The demand for data centers in India is on an upward trajectory, spurred by factors such as the growing embrace of cloud technologies, the proliferation of big data, the Internet of Things (IoT), Artificial Intelligence (AI), and the swift advancement of e-commerce alongside digital transformation projects. In 2024, India recorded an absorption of 407 MW IT capacity and an addition of 191 MW IT capacity in significant urban areas, as noted by Savills India, a prominent global real estate advisory firm.
This demand has been driven by hyperscalers, the Banking, Financial Services, and Insurance (BFSI) sectors, as well as IT and ITeS enterprises, which rely extensively on data center operators for colocation and similar services. There is a burgeoning activity in data center land acquisitions in India, prompted by rising demand and expansions by data center operators and hyperscalers purchasing land across major cities. In 2024 alone, more than 200 acres of land were secured in Mumbai, Hyderabad, Pune, Chennai, and Bengaluru.
India is swiftly establishing itself as a global data center hub. The current momentum positions India as a promising contender in the global data center arena. We anticipate robust demand for data centers in India by 2025, projecting over 450 MW IT demand across major cities, with supply expected to expand to 600 MW IT during the same timeframe. The burgeoning reach of 5G and the escalation in mobile app usage are further fuelling demand for edge data centers in Tier-II and Tier-III cities such as Bhubaneswar, Patna, Lucknow, Jaipur, Kochi, Vizag, Coimbatore, Madurai, Raipur, and Hubli. At the same time, key Tier-I cities continue to experience growth. By 2030, we predict that data center inventory will rise to 3,400 MW IT across major cities.” – Srihari Srinivasan, Director & Lead Data Center Services, Savills India.
Data Center Supply and Absorption in 2024
Source: Savills India Research
Key insights:
- Mumbai dominated the absorption market with 53% of the total uptake, followed by Hyderabad (14%), and Chennai and Pune with 10% each.
- In 2024, data center operators and hyperscalers acquired over 200 acres of land.
- Supply and absorption were predominantly focused in Mumbai, Chennai, Hyderabad, and Pune.
- Growing demand for Edge data centers is emerging from Tier-II and Tier-III cities.
- The operational capacity reached 1,110 MW IT in 2024, representing a CAGR of 22% since 2014.
- Hyperscalers comprised 22% of total stock, enterprises held 10%, while the remaining 68% was shared among various operators.
Data Center Existing Capacity and Forecasts
Source: Savills India Research
