India’s data centre (DC) industry has experienced remarkable transformation over the past decade, with a staggering $6.5 billion in investments via private equity, joint ventures, and acquisitions between 2014 and 2024, according to a recent ANAROCK report. In this period, the industry’s capacity has skyrocketed by 139%, growing from 590 MW in 2019 to an impressive 1.4 GW in 2024, reflecting the surging demand for data infrastructure driven by the country’s digital boom.
The Shift in Data Consumption and Connectivity: A key driver of this growth has been the rapid increase in internet penetration and mobile data consumption. Internet penetration in India has nearly doubled from 33.4% in 2019 to 55.2% in 2024, while data consumption per user has surged from 11.5 GB to 21.1 GB per month. This surge in digital engagement has placed India at the forefront of global mobile data traffic, with Indian smartphones now leading in average traffic per user. These factors have contributed to the booming demand for high-performance data centres across the country.
The Dominance of Key Cities: The data centre market in India remains concentrated in two cities: Mumbai and Chennai, which together account for 70% of the nation’s total IT power capacity. Mumbai alone contributes nearly half of this capacity (49%), with both cities experiencing extraordinary supply growth in recent years—Mumbai seeing a 92% increase from 2022 to 2024, and Chennai recording a staggering 340% increase. Other cities such as Noida, Bangalore, and Hyderabad are also significant contributors, though they remain secondary in terms of total capacity. Together, these markets reflect strong absorption, with an overall occupancy rate of 76%, signalling continued market efficiency and a high demand for data centre services.
Land Acquisition and Investment Trends: India has become a prime location for hyperscale’s—the companies building large-scale data centres to cater to vast digital ecosystems. Over the past five years, approximately 440 acres of land have been acquired for hyperscale’s in key cities like Hyderabad (69%), Mumbai (22%), and Pune (9%), highlighting the country’s appeal as a hub for data infrastructure development. Financially, India’s DC industry is now valued at approximately $10 billion, with $1.2 billion in revenue projected for FY 2024. Major operators dominate the market, generating 78% of the industry’s revenue. While growth in EBITDA slowed post-2020, a robust 50-55% increase is anticipated as new projects reach operational stability. The capital deployment trend has been aggressive, with $4.2 billion invested between 2022 and 2024, fuelling ongoing expansion.
Looking Ahead: The Future of India’s Data Centres AI and Advanced Technologies: Artificial Intelligence (AI) is expected to drive the next wave of demand for data centres. To support AI workloads, data centres will need to adopt next-gen technologies like liquid cooling, high-density racks, and floor-loads capable of handling heavier equipment. Edge Data Centres in Tier II and III Cities: As demand for real-time, latency-sensitive applications increases, edge data centres are emerging in smaller cities like Jaipur, Ahmedabad, Kochi, and Lucknow. These decentralized facilities will improve data accessibility and processing power, enabling better performance for AI and other next-gen applications. Sustainability and Green Data Centres: As environmental concerns take centre stage, energy-efficient designs and renewable energy sourcing are becoming vital. Green data centres, which focus on sustainable practices, are set to become a key component of industry development moving forward.
Devi Shankar, Executive Director – Industrial, Logistics & Data Centres at ANAROCK Capital, speaking to a Marksmen Daily correspondent, explains, “This growth is fuelled by a substantial increase in internet penetration, which has risen from 33.4% in 2019 to 55.2% in 2024. Moreover, data consumption per user has nearly doubled, from 11.5 GB to 21.1 GB per month, while average smartphone traffic has surged from 13 GB to 32 GB. India now leads the world in mobile data traffic per smartphone, which is a significant driver of the demand for high-performance data centres. The country’s growing digital engagement is a clear indicator of the future demand in this sector.”
