India's Data Centre capacity to Reach 1.8 GW by 2027: JLL

MUMBAI, April 09, 2025: The India's data centre industry is poised for explosive growth, with capacity projected to surge 77% by 2027, reaching a staggering 1.8 GW, according to JLL report, “Indian Data Centre Market Dynamics,” This remarkable expansion comes on the heels of the industry surpassing the 1 GW milestone in 2024, demonstrating a robust 24% CAGR since 2019. Driven by Cloud Service Providers demand and the burgeoning AI sector, this growth positions India as a rising powerhouse in the global digital infrastructure landscape

This growth has been driven by continuous scaling of operations by Cloud Service Providers (CSPs) leading to sharp surge in demand for Indian data centre industry. The impact of Artificial Intelligence (AI) and its application is expected to further propel demand. The surge in demand, towards the end of 2024, has been nothing short of spectacular, with CSPs providers leading the charge and accounting for 54% of user demand.

BFSI (Banking, Financial Services, and Insurance) and Technology sectors follow closely, contributing 18% and 12% respectively of the total occupancy. The data centre industry is geographically diverse, with key hubs across the country. From the financial capital of Mumbai to the tech hub of Bengaluru, and from the national capital region of Delhi to the southern powerhouse of Chennai, India's data center footprint is expanding nationwide.

Mapping India's digital footprint across cities:

Mumbai has emerged as the undisputed leader in India's data centre market, commanding a staggering 52% of the country's total capacity. This dominance highlights Mumbai's critical role in India's digital infrastructure and its position as the nation's data hub.

Chennai follows at a distant second, hosting 21% of India's data centre capacity. Interestingly, established tech hubs like Bengaluru, often called India's Silicon Valley, and Hyderabad each account for 7% of the country's data centre capacity. Delhi NCR holds just 9% of the data centre share, while Pune and Kolkata each contribute 7% and 6% respectively.

“The global data centre industry is undergoing a momentous shift driven by AI and machine learning advancements. India data centre absorption increased 186MW in 2024, year-on-year growth of 27%. This growth has been driven strong offtake by CSPs as well as regulation driven surge in BSFI demand. The India AI mission will foster AI adoption across sectors, contributing to the USD 1 trillion digital economy goal. India is expected to add new data centre new supply of 785MW (IT load) with USD 5 billion in investments for the digital and real estate infrastructure. Cloud service providers have pre-committed and reserved 800MW for AI workloads providing robust growth ahead. Consequently, India is expected to emerge as a dominant force in the global data centre market, driving unprecedented technological innovation and economic growth. The future demand growth is expected to be impacted from headwinds of US diffusion policy which restrict transfer of advanced technology,” said Rachit Mohan, APAC Lead (Data Centre Colocation Leasing) and Lead (Data Centre Transactions and Leasing), India, JLL. 

The Indian data centre industry experienced remarkable growth in H2 2024 (July-December). Supply increased by 51% year-on-year, reaching 114MW. This surge was primarily driven by CSPs fulfilling their pre-committed projects. Demand growth was equally impressive, with absorption rising by 51% to 122MW. CSPs took up larger spaces to prepare for the new wave of AI-driven demand, while the BFSI segment also saw higher uptake to comply with regulatory requirements.

Samantak Das, Chief Economist and Head of Research & REIS, India, JLL said, “The Indian data centre industry is poised for unprecedented growth, driven by technological advancements and supportive government policies. We anticipate a significant capacity expansion of 77% by 2027, reaching 1,825MW. This growth trajectory will necessitate substantial investments in infrastructure and compliance measures. To support this expansion, we project a real estate demand of approximately 9.3 million sq. ft. The industry is at a pivotal point, balancing rapid growth with the need for sustainable and compliant operations.”

The Digital Personal Data Protection Act and its accompanying rules are set to transform the data protection landscape, impacting colocation data centre operators. These regulations aim to balance citizen rights with innovation, implementing graded responsibilities for data fiduciaries. Key features include clear information on data processing, informed consent, rights to data erasure, and child protection measures. The Indian government's push for an AI mission is expected to significantly boost the data centre industry. While specific details of the AI mission are not provided in the given context, such initiatives typically involve investments in AI research, development of AI-focused infrastructure, and policies to promote AI adoption across various sectors. These efforts are likely to increase demand for high-performance computing resources, driving further growth in the data centre industry. Data centres will play a crucial role in supporting the computational needs of AI research and applications, potentially leading to increased investments in AI-optimized data centre facilities across the country.

About JLL India

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 16,000 professionals. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit jll.co.in