Data centre industry to attract $4 bn in investments

India’s data centre industry is witnessing unprecedented growth driven by AI adoption, cloud storage, and 5G expansion. Projected to grow by 66% by 2026, it is attracting US$ 4 billion in investments and major global players like COLT DCS and Princeton Digital Group.

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India’s data centre industry is on a rapid growth trajectory, driven by the increasing adoption of artificial intelligence (AI), widespread use of cloud storage, and the accelerated rollout of 5G technology. This confluence of transformative technologies is fueling demand for robust, scalable, and secure digital infrastructure to support the country’s evolving digital ecosystem.

Amid this surge, data centres are emerging as a lucrative opportunity for global investors and developers. According to property consultancy JLL India, data centre capacity in the country is projected to increase by 66% by 2026, attracting investments of approximately US$ 4 billion and adding over 7.3 million sq ft in assets.

“India is rapidly establishing itself as a global centre for AI innovation and data centre growth. The DC (data centre) industry is expected to add a staggering 604 MW capacity in the next two and a half years (H2 2024-2026),” noted Rachit Mohan, APAC lead-data centre leasing at JLL. Navi Mumbai is emerging as a significant hub, with expected demand potentially reaching 800 MW in the coming years.

Industry leaders are actively investing to meet this demand. Earlier this week, COLT DCS formed an alliance with RMZ to develop digital infrastructure in India, committing US$ 1.7 billion. Additionally, Princeton Digital Group partnered with Mindspace Business Parks REIT to establish its largest Indian data centre campus at Mindspace Airoli West.

“Among the key markets, the Mumbai region is expected to maintain its market leadership, while we anticipate significant growth in Chennai and other regions,” said Samantak Das, JLL India’s chief economist. Submarine cable infrastructure linking India to global locations further enhances its appeal as a data centre destination. This growth is expected to drive innovation, generate employment, and strengthen digital infrastructure across the country.