Amid this transformation, India is emerging as a strategic hub within the Asia-Pacific region. The country’s accelerating digital economy, expanding internet user base, and increasing investments from hyperscale operators are positioning it as a key destination for data infrastructure development. According to Vestian’s latest report, India’s data centre market—valued at approximately USD 10 billion in 2025—is expected to more than double to USD 22 billion by 2030, underscoring the strong growth trajectory and rising investor confidence in the sector.

This rapid growth can be attributed to rising internet and telecommunications subscribers, increasing enterprise cloud adoption, expanding AI and high-performance computing workloads, and shifting consumer preferences towards digital payments and OTT platforms. The rollout of 5G infrastructure has pushed average monthly wireless data consumption beyond 25 GB per user, reflecting a sharp rise in data usage and reinforcing the need for scalable data centre infrastructure.

A Snapshot of India’s Data Centre Market

Source: Vestian Research

Shrinivas Rao, FRICS, CEO, Vestian said, “India’s data centre sector is rapidly transforming on the back of strong policy  support and  rising digital demand. Despite a limited share of global capacity, India has a huge upside potential to lead in Al infrastructure. With single-window clearances, 20-year tax exemptions, GST benefits, and incentives extending to 2047, India is strategically positioned to emerge as a global data centre and Al hub.”

Robust Investment Pipeline Signals Strong Growth Ahead

India’s data centre industry has attracted significant investments from global and domestic investors. Between 2020 and 2024, the sector attracted approximately USD 13–15 Bn in investments, with foreign institutional investors accounting for nearly 80% of the total capital inflows. The investment pipeline remains strong, with announced projects totalling USD 60–70 Bn over the next five years, largely driven by hyperscale platforms and joint venture developments.

India also offers a competitive cost advantage, with data centre construction costs of USD 6–7 Mn/MW, significantly lower than those in mature APAC markets such as Singapore and Japan, thereby enhancing its attractiveness for large-scale investments.

City-wise Analysis

Data centre infrastructure in India remains concentrated in a few key metropolitan markets. Mumbai remains the country’s largest data centre hub, driven by strong global connectivity and infrastructure advantages. At the same time, Chennai serves as a key global data gateway, with multiple submarine cable landings that enable high-capacity, low-latency connectivity. Meanwhile, Hyderabad, Bengaluru, and Pune are emerging as important secondary hubs owing to robust IT ecosystems, ample land availability, and competitive operating costs.

City-wise Share of Operational Capacity

Note: *Others include Ahmedabad, Kochi, Mohali, Vijayawada, Jaipur, Nashik, Bhubaneshwar, Indore, Gandhinagar, and Raipur

Source: Vestian Research

While Mumbai and Chennai remain the primary hubs, data centre operators are increasingly exploring Tier-II cities to support distributed digital infrastructure. Cities such as Ahmedabad, Kochi, Jaipur, and Visakhapatnam are gaining traction due to competitive land availability, improving digital infrastructure, supportive state government policies, and growing enterprise demand. Operational capacity in Tier-II markets is currently estimated at 60–80 MW and is expected to exceed 100 MW by the end of 2026.

India’s data centre market is expected to witness sustained expansion over the next decade as digital transformation accelerates across industries. Installed capacity is projected to reach 1.7–2.0 GW by the end of 2026, backed by nearly USD 30 Bn in investments. This number is further expected to go up to 4–5 GW by 2030. Rising AI adoption, increasing demand for cloud infrastructure, and the rapid growth of digital platforms are expected to drive the next wave of growth in India’s data centre market.

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