The demand for data centres in India continues to rise, driven by the increasing adoption of cloud computing, Artificial Intelligence (AI), the expansion of big data, and the rapid growth of e-commerce and digital transformation initiatives.
Data from Savills India showed that the country witnessed an absorption of 407 megawatt (MW) of IT capacity and the addition of a new 191 MW capacity across key cities in 2024.
MW IT capacity refers to load capacity in data centres, representing the power consumed by the IT equipment such as servers, storage, and networking devices within a data centre.
The market is likely to witness a total capacity addition of over 600 MW and absorption of over 450 MW IT in 2025.
Srihari Srinivasan, Director & Lead Data Centre Services, Savills India, said India is rapidly emerging as a global data centre market and the current momentum positions the country as a promising global data centre hub.
“We project a strong demand for data centres in India in 2025, with an estimated demand of over 450 MW IT capacity across major cities, while supply addition is expected to reach 600 MW IT capacity during the same period,” he said.
Projections show that the data centre stock is expected to grow at a CAGR of 21 percent between 2024 and 2030 to reach 3,400 MW of IT capacity by 2030. The operational capacity stood at 1,110 MW of IT capacity as of 2024.
Mumbai leads
Mumbai led the absorption market with 53 percent of total absorption, followed by Hyderabad at 14 percent, and Chennai and Pune at 10 percent each. Supply and absorption were predominantly concentrated in Mumbai, Chennai, Hyderabad, and Pune.
Experts said that the growing demand for data centres was fuelled by hyperscalers, BFSI (Banking, Financial Services, and Insurance), IT & ITeS, and service sectors, all of which heavily rely on data centre operators for colocation and related services.
The country is also experiencing a surge in data centre land transactions, which is driven by growing demand and expansions by data centre operators and hyperscalers (large data centres) that are acquiring land across key cities. Over 200 acres were acquired in the top five cities including Mumbai, Hyderabad, Pune, Chennai and Bengaluru in 2024, the data showed.
Tier 2 and 3 cities driving demand for edge data centres
The demand for edge data centres, which are smaller data centres, is emerging from Tier 2 and 3 cities.
Srinivasan said that the increasing 5G penetration and mobile application usage are driving demand for edge data centres in Tier 2 and 3 cities such as Bhubaneswar, Patna, Lucknow, Jaipur, Kochi, Vizag, Coimbatore, Madurai, Raipur, and Hubli.
Tier 2 and 3 cities had a share of around 8 percent in the total absorption in 2024, which is expected to go up significantly in future. Data showed that the existing data centre capacity in Tier 2 and 3 cities is only 3 MW, which is expected to reach 109 MW IT by 2030.
Surajit Chatterjee, Managing Director, Data Centre, India, CapitaLand Investment, said that India’s data centre ecosystem is undergoing a transformative phase and the market is poised to add substantial capacity in 2025, ushering in an era of advanced, high-density computing.
"Demand drivers such as BFSI enterprises, hyperscalers and AI-intensive workloads are reshaping the sector, making energy efficiency and sustainability paramount. To sustain this momentum, future investments must prioritise scalability, resilience and long-term sustainability—ensuring that India’s digital infrastructure remains robust and future-ready," he said.
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