India is witnessing a massive transformation in its digital infrastructure, with data centre emerging as the backbone of this change. Industry reports highlight that India’s data centre capacity is expected to grow by 66% by 2026, adding 604 MW, supported by investments worth $3.8 billion. The growth is driven by advancements in artificial intelligence (AI), 5G, and cloud computing.
Key Drivers of Growth
Technology Advancements: India’s widespread 5G coverage, now reaching over 90% of the population, is increasing demand for faster and more reliable data storage. AI-ready infrastructure is also fuelling the need for large-scale data centres.
Cost Advantage: Building data centre in India is significantly cheaper than in many other countries. At $6.8 million per MW, India’s costs are far below those in Australia ($9.17 million) or Japan ($12 million), making it an attractive choice for global tech companies.
Mumbai Leads the Way
Mumbai is at the centre of this data boom. By 2025, three major undersea cable projects are set to enhance its connectivity, strengthening its position as a regional hub. Navi Mumbai, with advanced infrastructure, is expected to demand 800 MW of capacity soon. While Mumbai leads, cities like Chennai, Delhi-NCR, and Hyderabad are also growing. Chennai, with its port connectivity, is becoming a hub for industries like banking and finance.
Private Investments
Private firms are heavily investing in India’s data centre sector. For example, STT GDC’s Navi Mumbai campus will add 120 MW by 2026, while RMZ Infrastructure plans to develop 250 MW capacity with a $1.7 billion investment across multiple cities. This expansion is creating jobs in fields like engineering and cloud computing, boosting AI innovation, and supporting India’s digital transformation.
“India’s data centre capacity is on a remarkable trajectory, projected to grow by 66% by 2026, driving $3.8 billion in investments. This growth positions India as a key player in the Asia-Pacific data centre ecosystem,” said P.S. Lee, Director of CERT.
