India Data Center Investment Seen Topping $54 Billion This Year
AI workloads, cloud demand and data localization are driving a fresh wave of capacity expansion across India’s data center market, says CBRE report.
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[Image source: Chetan Jha/MITSMR India]
India’s data center sector could draw more than $54 billion of investment commitments this year, with capacity across major cities projected to rise about 30% as artificial intelligence workloads, cloud demand and data localization requirements drive another year of heavy buildout, real estate consultant CBRE said in a report.
The country is likely to add about 500 megawatts (MW) of new data center supply this year, after total capacity reached about 1,700 MW in 2025 following a record 440 MW of additions, the report, titled ‘India Alternate Sectors Outlook 2026,’ said.
That took the market to roughly 26 million sq. ft, underscoring how quickly data centers are becoming a mainstream real estate asset class in India.
CBRE said the sector’s expansion is being driven by AI-led computing demand, the rollout of 5G networks, and policies that favor local data storage.
Operators are also building out more GPU-heavy infrastructure to support high-performance computing, a shift that is raising power density and pushing developers to rethink both site selection and energy sourcing.
Mumbai remained India’s largest data center hub at the end of 2025, accounting for more than half of operational capacity, helped by subsea cable connectivity and relatively reliable grid access.
Chennai, Delhi-NCR and Bengaluru together accounted for much of the rest of the country’s tier-I inventory, while investment is beginning to spread to tier-II cities as operators chase lower latency and new enterprise demand.
The buildout is also sharpening pressure on electricity infrastructure.
CBRE said renewable energy procurement is becoming a more structural part of data center strategy as operators try to secure long-term power supply while limiting emissions.
The report pointed to policy support in states including Maharashtra, Tamil Nadu and Karnataka, alongside emerging opportunities in Telangana, Andhra Pradesh, Rajasthan, Uttar Pradesh, Madhya Pradesh and Kerala.
CBRE’s broader outlook is that India will remain one of the fastest-growing data center markets in Asia-Pacific in 2026, supported by policy tailwinds, hyperscale expansion and rising investor appetite for alternative real estate assets.
The firm’s Asia-Pacific investor survey also found that regional investors expect data centers to see the strongest price appreciation this year.
