India’s data centre (DC) industry is likely to attract USD 20–25 billion in investments over the next five to six years, on rising demand for cloud computation and AI, according to Colliers. In its latest report, “The Digital Backbone: Data Center Growth Prospects in India”, dated May 28, 2025, real estate consultant Colliers India mentioned that India’s data centre capacity stands at 1,263 MW as of April 2025 across seven major cities, and the capacity is likely to cross 4,500 MW by 2030.
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AI, IoT, and Cloud Fuel Demand Surge
“This growth is driven by the surge in demand for digital and cloud services, increasing adoption of Artificial Intelligence (AI) and Internet of Things (IoT), and higher internet penetration, supported by favorable government policies,” it said.
The existing data centre real estate footprint stands at 15.9 million sq ft, and this is expected to rise significantly, reaching about 55 million sq ft by 2030. Additionally, major DC operators are planning to expand their presence and are committing long-term investments across multiple Tier 2/3 cities.
“The scale-up in the Indian DC industry has been accompanied by equally impressive investments in the last 5-6 years. The industry has already seen investments to the tune of USD 14.7 billion since the beginning of 2020. These investments have been largely focused on land acquisition, project construction and development, etc,” the consultant said.
“In the next 5-6 years, amidst massive adoption of cloud computation and AI in India, DCs (data centres) are likely to attract investments to the tune of USD 20-25 billion,” it added.
Major Real Estate Growth in DC Infrastructure
Data pertains to co-location data centres in the top 7 cities – Bengaluru, Chennai, Delhi NCR, Hyderabad, Kolkata, Mumbai and Pune. Data centre capacity represents total IT load capacity, including occupied as well as unoccupied space.
“India is becoming a global DC hotspot, fuelled by rapid digitalisation, data localisation 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.
India’s strategic advantages, such as availability of land parcels, power supply for usage and availability of skilled talent, reinforce its position as one of the preferred destinations for data centres in the APAC region, he said.
“Interestingly, the market is expanding beyond large-scale colocation facilities and hyperscalers to edge data centres driven by increasing need for lower latency, real-time analysis, enhanced app performance, and business agility,” Shah added.
Mumbai Leads, Hyderabad Emerges as a Key Hub
India has witnessed 859 MW of capacity addition across the top seven primary DC markets since the beginning of 2020. While Mumbai will continue to dominate the overall DC market, relatively smaller growth markets such as Hyderabad, Bengaluru and Pune are likely to see multifold growth in inventory levels. Hyderabad, specifically, is likely to see significant traction and emerge as a major hub, in addition to cities such as Mumbai, Chennai and Delhi NCR, the report said.
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“DC investments of about USD 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,” said Vimal Nadar, National Director and Head of Research, Colliers India.
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