From Mumbai to Bengaluru | Most preferred cities for data centre hubs in India

According to a report released by Avendus Capital, Mumbai currently accounts for approximately 50% of the total data centre capacity in India.

India's demands for AI-led infrastructure, especially in the cities considered as technological hubs, have exponentially grown across standards. This rise has given scope for financial advantages along with tech advancements.

Along with technological needs, particularly due to rising demand from cloud and AI workloads, data centres have taken a centre stage in requirements.

According to a report released by Avendus Capital, Mumbai currently accounts for approximately 50 per cent of the total data centre capacity in India. It also states that 47 per cent of the total additional capacity over the next five years is likely to be in the city.

Chennai follows Mumbai as the second-most preferred location in the country, as the region has benefits due to its strategic location. Hyderabad continues to develop as a major destination for colo and hyperscaler self-build projects.

Some of the other preferred cities include Bengaluru, Pune, Delhi - NCR and Kolkata.

The figures for the total capacity and the net absorption (in Megawatts (MW) as mentioned in the document include:

Mumbai

Total capacity: 801

Net absorption: 153

Chennai

Total capacity: 268

Net absorption: 49

Delhi - NCR

Total capacity: 161

Net absorption: 33

Hyderabad

Total capacity: 138

Net absorption: 40

Bengaluru

Total capacity: 119

Net absorption: 12

Pune

Total capacity: 111

Net absorption: 23

Kolkata

Total capacity: 17

Net absorption: 4

Demand powered by the need for AI infrastructure, with digital adoption and rising cloud is anticipated to almost triple the nation's built data centre capacity from 1.6 GW in 2025, to around 5 GW by the year 2030.

The report states that developers currently have an active pipeline of over 3 GW, including about 1 GW of AI data centre capacity, requiring a total capital investment of nearly $25 billion over the next five years.

Also, as India's Al market is projected to grow from $13 billion in 2025 to $131 billion by 2032 at a 39 per cent (CAGR), India’s data centre capacity is set to grow at a 26 per cent CAGR over the next five years.

Vaibhav Garg, the chief author of the report, stated, "AI adoption is emerging as a significant catalyst for next-generation infrastructure investments in data centres, alongside sustained demand from cloud and digital workloads," emphasising on the potential of India's DC hubs.