India’s data centre industry is set to continue on its explosive growth trajectory, driven by the dual forces of artificial intelligence (AI) and 5G technology. According to a report by JLL India, the sector is expected to add 604 MW of capacity between the second half of 2024 and 2026, expanding its total capacity from 917 MW to 1,521 MW.
Industry experts mention that this expansion will require an investment of USD 3.8 billion and approximately 7.3 million square feet of real estate. Mumbai is expected to maintain its leadership position, while Navi Mumbai emerges as a key hub, with projected demand reaching 800 MW in the coming years. Other regions, including Chennai, are also anticipated to witness substantial growth as operators expand into new territories.
India’s data centre capacity has already grown 2.5 times over the past four and a half years, achieving an impressive 24 per cent compound annual growth rate (CAGR). Tight occupancy rates, with 873 MW of the existing 917 MW capacity utilised as of mid-2024, reflect strong market demand.
The rollout of AI-ready infrastructure and the government’s approval of a USD 1.24 billion investment in AI have further fueled the sector’s rapid expansion. The transformative impact of 5G, which reached over 90 per cent of India’s population by the end of 2023, has also accelerated this growth by driving demand for high-speed, low-latency data storage.
Industry leaders attribute this momentum to the growing adoption of hyperscale data centres and AI-powered applications. Hyperscalers are increasingly building large-scale projects, while operators develop AI-specific campuses equipped with advanced power infrastructure. Navi Mumbai is quickly establishing itself as a critical location for these developments due to its robust connectivity and infrastructure.
The expansion is expected to generate significant economic benefits, including job creation and innovation across related industries. As specialised skills in engineering, cloud computing, and AI become increasingly essential, the sector is likely to contribute to India’s broader digital transformation.
“The future expansion of DC industry till 2026 will require approximately 7.3 million sq. ft of real estate and a capital investment of USD 3.8 billion. Mumbai is expected to maintain its market leadership, while we anticipate significant growth in Chennai and other regions. This expansion is not only driving demand for specialized skills but also creating opportunities across backward-linked industries,” said Dr Samantak Das, Chief Economist and Head of Research & REIS, India, JLL.
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