India emerges as APAC’s second-largest data centre market with 1.6 GW capacity: Report

India is emerging as one of Asia Pacific’s most significant growth markets for digital infrastructure, driven by accelerating artificial intelligence (AI) adoption, hyperscale cloud expansion, and rising enterprise demand, according to Cushman & Wakefield’s Global Data Center Market Comparison 2026 report. 

The report said India ranks as the second-largest data centre market in the Asia Pacific region with 1.6 GW of operational capacity. The country is also among the top three markets globally by development pipeline, with 3.1 GW under construction and planned. 

The report evaluated 107 global markets across 24 parameters, including real estate fundamentals, power infrastructure, development activity, regulations and operational risks, to provide a forward-looking assessment of global data centre market dynamics. 

Globally, data centre markets are entering a new phase of expansion amid rapid AI adoption, rising hyperscale cloud demand and mounting pressure on power infrastructure and development timelines. While demand fundamentals remain strong, competitiveness is increasingly being shaped by power availability, execution capability, land access, and regulatory readiness, the report noted. 

Dallas emerged as the world’s leading primary data centre market in the 2026 edition, followed by Atlanta, Virginia, Columbus, and Johor. In the Asia-Pacific region, Johor and Sydney were the only primary markets to feature in the global top 10 rankings while Hyderabad ranked ninth globally among secondary markets. 

India’s data centre ecosystem is supported by multiple cities, including Mumbai, Hyderabad, Chennai, Delhi NCR, Pune, and Bengaluru, all of which featured among the 107 global markets assessed. 

The report classified data centre markets into primary, secondary and tertiary categories, noting that while primary markets continue to attract large-scale investments due to their scale and maturity, development interest is increasingly shifting towards secondary and tertiary markets. 

Mumbai continues to anchor India’s position as a primary market in Asia

Mumbai continues to anchor India’s position as a primary market in Asia Pacific and is expected to surpass 1 GW of operational capacity by the end of 2026, making it one of the region’s fastest-growing data centre hubs. 

Secondary markets such as Hyderabad, Chennai, Delhi NCR, and Pune are also seeing increasing investment and development activity. Hyderabad was identified as the top secondary market in Asia Pacific and ranked ninth globally, underscoring its growing importance in the global data centre landscape. Bengaluru has been categorised as a tertiary data centre market. 

The report said hyperscaler demand remains a key driver of expansion across India, particularly in Mumbai, Hyderabad and Pune. AI workloads and large-scale cloud deployments are increasingly influencing capacity expansion strategies across Indian markets. 

Emerging locations such as Vizag are also positioning themselves as future AI hubs, reflecting a broader shift towards scalable markets capable of supporting next-generation digital infrastructure. 

India’s long-term growth outlook remains strong, supported by more than 10.5 GW of capacity currently at the land acquisition stage, indicating substantial future development potential. 

According to the report, India’s data centre market remains structurally underpenetrated, with data centre density estimated at around 943,000 people per MW, leaving significant room for growth. Vacancy levels declined to 12.9% in the fourth quarter of 2025, indicating continued absorption of new capacity and strengthening demand fundamentals. 

Across Asia Pacific, operational inventory expanded by more than 1.5 GW during the year, marking a 13% increase in capacity. Despite aggressive development activity, vacancy levels in the region fell from 12.4% to 10.9%, reflecting sustained occupier demand. 

The report noted that most new data centres in Asia Pacific are now fully leased before completion, with nearly all capacity under construction already pre-committed. Development pipelines across the region continue to expand at nearly 20% year-on-year. 

India’s outlook is also being supported by policy and infrastructure initiatives. The Draft National Data Centre Policy 2025 proposes tax exemptions of up to 20 years along with GST input tax credits on capital expenditure, signalling regulatory support for further investments in the sector. 

India ranked fourth globally in electricity production growth

The report also noted that India ranked fourth globally in electricity production growth between 2022 and 2025, although transmission losses remain elevated at 14.2%, highlighting the need for continued improvements in grid efficiency. 

“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. 

“India is well positioned within this shift given its combination of strong demand visibility, expanding development pipeline, and growing multi-market ecosystem across both primary and emerging locations,” he added.