Other BriefingsIndia’s Data Center Industry: Poised for a 66 percent Surge by 2026
India’s data center industry is on a growth trajectory, propelled by advancements in artificial intelligence (AI) and the nationwide rollout of 5G technology. According to a recently published report, the country’s financial hub, Mumbai, is expected to lead in the number of data centers countrywide.
India’s data center industry is anticipated to experience significant growth, driven by the rapid adoption of cloud computing and the increasing demand for data storage across tech-enabled industries. With global technology giants and domestic players ramping up investments, India is steadily emerging as a key hub for data infrastructure in the Asia-Pacific region.
A report by real estate consultancy JLL India projects a 66 percent increase in the country’s data center capacity, with an additional 604 MW to be added between the second half of 2024 and 2026. This expansion will boost India’s data center industry’s total capacity from 917 MW to 1,521 MW.
Such a jump in growth underlines India’s potential to become a digital powerhouse, catering to the ever-growing data needs of its population and global markets.
Investment and real estate requirements
The data center industry’s projected growth in India will demand an investment of US$3.8 billion and approximately 7.3 million square feet of real estate. Mumbai (capital of Maharashtra state and the country’s financial center) is expected to retain its leadership as a data center hub, with Navi Mumbai emerging as a prime location due to its robust connectivity and infrastructure. The demand in Navi Mumbai alone is forecast to reach 800 MW in the near future, while other regions, such as Chennai (capital of Tamil Nadu state), anticipate significant growth as well.
Capacity growth and data center market dynamics
India’s data center capacity has already expanded 2.5 times over the past four and a half years, achieving an impressive 24 percent compound annual growth rate (CAGR). As of mid-2024, 873 MW of the 917 MW capacity was in use, highlighting strong demand and competitive market conditions.
The rapid adoption of AI-ready infrastructure and the government’s approval of a US$1.24 billion AI investment have further fueled this expansion. Additionally, the rollout of 5G technology, covering over 90 percent of India’s population by late 2023, has driven demand for high-speed, low-latency data storage solutions.
The growth of hyperscale data centers and AI-powered applications is a key factor in the industry’s momentum. Operators are increasingly developing large-scale projects and AI-specific campuses equipped with advanced power systems, such as 400 kVA lines to support AI clusters. Navi Mumbai’s infrastructure development has become a focal point for such developments.
Economic and technological impact
The data center industry expansion is expected to create significant economic benefits, including:
- Job creation across engineering, cloud computing, and AI sectors.
- Innovation in backward-linked industries, contributing to India’s broader digital transformation.
- Establishing India as a global leader in AI innovation and data center growth.
Pan-India data center expansion: Private players lead the charge
India is witnessing rapid growth in its digital infrastructure as private enterprises invest heavily to meet the rising demand for data-intensive technologies like cloud computing and artificial intelligence.
For instance, STT GDC, an Asia-Pacific data center operator, is spearheading efforts with the construction of two new data center facilities in Navi Mumbai, India—STT Navi Mumbai 2 and STT Navi Mumbai 3. These centers, forming part of an 11.5-acre campus, are reportedly set to become operational by 2026, with each facility offering a 40MW capacity. The campus will also include STT Navi Mumbai 1, another advanced center currently under development, designed with air-cooled systems to support high-density computing needs.
Currently, STT GDC operates 28 data centers across 10 cities in India, with a combined capacity exceeding 318MW. To further strengthen its presence, the company has announced a US$3.2 billion investment to nearly triple its capacity by adding 550MW over the next five to six years.
Similarly, real estate company RMZ Infrastructure has partnered with Colt DCS, a global data center company, to establish a foothold in India’s burgeoning data center industry. The collaboration involves a US$1.7 billion investment to develop 250MW of data center capacity in Navi Mumbai, Chennai, and an additional planned location.
The facilities are reportedly designed to serve hyperscale cloud providers and industries like banking, finance, and media, aligning with India’s growing demand for scalable and reliable digital infrastructure.
Key takeaways
- 66 percent growth in capacity by 2026, requiring US$3.8 billion investment.
- Hyperscalers driving self-build projects in key hubs like Navi Mumbai and Chennai.
- The data center expansion aligns with India’s ambition to lead in AI and digital transformation.
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