India’s data centre (DC) market has witnessed a remarkable surge, attracting more than $6.5 billion in investments through private equity, joint ventures, and acquisitions from 2014 to 2024, as per a report by real estate consultancy Anarock Capital.
This influx of capital comes at a time when the DC industry has experienced significant growth in capacity, increasing by 139 percent—from 590 megawatts (MW) in 2019 to 1.4 gigawatts (GW) in 2024.
Continued Growth with Strong Investment Interest
The report predicts that the sector will continue its growth, fueled by robust domestic and international investment interest. Increased access to project financing, following the recent recognition of data centres as an infrastructure asset, will further drive expansion. Ongoing and planned projects will raise the sector’s capacity to 2 GW by 2025 and 2.6 GW by 2026.
India’s DC industry, currently valued at $10 billion, is set to generate $1.2 billion in revenue in the financial year 2024. Shobhit Agarwal, Managing Director and CEO of Anarock Capital, states that the country’s top four data centre operators generate 78 percent of this revenue. While EBITDA growth plateaued after 2020, experts expect it to rise by 50-55 percent as ongoing projects stabilize.
Driving Factors: Internet Penetration and Mobile Data Growth
Devi Shankar, Executive Director of Industrial, Logistics, and Data Centres at Anarock Capital, attributed this growth to a sharp rise in internet penetration—from 33.4 percent in 2019 to 55.2 percent in 2024—and the near-doubling of monthly data consumption per user. Additionally, average mobile data traffic per smartphone has surged from 13 gigabytes (GB) to 32 GB.
“India now leads the world in average mobile data traffic per smartphone, which has significantly boosted demand for high-quality data centres,” Shankar noted.
The Rise of Edge Data Centres and AI-Driven Growth
Industry experts believe that emerging technologies like artificial intelligence (AI) and the rise of sustainable and edge data centres will drive the next phase of growth for the sector. Ankita Sahu, Senior Manager at Anarock Capital, highlighted the emergence of small, decentralised data centres located closer to end-users and devices in Tier-II and Tier-III cities. These edge data centres scale resource-intensive AI projects, enhance reliability, maximize bandwidth, and enable real-time processing.
Cities such as Jaipur, Ahmedabad, Kochi, Visakhapatnam, Lucknow, Patna, and Bhubaneswar are already seeing the development of these edge data centres, bringing computing power closer to consumers.
Regional Expansion and Strong Market Demand
While Mumbai and Chennai currently dominate India’s Data Centre market, accounting for nearly 70 percent of the nation’s total IT power capacity, other regions are showing significant growth. Mumbai and Chennai have seen an impressive supply increase of 92 percent and 340 percent, respectively, between 2022 and 2024. Noida, Bengaluru, Hyderabad, and Pune also represent key DC markets, with Noida contributing 9 percent, Bengaluru and Hyderabad each contributing 8 percent, and Pune contributing 4 percent of the total DC capacity.
The strong demand and efficient operations across these regions have led to an overall occupancy rate of 76 percent, further demonstrating the robustness of the market, according to the Anarock report.
