India's data centre capacity to grow 66% by 2026: JLL

According to a report from JLL India, India's data centre capacity is expected to expand significantly by 66% by 2026, influenced heavily by advancements in artificial intelligence (AI) and the proliferation of 5G technology.

The report highlights a projected addition of 604 MW to the data centre (DC) industry's capacity over the coming two and a half years, situating India as a key player in AI innovation and data centre development worldwide.

Rachit Mohan, APAC Lead - Data Centre Leasing at JLL, commented on the development: "India is rapidly establishing itself as a global centre for AI innovation and data centre growth. Hyperscalers are increasingly pursuing self-build projects in major data centre hubs, while operators are planning new campuses powered by 400 kVA lines to support AI clusters."

"Navi Mumbai, a satellite city near Mumbai, is emerging as a key data centre location, with potential demand expected to reach 800 MW in the next few years. The push for AI-ready infrastructure, combined with the transformative influence of 5G, is revolutionising India's digital ecosystem and positioning the country as a leader in technological advancements."

The data centre industry in India has already reached a capacity of 917 MW, with 873 MW occupied in the first half of 2024, indicating highly competitive market conditions.

Over the past four and a half years, from 2019 to the first half of 2024, the sector saw substantial growth, expanding 2.5 times with a compound annual growth rate (CAGR) of 24%. This expansion is anticipated to continue, supported by governmental strategies, including a USD 1.24 billion investment in AI infrastructure. Additionally, 5G network coverage has reportedly reached over 90% of the Indian population by the end of 2023.

Dr. Samantak Das, Chief Economist and Head of Research and REIS, India, JLL, provided further insights: "The future expansion of the DC industry until 2026 will require approximately 7.3 million sq. ft. of real estate and a capital investment of USD 3.8 billion. Mumbai is expected to maintain its market leadership, while we anticipate significant growth in Chennai and other regions. This expansion is not only driving demand for specialised skills but also creating opportunities across backward-linked industries."

As India advances its technological capabilities, the growth of the data centre industry is projected to significantly impact the country's digital infrastructure and economic environment, creating new employment opportunities, driving technological advancements, and fostering innovation across various key sectors.