The high growth in internet penetration and AI generated data,together with progressive policies  and investment push ,provided a big impetus to data centres in 2024 which are now set for further growth in 2025.
According to a latest CBRE report, the data centre capacity is likely to reach 1600 MW this year and is further projected to touch 2070 MW mark by the end of 2025. A key growth driver identified by the report is the infrastructure status accorded to the data centre sector, coupled with the 2020 Draft Data Centre Policy, which has fostered a conducive environment for operators and developers. Furthermore, the implementation of the Digital Personal Data Protection Act (DPDPA) in 2023 has facilitated cross-border trade, legitimate data processing, and built stakeholder trust, propelling India’s digital innovation ecosystem. Given the current growth curve, it is forecasted that cumulative investment commitments in data centres are likely to surpass USD 100 billion by the end of 2027.
Mumbai continues to dominate data centre stock, followed by Chennai, Delhi-NCR and Bengaluru, accounting for 90% of the country’s total data centre stock as of September 2024. Currently, India’s total DC stock stands at 19 million sq. ft. (land area), which is expected to reach 31 million sq. ft. by the end of 2025. The report further added that the sector is poised for  a significant growth in 2025, with nearly 475 MW of capacity under construction across major cities like Mumbai, Chennai, and Delhi-NCR. Key demand drivers for the year ahead include BFSI and technology companies.
The report identified state-level policies as a major growth booster for the sector. To foster the growth of the data centre (DC) sector, various state governments in India have implemented dedicated policies and incentives. Many states have deemed DCs as ‘essential services’, underscoring their importance for uninterrupted operations. Maharashtra, Telangana, and Tamil Nadu were pioneers in this regard, releasing state-specific incentives. Subsequently, other states have followed suit, offering substantial incentives and infrastructure support to attract DC investments.
The Data Centre (DC) market in India has experienced substantial investment from global operators, real estate developers, and private equity funds seeking to capitalize on the country’s burgeoning market. Between 2019 and 2024, India attracted investment commitments totalling more than USD 60 billion from both domestic and international investors. Maharashtra, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal emerged as the leading states in terms of cumulative investment commitments. The report anticipates India surpassing USD 100 billion in cumulative investment commitments by the end of 2027.

With key trends such as the rise of Tier-II cities, a strong focus on sustainability, and the increasing demand for AI-driven infrastructure, India is well-positioned to lead global digital innovation, says Ram Chandani, Managing director, advisory & Transaction Services, CBRE India.
The   projected growth in data centres is underpinned by some key trends. Tier-II cities like Ahmedabad, Kochi, Visakhapatnam, and Lucknow are gaining traction as key locations for data centres, driven by regional data consumption growth and cost-efficiency advantages. As sustainability becomes a critical priority, there is a growing focus on integrating renewable energy solutions and advanced cooling technologies, which are helping enhance energy efficiency and reduce the carbon footprint of India’s data centres. Additionally, with AI workloads expected to surpass traditional cloud computing demands, data center operators are making significant upgrades to their infrastructure to accommodate the evolving needs of AI-driven applications, ensuring they can support the next generation of digital transformation.
According to Anshuman Magazine, Chairman & CEO- India, South East Asia, Middle East & Africa, going ahead in 2025 and beyond, Tier 2  cities like Ahmedabad, Kochi, Visakhapatnam and Lucknow are gaining traction as key locations for data centres, driven by regional data consumption growth and cost-efficiency advantages.