India’s data center capacity set to exceed 4,500 MW by 2030, driving $25 billion investment opportunity

The growth is being propelled by strong global connectivity through submarine cables, availability of cost-effective land and power, supportive government policies, and surging digital demand. Major data center operators are also committing to long-term investments and expanding their footprint across Tier II and III cities, it noted.

A data centre is a facility that organizations use to house their critical applications and data.

While Mumbai will continue to lead the DC market, emerging hubs such as Hyderabad, Bengaluru, and Pune are set to witness exponential growth in inventory. Hyderabad, in particular, is gaining strong traction and is poised to join the ranks of major data center destinations alongside Mumbai, Chennai, and Delhi-NCR, it said.

The report noted that at the city level, Mumbai continued to account for the majority of the DC capacity with 41% share, followed by Chennai and Delhi NCR at 23% and 14% respectively. This rapid expansion in capacity has resulted in over 3X times increase in real estate footprint over the last 6-7 years, across top seven DC markets of the country, taking it to 16 million sq ft as of April 2025.

“With a DC capacity of about 1,263 MW across the top seven markets, India’s data center industry has witnessed significant scaling up in the last few years. India is becoming a global DC hotspot, fueled by rapid digitalization, data localization norms and strong government support. As this growth trajectory continues, India’s DC capacity is likely to cross 4,500 MW in the next 5-6 years, translating into a real estate footprint of 55 million sq ft,” said  Jatin Shah, Chief Operating Officer, Colliers India.

“Undoubtedly, India’s strategic advantages such as availability of  land parcels, power supply for usage and availability of skilled talent, reinforces its position as one of the preferred destinations for data centers in the APAC region. Interestingly, the market is expanding beyond large-scale colocation facilities and hyperscalers to edge data centers driven by increasing need for lower latency, real-time analysis, enhanced app performance, and business agility,” he said.

Mumbai drove 44% of the DC capacity additions since 2020

On the supply front, India has witnessed 859 MW of capacity addition across the top seven primary DC markets since the beginning of 2020. 

In terms of geographical spread, 44% of the new supply since 2020 was concentrated in Mumbai. This was followed by Chennai and Delhi NCR which together accounted for 42% of the capacity addition from 2020, the report said.

DCs exceeding 50 MW to account for nearly two-thirds of the capacity by 2030

The rise in proportion of larger-sized DCs (>20 MW) from 42% during 2020 to 56% as of April 2025, indicates heightened traction in large hyperscale data centers, especially in recent years. About 44% of the new supply since 2020 was in the 21-50 MW category. Within the 21-50 MW category, Mumbai drove about three-fourths of the new supply additions. Interestingly, Chennai accounted for 45% of the new completions during the period in the more than 50 MW category, the report noted. 

Going ahead we estimate, DCs exceeding 50 MW capacity are likely to account for nearly two-thirds of the inventory by 2030, the report said.

DC industry to see investments worth $20-25 billion over the next 5-6 years

The DC industry has already seen investments to the tune of $14.7 billion since the beginning of 2020. These investments have been largely focused on land acquisition, project construction and development etc. In the next 5-6 years, amidst massive adoption of cloud computation and AI in India, DCs are likely to attract investments to the tune of $20-25 billion, it said.

“DC investments of about $20-25 billion are likely to materialize over the course of the next 5-6 years. Operators and developers will increasingly seek land-banking strategies and expand into growing markets with high data consumption levels. Moreover, investments in energy efficient and green certified DCs too will gain larger ground, as leading players increasingly imbibe sustainable practices. Green penetration in the industry is thus likely to increase from 25% currently, to 30-40% by 2030,” said Vimal Nadar, National Director and Head of Research, Colliers India.