MUMBAI: India’s rapidly expanding digital backbone is set for another big leap, with the country’s total data centre capacity expected to grow by nearly 30% in 2026, adding around 500 megawatts (MW) of fresh capacity across major cities, according to a report by CBRE Group, Inc..While Mumbai accounts for over half of India’s data centre capacity due to strong connectivity and power reliability, the growth is now spreading to cities like Ahmedabad, Visakhapatnam, Patna and Bhopal. This is driven by 5G expansion, demand for low latency and data localisation norms, improving digital access beyond metros.This comes on the back of a record 2025, when India’s total installed data centre capacity crossed 1,700 MW, driven by an unprecedented addition of 440 MW—over 160% higher than the previous year.In simple terms, data centres are the backbone of the internet—large facilities that store and process everything from WhatsApp messages and UPI payments to Netflix streaming and government databases. The more capacity India builds, the faster, safer and more reliable these services become for everyday users.For the common citizen, the surge in data centre infrastructure directly impacts daily life by enabling faster internet and smoother apps through reduced latency (delay in data transfer), improving reliability of banking, UPI, e-governance and telemedicine services, and enhancing data security through localisation.The sector also generates jobs across construction, engineering, IT and facility management, while increased scale may reduce long-term cloud service costs.The sector is witnessing massive investor interest, with total investment commitments reaching $126 billion by end-2025 and projected to rise by about 45% to cross $180 billion in 2026. Experts say data centres are now being treated as a mainstream asset class, making them a top investment bet in the Asia-Pacific region. “India’s data centre story is no longer about potential but about execution at scale,” said Anshuman Magazine of CBRE, highlighting strong foreign investor participation.However, rising power demand remains a challenge, prompting a shift towards renewable energy. India added a record 44.5 GW of renewable capacity in 2025, supporting sustainable growth of the sector.The government has further boosted the sector through Union Budget 2026-27 measures, including a tax holiday till 2047 for foreign cloud firms using India-based infrastructure, a 15% safe harbour margin to ease tax disputes, and 25–35% capital support for green data centres.The rapid expansion of data centres is central to India’s digital economy, strengthening digital sovereignty, boosting innovation and startups, and enhancing global competitiveness, while delivering faster, safer and more reliable services to citizens.
