India’s Data Centre Capacity Set to Reach 2 GW by End-2026 as AI and Hyperscale Demand Accelerate

India’s data centre market is entering a new phase of expansion, with more than 200 MW of additional capacity expected to become operational in the second half of 2026, according to CBRE’s report Beyond Growth: India’s Rise Among APAC’s Leading Data Centre Markets.

The country added about 130 MW of new capacity during the first half of 2026. With the next wave of projects scheduled for completion, India’s total operational data centre capacity is expected to approach 2 GW by the end of the year.

India Moves Into APAC’s Leading Data Centre Markets

CBRE has moved India from the “High Growth Market” category to the “Leading Data Centre Markets” category in the Asia-Pacific region.

India now stands alongside Japan, Australia and Mainland China in this group, reflecting the growing scale, maturity and investment depth of its data centre ecosystem.

The shift is important because it shows that India is moving beyond rapid expansion and becoming a more established part of the Asia-Pacific digital infrastructure landscape.

Investment Commitments Reach US$173 Billion

Capital commitments to India’s data centre sector have expanded sharply over the past few years.

According to CBRE, cumulative investment commitments from 2021 through the first half of 2026 reached approximately US$173 billion, including around US$38 billion announced during H1 2026 alone.

Hyperscale and colocation projects accounted for a major share of these commitments, while more than 15% was linked to artificial intelligence. This reflects the growing influence of AI workloads on infrastructure planning and investment decisions.

AI Is Becoming a Major Source of Demand

Artificial intelligence is increasingly shaping how new data centres are designed.

AI workloads require high-performance computing, greater power density, advanced cooling systems and reliable electricity supply. These requirements are pushing operators towards larger campuses and more specialised facilities.

As AI adoption increases across enterprises, cloud platforms and public-sector applications, demand for high-density computing infrastructure is likely to rise further.

Mumbai Remains India’s Largest Data Centre Hub

Mumbai continues to dominate India’s data centre market.

The city accounted for the majority of new capacity added during the first half of 2026 and remains India’s largest operational hub. Its position is supported by strong fibre connectivity, international cable landing stations and a mature operator ecosystem.

Chennai and Delhi-NCR remain other major centres, while Hyderabad, Bengaluru, Kolkata and Visakhapatnam are attracting increasing attention from developers and investors.

Expansion Is Becoming More Multi-City

A notable feature of the current growth phase is the shift towards geographically diversified portfolios.

CBRE reported that multi-city strategies accounted for more than 85% of investment commitments during H1 2026.

This reflects the need for greater network resilience, lower latency, access to land and power, and closer proximity to regional users.

The next major data centre hubs are likely to emerge in cities that can offer a favourable combination of electricity availability, connectivity, land, water and supportive state policies.

Domestic Developers Strengthen Their Role

Indian developers are becoming increasingly important in the sector.

Domestic players accounted for 48% of new supply added during H1 2026, ahead of American developers at 28% and European players at 24%.

Domestic investors also held the largest share of cumulative capital deployed since 2021, accounting for 38%, followed by the United States at 27%.

This growing local participation is significant because it can deepen domestic engineering capability, strengthen supporting supply chains and increase India’s control over critical digital infrastructure.

Hyperscalers and Cloud Providers Drive Expansion

Demand from hyperscalers and cloud service providers remains a major force behind new capacity additions.

Large technology companies require data centre campuses capable of supporting cloud computing, digital services, streaming, AI workloads and enterprise applications at scale.

BFSI institutions, government agencies, technology companies and over-the-top platforms are also contributing to demand.

The broadening customer base means that data centre growth is no longer dependent on a single segment of the digital economy.

Tier IV Facilities Gain Ground

The market is also becoming more sophisticated in terms of reliability and facility standards.

CBRE noted that the share of Tier IV facilities rose to 43% of overall supply in H1 2026 from 21% in 2024.

Tier IV facilities are designed to provide very high levels of redundancy and uptime, making them suitable for mission-critical workloads.

The increase indicates that India’s data centre market is moving not only towards greater capacity, but also towards more resilient and advanced infrastructure.

Power and Cooling Will Shape the Next Phase

As capacity expands, electricity supply is becoming one of the most important constraints.

Large data centres require continuous power at significant scale, while AI workloads further increase energy intensity.

Operators are therefore placing greater emphasis on access to renewable energy, advanced cooling systems and energy-efficient facility design.

These considerations will increasingly influence where future projects are located and how quickly new capacity can be developed.

Data Centres Become Strategic Digital Infrastructure

India’s data centre expansion reflects the broader growth of its digital economy.

Cloud adoption, artificial intelligence, digital payments, enterprise digitisation and online services are all increasing the amount of computing infrastructure required within the country.

The expected addition of more than 200 MW during the second half of 2026 will push India closer to the 2 GW operational capacity milestone, while large investment commitments point to continued expansion beyond that level.

India’s rise into the Asia-Pacific leading markets category shows how quickly the sector is maturing. With domestic and international operators expanding capacity, AI demand accelerating and multi-city investments increasing, data centres are becoming a strategic foundation for the country’s next phase of digital growth.

---

References

1. CBRE — Beyond Growth: India’s Rise Among APAC’s Leading Data Centre Markets, 2026.
2. CBRE — India Data Centre Market Monitor H1 2026.
3. CBRE — 2026 Asia Pacific Data Centre Trends & Outlook.
4. CBRE — Global Data Center Trends 2026.

---