India's data centre market is witnessing a massive surge in investments, with over US$ 60 billion (Rs. 5,08,860 crore) in commitments made over the last six years. According to a report by CBRE South Asia, the total investments are projected to exceed US$ 100 billion (Rs. 8,48,100 crore) by FY27. This remarkable growth has been fueled by a combination of factors, including rising digital consumption, supportive government initiatives, and substantial investments from both domestic and international investors.

The data centre market in India has experienced significant growth from 2019 to 2024, driven largely by key sectors like banking, financial services, and insurance (BFSI), technology, and telecommunications. Maharashtra, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal have emerged as the leading states in terms of cumulative investments in data centres. With such substantial commitments, India's data centre capacity is expected to reach 2,070 MW by FY25, a notable increase from the current capacity of around 1,255 MW.

The key drivers behind the growth of the data centre market include an increase in digital transformation, greater internet penetration, and the rising demand for AI-driven data workloads. As India's digital landscape continues to expand, the need for robust data infrastructure has never been greater. Mumbai remains the dominant hub for data centres, followed closely by Chennai, Delhi-NCR, and Bengaluru—the four cities account for an impressive 90% of India's total data centre stock.

Government policies have played a pivotal role in nurturing this growth. The 2020 Draft Data Centre Policy and the 2023 Digital Personal Data Protection Act (DPDPA) have been instrumental in creating a conducive environment for data centre operators. The policy initiatives aim to bolster the country's position as a leading data hub, offering state-level incentives and facilitating the establishment of data centres across key regions.

CBRE India, led by Chairperson & CEO Mr. Anshuman Magazine, highlights the robust demand from various sectors as a key driver of this expansion. The BFSI, technology, and telecommunications sectors are particularly significant contributors to this demand. As the Indian economy embraces more digital services and cloud-based solutions, data centres will continue to play a crucial role in supporting these technological advancements.

In addition to the investments from global operators and real estate developers, state-level policy initiatives are expected to further propel growth in the sector. As AI-driven data workloads and cloud computing become more prevalent, the demand for reliable, scalable, and secure data storage will continue to grow exponentially, benefiting both local and international data centre operators.

The future of India's data centre market looks incredibly promising, with experts predicting that the sector will become one of the most attractive globally. With global digital transformation, the surge in internet usage, and the rise of data-heavy applications like AI, India is poised to lead the way in meeting the growing demand for data storage and processing.

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