India's data centre industry has reached substantial scale with total inventory standing at 1,123 MW of IT load capacity as of H1 2025, reflecting the sector's maturation into a critical digital infrastructure backbone.

The market demonstrated exceptional absorption momentum during the first half of 2025, recording 97.9 MW of net take-up, representing a robust 48% year-on-year growth that underscores surging demand from hyperscale cloud providers, BFSI sector digitalization, and AI workload requirements.

Despite this strong demand, the industry maintains remarkably tight supply conditions with vacancy rates compressed to just 4.3%, down from historical levels and signaling a supply-constrained environment that favors operators through sustained occupancy.

Mumbai continues its reign as India's data centre capital, commanding a commanding 54% share of total industry capacity. The city's strategic advantages—including robust fiber connectivity, established business ecosystems, and proximity to international cable landing stations—reinforce its position as the preferred location for hyperscale deployments and enterprise colocation requirements.

Looking forward, the industry projects strong growth with total capacity expected to reach 2,073 MW by 2027's end, representing an 85% increase from current levels. This expansion will require approximately 10.7 million square feet of real estate and an estimated USD 6.3 billion in capital investments, highlighting the sector's substantial infrastructure development requirements.

Several transformative trends are reshaping India's data centre ecosystem. The emergence of domestic cloud service providers offers compelling alternatives to international hyperscalers, providing cost-effective solutions with enhanced regulatory compliance and localized support capabilities.

Edge computing represents another significant growth vector, with capacity expected to double from the current 80-100 MW to 160-180 MW by 2028. This expansion addresses critical low-latency requirements for applications ranging from social media and e-commerce to industrial IoT implementations.

Neo cloud providers are democratizing access to AI infrastructure, offering GPU-as-a-Service solutions that enable startups and enterprises to leverage high-performance computing without substantial capital commitments.

Recent regulatory developments further strengthen the sector's growth prospects. The Supreme Court's August 2025 ruling streamlining environmental approvals for projects exceeding 20,000 square meters through State Environment Impact Assessment Authority processes promises to accelerate project timelines.

India's data centre market stands at an inflection point, where robust fundamentals, emerging technologies, and supportive regulatory frameworks converge to create exceptional growth opportunities for stakeholders across the digital infrastructure value chain.