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India's data centre sector is set for strong expansion, with the country expected to add 2-3 GW of capacity over the next 5-7 years, according to a report by Vestian, a global commercial real estate firm.
The report highlighted that this surge is supported by increasing AI adoption, expanding hyperscale cloud deployments, and sustained enterprise digital transformation and rising demand for digital infrastructure. It stated, "India's data centre market reached approximately USD 10 Bn in 2025 and is projected to reach USD 22 Bn by 2030". The report also mentioned that with over 700+ MW currently under construction and an additional 1-1.2 GW in the pipeline, the sector is witnessing a sustained development cycle. Installed capacity is projected to exceed 1.7-2.0 GW by end-2026 and further expand to 4-5 GW by 2030, backed by nearly USD 30 billion in cumulative investments. Mumbai continues to dominate the market, accounting for nearly half of the total operational capacity, supported by strong global connectivity and reliable power supply. Chennai and Delhi NCR serve as key hubs for enterprise, BFSI, and government workloads, while cities such as Hyderabad, Pune, and Bengaluru are emerging as important secondary markets. The report noted that the sector has attracted robust investments, with approximately USD 13-15 billion deployed between 2020 and 2024, with around 80 per cent participation from foreign institutional investors. Looking ahead, a strong investment pipeline of nearly USD 60-70 billion has been announced over the next five years, with joint venture platforms expected to drive hyperscale campus development. The growth is being driven by increasing adoption of artificial intelligence, expansion of hyperscale cloud infrastructure, and ongoing digital transformation across enterprises. Tight vacancy levels in mature markets such as Mumbai and Chennai are expected to push expansion into other Tier I and emerging Tier II cities. The report added that government support in improving regulatory approvals, water availability, and project execution timelines, along with increasing renewable energy integration, will further support long-term capacity expansion. So the report outlined that the sustained capital inflows, rapid AI adoption, and continued digital transformation are expected to drive multi-year growth, positioning India as a key digital infrastructure and AI compute hub in the Asia-Pacific region. (ANI)
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