India’s data centre sector is on the brink of a massive transformation, with investments projected to reach ₹1.6 trillion over the next five years. This unprecedented capital influx is expected to nearly double the country’s total data centre (DC) capacity from 1.3 GW in FY25 to 2.4 GW by FY28, positioning India as a major global hub for digital infrastructure.
The surge is fueled by the rapid adoption of artificial intelligence (AI), cloud computing, and increased digital consumption across both retail and enterprise sectors. Public sector digitisation and supportive state policies, like Maharashtra’s green data centre parks, are attracting multinational IT majors and incentivizing sustainable infrastructure.
The expansion of 5G networks is driving exponential growth in data consumption, necessitating advanced and scalable data centre solutions.
Developers have announced a staggering 7.1 GW of planned data centre capacity. Currently, 1.3 GW is under construction and 1.6 GW is in the planning stage, with nearly 60% of the pipeline at an early stage. Annual capacity additions are set to accelerate to 300–350 MW per year during FY26–FY28, compared to 150–250 MW per year in the previous period.
Building a data centre in India costs between ₹50 crore and ₹70 crore per IT MW, excluding land and cloud-related expenses. About 20% of this is allocated to real estate, while the rest covers mechanical, electrical, and plumbing systems. Capital expenditure inflation has ranged from 5–10% CAGR over FY21–FY25, managed through contingency planning and long-term execution timelines.
Demand for data centre capacity is expected to keep pace with supply, ensuring stable to moderate growth in occupancy rates and rental yields. The need for AI-ready data centres is pushing investments in high-performance servers, advanced cooling, and energy-efficient designs, transforming India into a key player in the global AI data centre market.
India’s growing data centre ecosystem is set to attract global clients, foster innovation, and support the country’s digital transformation agenda.
