India data centre market sees hyperscaler-led demand surge
Strong hyperscaler and enterprise demand may keep occupied capacity around 75%-80%, support higher Mumbai colocation prices and favour newer high-density facilities over older assets.
Hyperscalers account for an estimated 50%-55% of India’s data-centre occupier demand, contracting more than 300 MW in Q1, while over 3 GW of supply could be added medium term.
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Around 55% of occupier demand is from hyperscalers.
India's data centre market is seeing strong demand from hyperscalers while colocation requirements are broadening across enterprise sectors, according to CBRE Research.
Hyperscalers continue to account for an estimated 50-55% of occupier demand, with the report noting a first-quarter spike as hyperscalers contracted for more than 300 MW of capacity. Colocation demand is also expanding beyond traditional cloud players, including capacity outsourced for hyperscaler workloads.
CBRE said additional demand is emerging from manufacturing, logistics, media, e-commerce, research and development, and semiconductor occupiers. R&D and semiconductor companies are increasingly establishing specialised labs, with some moving from conventional office environments into third-party colocation facilities to support larger workloads.
Mumbai remains India's dominant data centre market, accounting for more than half of national capacity and attracting both hyperscaler and enterprise occupiers, CBRE said. Chennai and Hyderabad remain key hyperscale markets, while Bengaluru is a significant hub for enterprise colocation demand.
On the supply side, near-term additions are expected to be led by Mumbai, followed by Chennai, Delhi NCR and Bengaluru. CBRE said the volume of supply under construction, together with recently announced projects, could add more than 3 GW in the medium term. National occupied capacity is expected to remain around 75-80%, although older facilities could face challenges as customers migrate towards newer assets capable of supporting higher rack densities.
Investment and development
Investor sentiment remains strong, with substantial capital commitments announced for India's data centre and digital infrastructure market, according to CBRE. Investment activity is primarily development-led, with capital flowing into new campuses, self-built projects and build-to-suit facilities, rather than large pools of stabilised assets.
CBRE identified India's broader digitalisation, including the government's Digital India programme and continued growth in online retail and digital payments, as structural demand drivers. Artificial intelligence is emerging as another major source of demand, with higher rack densities and more intensive cooling requirements expected to influence future facilities.
The report also points to growing interest in 10-15 MW mini build-to-suit data centres, while global providers are targeting strategic entry into India with 5-15 MW sites supported by liquid-cooling configurations. Tier I and edge markets are gaining visibility, with smaller facilities of around 5-6 MW in cities such as Jaipur, Ahmedabad and Lucknow. Tier II locations are also beginning to attract containerised data centre projects of around 8-10 MW.
CBRE highlighted several constraints, including land acquisition and identification, power availability, rising land prices, longer approval and permitting timelines, labour shortages, and increasing construction costs, particularly for cooling infrastructure.
Major market developments
CBRE's selected market movements include Google's development of a 1 GW data centre campus in Visakhapatnam, Andhra Pradesh, involving data centre operators AdaniConneX and Airtel Nxtra, with commissioning targeted for 2028. Amazon Web Services (AWS) is planning a data centre campus with 4.7 MW of capacity in Navi Mumbai.
The report also highlights a collaboration between Tata Consultancy Services (TCS), through its subsidiary HyperVault, and AMD to develop an AI-ready data centre blueprint based on AMD's Helios platform. The initiative is intended to enable rack-scale AI infrastructure and support up to 200 MW of capacity for India's national AI initiatives.
Airtel Nxtra has secured $1 billion in foreign investment to accelerate its expansion across India, with planned capacity growth from about 300 MW to 1 GW over the next few years. In April 2026, Blackstone consolidated its data centre portfolio by integrating Lumina CloudInfra into its hyperscale platform AirTrunk, bringing Lumina into AirTrunk's global operations, according to CBRE.
For Mumbai, CBRE's Q1 2026 data shows more than 800 MW of total capacity and approximately 750 MW of upcoming capacity. The firm's 2026 outlook points to higher colocation prices and lower vacancy in the market.