India’s data centre market is witnessing unprecedented growth, with the first half of 2025 seeing 162 MW of new IT capacity added and 212 MW absorbed—underscoring strong demand across core digital hubs. Mumbai and Chennai led both supply and absorption metrics, reflecting sustained interest from hyperscale operators and large enterprises.
Mumbai alone accounted for 61% of the total IT capacity absorbed in H1 2025, followed by Chennai at 26%. Supply trends mirrored this, with Mumbai contributing nearly half of all additions. Bengaluru trailed at a distant third but remained active in deployment.
This expansion comes amid a rapid transformation in digital infrastructure needs, driven by cloud computing, AI integration, mobile data growth, and the rollout of 5G services across the country.
Tier-II cities gaining ground as decentralization takes hold
While the top three metros continue to dominate, Tier-II cities are emerging as important contributors. In the current cycle, cities like Patna, Coimbatore, Bhubaneswar, and Lucknow made up 8% of total absorption. This share is expected to rise significantly, with projections showing Tier-II regions accounting for over 20% of supply and absorption by 2030.
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The shift reflects a strategic decentralization of digital infrastructure, supported by state-level incentives and the need to reduce latency for edge computing workloads. These locations are also becoming attractive to enterprises seeking cost-effective expansion options.
Long-term growth outlook driven by policy and global investment
According to estimates, India’s total IT capacity is expected to quadruple and hit 4 GW by 2030, growing at a compound annual rate of 23%. Annual supply additions are projected to nearly double, reaching 350–450 MW between 2025 and 2030.
Kolkata is forecasted to lead future growth with a 48% CAGR, followed by Hyderabad and Ahmedabad. Meanwhile, established markets like Mumbai and Chennai will continue to expand steadily, powered by strong cable landing infrastructure and enterprise demand.
The data centre boom is further catalyzed by policy support from central and state governments, along with rising interest from global investors. Together, these factors are positioning India as a leading destination for hyperscale and colocation infrastructure across Asia.
