India’s data centre industry is witnessing rapid growth, with capacity expected to rise from 1.6 GW in June 2026 to 6 GW by 2029, making it one of Asia’s fastest-growing digital infrastructure markets, according to JLL. The expansion, driven by Artificial Intelligence (AI) workloads and hyperscale cloud deployments, is expected to require USD 110 billion in capital investments and create multi-gigawatt infrastructure capacity across the country.

The sector recorded strong momentum in the first half of 2026, with 101 MW of absorption, exceeding the three-year H1 average by over 20%. During the same period, 85 MW of new supply was added, largely concentrated in Mumbai and Chennai. Increased pre-committed deliveries pushed vacancy levels to a record low of 2.8%, highlighting strong market demand.

“India’s data centre landscape is undergoing a fundamental transformation in scale and ambition. The combination of tax incentives and hyperscale investments for AI-driven infrastructure is positioning India as a strategic hub for digital innovation,” said Rachit Mohan, Managing Director, Data Centre Leasing, APAC, JLL.

The implementation of the Digital Personal Data Protection (DPDP) rules, with full compliance required by May 2027, is expected to further strengthen demand for secure and compliant data centre infrastructure. The framework mandates stronger security protocols, breach reporting and localised data processing, creating opportunities across sectors such as banking, financial services and insurance (BFSI), healthcare and technology.

The sector’s expansion is also expected to support growth across power generation, real estate, telecommunications and manufacturing, while creating demand for skilled technical professionals. With governments enhancing grid infrastructure and promoting renewable energy adoption, India’s data centre ecosystem is set to become a key pillar of the country’s digital economy.