India’s Data Centre Capacity More Than Doubled in 2025: Growth, Trends, and Future Outlook

India’s data centre industry witnessed an unprecedented surge in 2025, marking a historic milestone in the country’s digital infrastructure development. According to a recent industry report, India added 387 MW IT capacity in 2025, more than double the 191 MW IT added in 2024, registering a massive 103% year-on-year growth. This sharp expansion highlights India’s transformation into one of the world’s fastest-growing data centre markets.

With cloud computing, Artificial Intelligence (AI), 5G rollout, Internet of Things (IoT), and digital services driving demand, India is steadily positioning itself as a global hub for scalable and sustainable data centre investments.

What is MW IT Capacity in Data Centres?

“MW IT capacity” refers to the amount of electrical power, measured in megawatts, that a data centre can supply to its IT equipment such as servers, storage, and networking systems. It represents the real computing potential of a data centre, rather than just its physical size. Higher MW IT capacity means greater ability to process, store, and manage digital data.

India’s Data Centre Capacity Growth in 2025

The year 2025 emerged as a turning point for India’s digital infrastructure:

This expansion has taken India’s total operational data centre capacity to 1,520 MW IT, a remarkable achievement that signals strong investor confidence and rising enterprise adoption of cloud technologies.

Major Drivers of Data Centre Growth in India

Several structural and technological factors are driving India’s data centre boom:

1. Rising Cloud Adoption

Indian enterprises are rapidly migrating to cloud platforms for scalability, security, and cost efficiency. This is boosting demand for hyperscale data centres operated by global and domestic cloud service providers.

2. Artificial Intelligence Workloads

AI and machine learning applications require high-performance computing and massive data storage, significantly increasing demand for high-capacity data centres.

3. 5G Rollout

The nationwide expansion of 5G networks is increasing real-time data processing needs, pushing companies to invest in both hyperscale and edge data centres.

4. Internet of Things (IoT)

IoT devices generate enormous volumes of data that require local processing and low-latency infrastructure, further accelerating data centre demand.

5. Digital India Initiatives

Government policies promoting digital governance, data localization, fintech, and e-commerce are strengthening India’s digital backbone.

Top Data Centre Markets in India

India’s data centre development is currently concentrated in a few major metros:

Mumbai remains the largest data centre hub due to:

• Strong connectivity infrastructure

• Availability of undersea cable landing stations

• Mature ecosystem of cloud and IT services

Chennai has emerged as another strategic hub because of its undersea cable connectivity and stable power supply.

Together, Mumbai and Chennai account for nearly 70% of total data centre absorption in 2025.

Hyperscale Data Centres Dominate the Market

Hyperscale facilities continue to lead India’s data centre expansion. These are massive facilities built by:

• Global technology giants

• Domestic cloud service providers

• Institutional and infrastructure investors

At the same time:

• Enterprise colocation remains a stable demand segment.

• Edge data centres are emerging in Tier 2 and Tier 3 cities to meet low-latency requirements.

Emerging Data Centre Hubs in India

Beyond the major metros, several new markets are gaining importance:

Kolkata

• Projected CAGR: 48%

• Growth driven by favorable policies, strategic location, and connectivity.

Hyderabad

• Projected CAGR: 44%

• Supported by IT ecosystem, data-friendly policies, and affordable land costs.

Visakhapatnam

• Emerging as a future data centre hotspot due to:

  • Undersea cable connectivity

  • Lower operational costs

  • Strategic location on India’s east coast

These cities are strengthening India’s competitiveness in the global data centre market.

India’s Data Centre Market Outlook: 2030 and Beyond

The report projects that:

• India’s data centre market will triple to over 4 GW IT capacity by 2030

• The sector will grow at a CAGR of 23%

This makes India one of the fastest-growing data centre markets in the world, driven by:

• Digital transformation

• AI ecosystem development

• Cloud-first enterprise strategies

• Rapid urban digitization

Role of Tier 2 Cities and Edge Data Centres

With increasing mobile streaming, digital payments, online education, and real-time applications, data processing needs are shifting closer to end users. This is fueling:

• Growth of edge data centres

• Expansion of hyperscale demand into Tier 2 cities

• Reduced latency for 5G and IoT services

This trend decentralizes digital infrastructure and supports balanced regional development.

Strategic Importance for India

India’s growing data centre capacity supports several national objectives:

• Strengthening digital sovereignty

• Supporting AI and startup ecosystems

• Enhancing cybersecurity infrastructure

• Boosting foreign direct investment (FDI)

• Generating employment in IT and infrastructure sectors

• Positioning India as a global digital services hub

Conclusion

India’s data centre capacity more than doubling in 2025 reflects the country’s accelerating journey toward becoming a global digital powerhouse. With 387 MW IT capacity added, operational stock touching 1,520 MW IT, and a projected expansion to 4 GW IT by 2030, India is building the backbone required for the next generation of technologies like AI, 5G, and IoT.

As cloud adoption deepens and digital services expand across metros and emerging cities alike, India’s data centre industry is set to become one of the most critical pillars of its digital economy.