India’s data center market recorded an absorption of 407 megawatts (MW) of IT capacity in 2024 and is projected to add 600 MW in 2025, according to Savills India, as published by Money Control.
The surge is driven by cloud computing, artificial intelligence (AI), big data expansion, e-commerce, and digital transformation initiatives.
Mumbai dominated the absorption market with 53% of the total, followed by Hyderabad at 14%, and Chennai and Pune at 10% each. Over 200 acres of land were acquired across Mumbai, Hyderabad, Pune, Chennai, and Bengaluru to meet growing demand.
The operational capacity of data centers in India stood at 1,110 MW in 2024. Projections indicate a compound annual growth rate (CAGR) of 21% between 2024 and 2030, potentially reaching 3,400 MW by 2030.
“The current momentum positions India as a promising global data center hub,” said Srihari Srinivasan, director and lead of data center services at Savills India. “We project over 450 MW of IT capacity demand and 600 MW supply addition in 2025.”
The rising demand is primarily driven by hyperscalers, banking, financial services, and insurance (BFSI), IT and ITeS, and service sectors, all of which depend on data center operators for colocation and related services.
Tier 2 and 3 cities are witnessing a surge in demand for edge data centers, which are smaller facilities that reduce latency and improve application performance. These cities accounted for 8% of total absorption in 2024, a figure expected to grow significantly by 2030. Currently, they have a total capacity of 3 MW, which is forecasted to reach 109 MW by the end of the decade.
Srinivasan noted that the growing penetration of 5G technology and mobile applications in cities such as Bhubaneswar, Patna, Lucknow, Jaipur, Kochi, Vizag, Coimbatore, Madurai, Raipur, and Hubli is fueling this demand.
Surajit Chatterjee, managing director of data centers at CapitaLand Investment India, emphasized the transformative phase of India’s data center ecosystem. He highlighted the role of hyperscalers, BFSI enterprises, and AI-driven workloads in reshaping the market.
“Energy efficiency and sustainability are now paramount. Future investments must prioritize scalability, resilience, and long-term sustainability to ensure India’s digital infrastructure remains robust and future-ready,” Chatterjee said.
The market has also seen a surge in data center land transactions, with hyperscalers and operators acquiring significant land parcels in key cities. This acquisition trend aligns with the sector’s expansion plans to meet the projected rise in demand.
With robust growth projections and increasing investments, India is poised to become a significant player in the global data center landscape by 2030.