India’s data centre capacity is poised for explosive growth in 2026, with total stock across major cities projected to rise by approximately 30% year-over-year through 500 MW of new supply additions, pushing overall capacity beyond 2,200 MW. CBRE India Alternate Sectors Outlook 2026 report highlights the sector’s transformation into APAC’s fourth-most preferred investor asset class, backed by USD 126 billion in cumulative commitments through 2025 set to surge 45% past USD 180 billion this year.
The milestone follows 2025’s record 440 MW supply surge—160% above 2024—that elevated total capacity past 1,700 MW. Anshuman Magazine, CBRE Chairman & CEO for India, SEA, MEA & Africa, described the shift: “The data centre story in India is no longer about potential but about execution at scale,” crediting resilient returns, foreign capital dominance and supportive regulations for positioning India among APAC’s fastest-growing markets.
Investment Momentum and Geographic Diversification
USD 56.4 billion flowed into the sector in 2025 alone, with Telangana, Maharashtra, Andhra Pradesh, Tamil Nadu and Uttar Pradesh leading inflows. CBRE’s 2026 APAC Investor Intentions Survey shows over 50% expecting DC value appreciation, 16% forecasting >10% gains—outpacing hotels, offices and logistics. Lower latency, 5G rollout and data localisation drive tier-II expansion to Ahmedabad, Visakhapatnam, Patna and Bhopal.
Mumbai commands >50% of operational inventory via superior subsea connectivity and grid reliability; Mumbai-Chennai-Delhi-NCR-Bengaluru together hold ~90% of tier-I capacity. Ram Chandnani, CBRE India MD-Leasing, noted renewables’ structural role: India’s record 44.5 GW addition in 2025 (nearly double 2024) addresses AI/cloud power strain in dense hubs.
Policy Catalysts Fuel Institutional Acceleration
Union Budget 2026-27’s incentives include long-term tax holidays to 2047 for foreign cloud providers using India-based infra via local resellers, 15% safe harbour margins resolving transfer pricing, and 25-35% capital support for green DC tech. These build on classifications elevating DCs as mainstream assets, streamlining credit and transparency.
The confluence of hyperscale AI demand, sovereign cloud mandates and sustainability mandates positions India’s DC ecosystem for sustained dominance, converting investment pledges into operational reality at global-leading velocity.
