India data centre capacity to jump 30% in 2026; 500 MW supply boost expected: CBRE report

India's data centre sector is poised for significant expansion, with projections indicating a 30% increase in total capacity across major cities in 2026. This growth is fueled by an anticipated addition of 500 MW in supply, as reported by CBRE Group. This expansion follows a record-breaking 2025, where India's data centre capacity surpassed 1,700 MW, thanks to a remarkable supply increase of 440 MW, which represented a 160% rise from the previous year. Anshuman Magazine, Chairman & CEO for CBRE India, South-East Asia, Middle East & Africa, emphasized that the narrative around data centres in India has shifted from potential to large-scale execution. He noted that the sector's resilience and promising returns are attracting considerable foreign investment. "This interest is bolstered by a strong regulatory framework that enhances transparency and facilitates credit access," he added. This institutional support is expected to drive significant growth, positioning India as a leading player in the rapidly evolving Asia-Pacific data centre market. Investment momentum in this sector is intensifying, with data centre investments reaching $56.4 billion in 2025, accumulating to a total of $126 billion in commitments. Looking ahead, this figure is projected to increase by approximately 45% year-on-year, surpassing $180 billion in 2026. Data centres are now regarded as a mainstream asset class, drawing substantial institutional capital and ranking high among preferred investment sectors in the Asia-Pacific region. While states like Telangana, Maharashtra, Tamil Nadu, Andhra Pradesh, and Uttar Pradesh are anticipated to lead in investments, there is a growing interest in tier-II cities as well. Cities such as Ahmedabad, Visakhapatnam, Patna, and Bhopal are emerging as attractive markets due to the demand for reduced latency, the rollout of 5G, and data localization requirements. Nevertheless, Mumbai remains a key player, accounting for over 50% of India's operational data centre inventory by the end of 2025, along with Chennai, Delhi-NCR, and Bengaluru, which collectively represent nearly 90% of tier-I capacity. As the sector grows, energy demands are becoming increasingly crucial. Ram Chandnani, Managing Director of Leasing at CBRE India, pointed out that the rapid scaling of AI and cloud infrastructure is exerting unprecedented pressure on power grids in high-density data centre hubs. To address this, renewable energy procurement has become a fundamental strategy for balancing sustainability and long-term energy security. In 2025, India achieved a record addition of 44.5 GW of renewable energy capacity, nearly doubling the previous year's figures, highlighting the sector's shift toward green energy solutions.