India's data centre industry is experiencing an unprecedented transformation, with capacity projected to surge from 1.6 GW as of June 2026 to 6 GW by 2029, establishing the country as Asia’s fastest-growing digital infrastructure market, according to a report released by JLL India, a real estate consultancy firm.
The report said while Mumbai and Hyderabad will have majority of the supply, the growth is expected to be fueled by Artificial Intelligence (AI) workloads and hyperscale cloud deployments.
According to the report, the growth will require will require USD 110 billion in capital investments and create infrastructure capacity of multiple gigawatts across the country.
The report said that the sector demonstrated remarkable momentum in H1 2026 (January-June), recording 101 MW of absorption, exceeding the three-year H1 average by more than 20%. "Supply remained robust with 85 MW delivered during the period, primarily concentrated in Mumbai and Chennai. Accelerated pre-committed deliveries have driven vacancy levels to a record low of 2.8%, reflecting exceptional market fundamentals," the report said.
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The 4.4 GW supply pipeline through 2029 will be distributed strategically: Mumbai will capture 35% share (predominantly colocation), Hyderabad 24% (mixed self-build and colocation), Visakhapatnam 14%, and Chennai 9%. The expansion demands USD 4 billion for real estate construction, USD 18 billion for mechanical, electrical, and plumbing infrastructure, and USD 88 billion for IT equipment including servers and racks, the report said.
{{/usCountry}}The 4.4 GW supply pipeline through 2029 will be distributed strategically: Mumbai will capture 35% share (predominantly colocation), Hyderabad 24% (mixed self-build and colocation), Visakhapatnam 14%, and Chennai 9%. The expansion demands USD 4 billion for real estate construction, USD 18 billion for mechanical, electrical, and plumbing infrastructure, and USD 88 billion for IT equipment including servers and racks, the report said.
{{/usCountry}}“India's data centre landscape is undergoing a fundamental transformation unprecedented in scale and ambition. The convergence of landmark tax incentives with massive hyperscale investments for AI-driven infrastructure requirements positions India as a strategic global hub for digital innovation.” said Rachit Mohan, Managing Director, Data Centre Leasing, APAC, JLL.
“With 4.4 GW of new capacity requiring USD 110 billion in capital by 2030, we are witnessing the creation of an entirely new digital infrastructure ecosystem that will reshape India's technology landscape and drive economic growth for decades to come," said Mohan.
Hyperscalers driving growth
According to the report, global hyperscalers are fundamentally reshaping the market dynamics by committing to building nearly 30% of new capacity through self-build facilities. By 2029, hyperscale self-build is expected to deliver 1.4 GW, with major investments transforming locations like Hyderabad and Visakhapatnam into gigawatt-scale hubs alongside established markets like Mumbai and Chennai.
The report said that the India Union Budget 2026-27’s 20-year tax holiday for foreign cloud service providers, extending until March 31, 2047, has dramatically accelerated investment commitments. This policy has attracted over USD 50 billion in foreign capital commitments. The initiative positions India as a global hub for routing global AI and cloud services while de-risking long-term capital deployment.