Indian data centre investments to exceed $100B by 2027

Cumulative investment commitments in Indian data centres are likely to surpass $100 billion by the end of 2027, according to a report by CBRE, a real estate advisory firm. Between 2019 and 2024, India attracted investment commitments of $60.3 billion from both domestic and international investors.

The report stated that India’s data centre capacity is projected to reach approximately 2,070 megawatts (MW) by the end of 2025. The current data centre capacity stands at around 1,255 MW, with nearly 475 MW of capacity under construction across Mumbai, Chennai, and the Delhi-National Capital Region (NCR).

Further, in 2024 so far, about $19 billion of investments have been committed. Maharashtra, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal emerged as the leading states in terms of cumulative investment commitments. The year may end with India’s data centre capacity being expanded to 1,600 MW.

Mumbai continues to dominate data centre stock, followed by Chennai, Delhi-NCR, and Bengaluru, accounting for 90 per cent of the country’s total data centre stock as of September 2024, the report said.

Currently, India’s total data centre stock stands at about 19 million square feet (msf) of land area, which is expected to reach 31 msf by the end of 2025. Key demand drivers for the year ahead include banking, financial services, and insurance (BFSI) and technology companies.

Anshuman Magazine, chairman and chief executive officer, India, South-East Asia, Middle East, and Africa, CBRE, believes that the demand from the BFSI, technology, and telecommunications sectors, combined with state-level policy incentives, will continue to fuel this growth, making India one of the most attractive destinations for data centre operators in the coming years.

States including Maharashtra, Telangana, and Tamil Nadu have released state-specific incentives while deeming data centres as ‘essential services’.

Additionally, expansion into tier-II cities like Ahmedabad, Kochi, Visakhapatnam, and Lucknow amid regional data consumption growth, cost-efficiency advantages, sustainability, and demand for artificial intelligence (AI)-driven technologies were some of the industry trends highlighted by the report. Business Standard