New Delhi

India's data centre industry is poised for an unprecedented phase of expansion, with the total development pipeline across major markets reaching 8.33 gigawatts (GW), according to a report by Knight Frank India. The planned capacity is more than five times the country's current operational data centre capacity of 1.6 GW, highlighting the growing demand for digital infrastructure driven by artificial intelligence (AI), cloud computing and data localisation requirements.

The report paints a picture of a rapidly evolving digital ecosystem, with global technology companies and investors making significant bets on India's future as a major data centre hub. Knight Frank India noted that the scale of projects in various stages of development reflects strong confidence in the country's long-term digital growth trajectory.

According to the report, India currently has 0.32 GW of data centre capacity under construction, while another 2.92 GW has reached the committed stage. In addition, 5.41 GW of capacity is in the early stages of development, accounting for nearly two-thirds of the overall pipeline.

"The significant share of early-stage developments demonstrates strong confidence in India's long-term digital economy prospects," Knight Frank India said in its assessment.

The surge in investment comes amid increasing adoption of AI technologies, growing demand for cloud services, expansion of digital businesses and stricter data localisation regulations that require companies to store and process data within India.

Mumbai Leads the Race

Mumbai continues to maintain its position as India's leading data centre market, with the largest development pipeline of 3.75 GW. This includes 0.17 GW under construction, 1.54 GW in committed projects and 2.21 GW in early-stage development.

Industry experts attribute Mumbai's dominance to several strategic advantages, including its status as India's financial capital, extensive fibre-optic connectivity, reliable power infrastructure and the presence of major international subsea cable landing stations. These factors make the city a preferred destination for hyperscale cloud providers and AI-focused infrastructure investments.

Hyderabad Emerges as a Key Hub

Hyderabad has emerged as the country's second-largest future data centre market, with a pipeline of 1.93 GW. The city has attracted substantial investments from global technology firms, aided by proactive state government policies, availability of land, competitive operating costs and robust infrastructure support.

The city's rise reflects a broader trend of technology companies diversifying beyond traditional hubs to establish large-scale digital infrastructure facilities in emerging markets.

Chennai Strengthens Strategic Position

Chennai has secured the third position with a development pipeline of 1.36 GW. The city plays a critical role in India's international data connectivity due to its extensive subsea cable network linking India with Southeast Asia and other global markets.

Its competitive power tariffs and established digital infrastructure ecosystem have further enhanced its attractiveness for data centre developers and investors.

Rise of Regional Specialisation

The report highlights a growing trend of regional specialisation within India's data centre ecosystem.

Viral Desai, International Partner and Senior Executive Director at Knight Frank India, said different cities are increasingly developing distinct strengths within the sector.

"India's data centre growth story is increasingly becoming a tale of regional specialisation. While Mumbai continues to anchor hyperscale deployments owing to its connectivity advantages, Hyderabad is emerging as a preferred AI infrastructure destination, and Chennai is strengthening its role as a strategic gateway for international data traffic from the east," Desai said.

He also pointed to the rapid emergence of Visakhapatnam (Vizag) as a promising greenfield market. According to Desai, the city has attracted gigawatt-scale development proposals due to strong government support, availability of large land parcels and plans for enhanced subsea cable connectivity.

Other Markets Expand Capacity

Apart from the three leading hubs, several other cities are witnessing significant growth in planned data centre infrastructure. The National Capital Region (NCR) has a pipeline of 0.54 GW, followed by Pune at 0.43 GW and Bengaluru at 0.18 GW.

These markets are expected to benefit from increasing enterprise demand, expanding digital services and investments in next-generation computing technologies.

A Decade of Growth Ahead

Industry observers believe India is entering a transformative period for digital infrastructure development. The rapid expansion of AI applications, rising internet usage, growth of digital payments and the increasing need for secure data storage are expected to fuel demand for data centres over the next decade.

Knight Frank India projects that the country's data centre ecosystem will remain among the fastest-growing globally, supported by sustained investments from international technology giants and domestic infrastructure developers.

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As India strengthens its position in the global digital economy, the massive pipeline of data centre projects underscores the country's growing importance as a destination for cloud computing, AI infrastructure and data-driven innovation.