Communicate To Collaborate
14 in India

India Set to Lead Asia-Pacific in Data Centre Capacity by 2026

1 month ago
Asia-Pacific in Data Centre


India’s data centre (DC) capacity is projected to exceed 1,800 megawatts (MW) by the end of 2026, with an additional 850 MW expected to be added during 2024-26, according to a report by real estate consultancy CBRE South Asia.

This positions India as a dominant player in the Asia-Pacific region, excluding China, for DC capacity.


Leading the Region in Data Centre Capacity

Currently, India boasts the highest DC capacity in the Asia-Pacific region, excluding China, with approximately 950 MW.

“After India, Japan recorded the second-highest DC capacity with 892 MW, followed by Australia at 773 MW, Singapore at 718 MW, Hong Kong at 613 MW, and South Korea at 531 MW,” the report noted.

The sector has attracted significant investments from global operators, real estate developers, and private equity funds eager to capitalize on India’s thriving market.


Significant Investments Fuel Growth

Between 2018 and 2023, India’s data centre industry attracted investment commitments exceeding $40 billion from both global and domestic investors. Maharashtra, Uttar Pradesh, West Bengal, and Tamil Nadu emerged as top states attracting cumulative investment commitments.

Moreover, global hyperscalers are increasingly eyeing New Delhi as a prime market for expansion, with many opting for customized build-to-suit (BTS) facilities.

Amit Sarin, Managing Director of Anant Raj Limited, announced plans to invest over Rs 10,000 crores to develop a 307 MW data centre across three locations in Manesar, Rai, and Panchkula.


Expansion Beyond Major Hubs

While Mumbai and Chennai account for about 68% of India’s total DC stock, several Tier 2 cities such as Kochi, Jaipur, Ahmedabad, Lucknow, Patna, and Visakhapatnam are emerging as new DC markets.

In 2023, the addition of 255 MW of new supply resulted in a total stock of approximately 1,030 MW by the year-end. This rapid growth is expected to continue in 2024, with planned supply exceeding 330 MW across various cities.


Attracting Multinational Corporations

Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East & Africa, CBRE, noted that India’s favorable market conditions are attracting multinational corporations (MNCs) seeking to expand their digital services and relocate from other Asian markets due to supply constraints.

“Sustained demand is expected from BFSI firms, technology corporations, and cloud service providers as they explore alternative solutions such as colocation and hyperscale facilities,” he added.


Focus on Hyperscale Facilities

India’s appeal to global hyperscalers for expansion is evident, with many opting for customized BTS facilities.

“In 2023, more than 85 percent of the $27 billion committed investment targeted the development of hyperscale facilities,” the report added.


Data Centre Floor Space

The total floor space stock for data centres in India reached 16 million square feet in 2023. Data centres remain among the top three preferred alternative assets for investors in the Asia-Pacific region, including India.

Global investors maintain a keen interest in the Indian data centre market, with many exploring partnerships and joint ventures with local operators.


M&A activity among operators is expected to rise in the coming years to address the growing number of players in the market.

As India continues to expand its data centre capacity, it is poised to become a crucial hub for digital services in the Asia-Pacific region, driven by significant investments and strong demand from various sectors.