India’s data center industry has secured over $6.5 billion in investments between 2014 and 2024 through private equity, joint ventures, and acquisitions, according to a report by ANAROCK Capital published by Moneycontrol.
The report, titled India Data Center Market: Growth, Trends & Outlook, estimates the industry’s current value at $10 billion, with revenue of approximately $1.2 billion generated in fiscal year 2023-24. The sector has experienced exponential growth in recent years, with total capacity rising 139% from 590 megawatts (MW) in 2019 to 1.4 gigawatts (GW) in 2024.
Mumbai and Chennai lead the data center market, accounting for 70% of India’s total IT power capacity. Mumbai alone contributes nearly half, at 49%. Between 2022 and 2024, data center supply surged by 92% in Mumbai and an unprecedented 340% in Chennai.
Other key data center hubs include Noida (9%), Bengaluru (8%), Pune (5%), and Hyderabad (4%). Combined, these cities have maintained an overall occupancy rate of 76%, reflecting strong market absorption and operational efficiency.
Hyperscale data centers, which provide large-scale cloud computing and storage infrastructure, have driven major land acquisitions over the past five years. Hyderabad leads in land acquisitions for hyperscalers, securing 69% of the total 440 acres, followed by Mumbai (22%) and Pune (9%).
Capital deployment has intensified between 2022 and 2024, with $4.2 billion invested as of fiscal year 2024. The total capital allocation—including fixed assets and working capital—stood at $2.6 billion in equity and $2.4 billion in debt as of March 2024.
“Investor sentiment remains strong, with aggressive expansion strategies in play,” said Shobhit Agarwal, managing director and CEO of ANAROCK Capital.
The report also noted that 78% of total revenue in the sector is generated by four major data center operators. While EBITDA growth slowed after 2020, it is expected to increase by 50-55% as under-construction projects become operational.
The surge in data center investments is fueled by rapid digital adoption. Internet penetration in India has risen from 33.4% in 2019 to 55.2% in 2024, while average monthly data consumption per user has nearly doubled from 11.5 gigabytes (GB) to 21.1 GB.
India now leads the world in mobile data traffic per smartphone, with usage soaring from 13 GB in 2019 to 32 GB in 2024. This increase has driven demand for high-grade data centers, said Devi Shankar, executive director of industrial, logistics, and data centers at ANAROCK Capital.
To enhance computing efficiency, edge data centers—smaller, decentralized facilities—are emerging in tier-II and tier-III cities. Locations such as Jaipur, Ahmedabad, Kochi, Visakhapatnam, Lucknow, Patna, and Bhubaneswar are seeing increased data infrastructure development, the report found.
With growing digital engagement, robust investment, and rising demand for cloud services, India’s data center market is poised for continued expansion.