India’s data centre capacity set to reach 2 GW by 2026, backed by $30 billion in investments: Report

India is quickly establishing itself as a key player in the data centre industry within the Asia-Pacific region, fueled by a rapidly growing digital economy, an increasing number of internet users, and substantial investments from major operators. A recent report by Vestian, a Chicago-based firm specializing in workplace solutions, forecasts that the nation’s data centre capacity will reach between 1.7 and 2.0 GW by the close of 2026, supported by nearly $30 billion in investments. Currently, India is home to 164 data centres, trailing behind countries like Italy, Mexico, and Brazil. The United States leads the global data centre market with over 5,000 facilities. Vestian’s report indicates that India’s data centre market, valued at around $10 billion in 2025, is expected to more than double to $22 billion by 2030, showcasing a robust growth path and increasing investor confidence. Worldwide, the data centre market is experiencing considerable growth, with an estimated current capacity of 40 to 50 GW, projected to exceed 100 GW by 2030. This expansion is primarily driven by the rising adoption of cloud computing, artificial intelligence, and other data-intensive technologies. In India, this surge is largely attributed to a notable increase in internet and telecom subscribers, greater enterprise cloud utilization, expanding AI applications, and a shift in consumer habits towards digital transactions and streaming services. The construction pipeline for data centres in India remains strong, with over 700 MW already under development and an additional 1 to 2 GW in the planning phase. In total, the country is expected to add between 2 and 3 GW over the next five to seven years, indicating a sustained demand for data centre infrastructure. The advent of 5G technology has further intensified data consumption, with average monthly wireless usage surpassing 25 GB per user, underscoring the need for scalable data centre solutions. Shrinivas Rao, CEO of Vestian, remarked, "India's data centre sector is rapidly evolving, supported by robust policy measures and an escalating demand for digital services. Although the country holds a modest share of global capacity, it possesses immense potential to become a leader in AI infrastructure. With streamlined clearances, extended tax benefits, and incentives lasting until 2047, India is strategically poised to emerge as a global hub for data centres and AI." The sector has captured significant investor attention, attracting roughly $13 to $15 billion in investments between 2020 and 2024, with foreign institutional investors contributing nearly 80% of the total capital inflows. The project pipeline remains promising, with announced investments projected at $60 to $70 billion over the next five years, predominantly driven by hyperscale platforms and partnerships. India also enjoys a cost advantage, with data centre construction expenses ranging from $6 to $7 million per MW—substantially lower than in more developed APAC markets like Singapore and Japan. This cost-effectiveness enhances India's attractiveness for large-scale investments. Geographically, data centre capacity is concentrated in major metropolitan areas, with Mumbai accounting for 49% of the market share due to its robust global connectivity and infrastructure. Chennai is next, holding an 18% share, bolstered by multiple submarine cable landings that facilitate high-capacity, low-latency connectivity. Emerging secondary hubs include Hyderabad, Bengaluru, and Pune, supported by strong IT ecosystems and competitive operational costs. Additionally, Tier-II cities such as Ahmedabad, Kochi, Jaipur, and Visakhapatnam are gaining momentum, driven by better land availability, improving digital infrastructure, and supportive local policies. Operational capacity in these regions is currently estimated at 60 to 80 MW, expected to surpass 100 MW by 2026. Overall, India’s data centre market is on track for sustained growth over the coming decade as digital transformation accelerates across various industries.