India’s data centre industry is witnessing a sharp rise in demand, with AI workloads and hyperscale cloud expansion rapidly consuming available capacity across major markets.
According to a report released on May 27 by a real estate consultancy firm, India’s data centre vacancy levels dropped to 12.9% by the end of 2025 despite aggressive capacity expansion across the country. The report highlights that the sector is entering a supply-constrained growth phase even with a strong pipeline of 3.1 GW currently under construction and planned.
India is now the second-largest data centre market in the Asia-Pacific region with 1.6 GW of operational capacity. The country also ranks among the top 3 global markets for future development capacity.
Mumbai continues to lead the market and is expected to cross 1 GW of operational capacity by the end of 2026. At the same time, growth is expanding beyond Mumbai into Hyderabad, Chennai, Pune and Delhi-NCR. Hyderabad has emerged as one of the fastest-growing secondary markets in Asia-Pacific and ranks 9th globally due to rising investments from hyperscalers and enterprises.
The report noted that most new data centre capacity across Asia-Pacific is being pre-leased even before completion because of increasing demand from AI and cloud computing workloads. Regional vacancy levels declined from 12.4% to 10.9% despite more than 1.5 GW of new supply being added during the year.
India’s future pipeline remains strong, with more than 10.5 GW currently in the planning or land acquisition stage. Demand is being driven by AI adoption, enterprise digitisation, cloud expansion and the rapid growth of Global Capability Centers across Indian cities.
Emerging cities such as Visakhapatnam are also positioning themselves as AI-focused digital infrastructure hubs due to scalable land and power availability.
“The global data centre sector is moving into a more execution-driven phase of growth, where access to power, infrastructure readiness and delivery capability are becoming as important as demand itself,” said Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield.
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