India’s data center investment to exceed US$100 billion by 2027: CBRE

According to a CBRE report, investment commitments in the industry are expected to cross US$100 billion by the end of 2027, with demand for robust data center (DC) fueling expansion in India’s digital infrastructure.

India’s data center (DC) market is witnessing a surge in investment activity, with Maharashtra and Tamil Nadu emerging as the most preferred destinations.

India’s data center market has emerged as a magnet for global and domestic investors, attracting investment commitments of approximately US$60 billion between 2019 and 2024.

Mumbai, which accounts for 49 per cent of India’s total DC stock, dominates the market, followed by Chennai, Delhi-NCR and Bengaluru. In the January-September 2024 period, these Tier-I cities together account for about 90 per cent of the country’s DC stock.

Mumbai and Chennai’s stronghold is strengthened by their strategic infrastructure, including multiple cable landing stations, government support and established financial industries, making them major hubs for BFSI, cloud, hyperscale and OTT companies.

India’s DC stock stood at around 1,255 MW (~19 million sq ft) as of September 2024 and is projected to grow to around 1,600 MW (~24 million sq ft) by the end of the year.

In 2025, an additional 475 MW capacity is under construction, with supply expected to increase from Mumbai and Chennai.

Demand from public sector undertakings as well as technology firms, BFSI, fintech and media sectors is expected to further increase the occupancy rate, which currently stands at 75-80 per cent.

India’s generic AI sector is projected to grow at a compound annual growth rate (CAGR) of 28 percent from 2023 to 2030, which will contribute significantly to DC demand.

The adoption of generic AI is estimated to add US$400 billion to India’s economy by 2030, underscoring the importance of strong digital infrastructure.

State-level incentives have played an important role in attracting DC investment. Maharashtra, Tamil Nadu and Telangana were among the first states to introduce dedicated policies, defining DCs as an “essential service” and offering extensive infrastructure support.