India’s data centre capacity additions jump 59% in H1 2026

India’s data centre sector is witnessing sustained momentum, with demand continuing to outpace new capacity as hyperscalers, cloud providers and large enterprises expand their digital infrastructure. Strong investments, rapid cloud adoption and the growing use of artificial intelligence are driving the country’s emergence as one of the world’s fastest-growing data centre markets.

According to Savills India, new data centre capacity additions rose 59.3 per cent year-on-year to 258 MW IT in H1 2026 from 162 MW IT a year earlier. Operational stock expanded 36.6 per cent to 1,819 MW IT from 1,332 MW IT, while absorption increased 31.1 per cent to 278 MW IT from 212 MW IT, reflecting sustained demand from hyperscalers, cloud providers and large enterprises.

Hyperscalers remained the biggest demand drivers, accounting for more than 80 per cent of total absorption during the first half of the year. Of the country’s operational stock, 36 per cent comprised hyperscale facilities, while 55 per cent consisted of campuses serving both hyperscalers and enterprise customers. Enterprise-focused facilities accounted for 8 per cent of the stock, with edge data centres making up the remaining 1 per cent.

Mumbai retained its position as the country’s largest data centre market, accounting for 38 per cent of total absorption in H1 2026, followed by Chennai at 26 per cent. Together, the two cities contributed nearly two-thirds of total demand. Delhi-NCR accounted for 22 per cent, while Hyderabad contributed 11 per cent.

On the supply side, Mumbai led with 55 per cent of all new capacity additions, followed by Chennai at 20 per cent and Hyderabad at 10 per cent. Tier-II cities accounted for 7 per cent of new supply, reflecting the gradual expansion of data centre development beyond the established metro markets.

Mumbai also continued to dominate India’s installed data centre capacity, with an operational stock of 846 MW IT, accounting for 46 per cent of the national total. Chennai followed with 320 MW IT (18 per cent), while Delhi-NCR and Pune accounted for 191 MW IT and 182 MW IT respectively, each contributing around 10 per cent of the country’s operational stock.

Land acquisition activity also remained strong, with more than 120 acres transacted for data centre projects across key markets during the first half of the year, highlighting continued investor confidence in the sector.

Srihari Srinivasan, Director & Lead, Data Centre Services, Savills India, said, “The Indian data centre market continues to witness sustained growth, driven by both established operators and an influx of new funds and developers seeking to establish a presence in this sector. While the broader colocation market has experienced relatively moderate demand due to increasing enterprise adoption of cloud services, demand from hyperscalers and large enterprises remains strong and is expected to continue underpinning market expansion.

He added that a new wave of demand is likely to come from Neo-Cloud service providers evaluating India as a strategic destination.

“We anticipate emerging demand from Neo-Cloud service providers, many of whom are actively evaluating India owing to its compelling cost advantages, location-agnostic nature and expanding infrastructure ecosystem. Despite the steady market outlook, facilitating power availability and suitable land parcels for data centre development remains a critical challenge across all key data centre markets in India. This is prompting hyperscalers and data centre operators to explore new clusters for future expansion, with the support of local governments,” said Srihari Srinivasan, Director & Lead, Data Centre Services, Savills India.

The report projects that India’s data centre market will continue its rapid expansion, with operational capacity expected to exceed 7 GW IT by 2030. Annual capacity additions are expected to accelerate to 350-500 MW IT between 2026 and 2030, nearly double the 150-250 MW IT added annually during 2022-2025. Both capacity additions and absorption are forecast to surpass 600 MW IT in 2026.

The next phase of growth is expected to be fuelled by hyperscale expansion, AI workloads, cloud adoption, 5G deployment, the Internet of Things (IoT) and rising demand for low-latency digital infrastructure. While Mumbai, Chennai and Hyderabad will remain the country’s key data centre hubs, cities including Vizag, Nagpur, Bhubaneswar, Patna, Lucknow, Jaipur, Kochi, Coimbatore, Madurai, Raipur and Hubballi are expected to emerge as important destinations for future investments as operators seek new locations with adequate land and power infrastructure. Rprealtyplus