the lion’s share of 53%. As much as 260 MW of data centre supply was added during 9M 2025. Over the past 4-5 years following rapid digital transformation, the country’s data centre capacity has seen a significant growth. The four cities of Mumbai, Chennai, Delhi-NCR and Bengaluru account for nearly 90% of the country’s total DC capacity.

Says Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE “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.”  

Compared to global markets such as Singapore, China and Japan, India offers one of the most cost-competitive DC environments globally, supported by relatively lower construction and electricity costs. 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.” 

Going forward, 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, with India emerging as one of the biggest DC markets globally.