India’s data centre capacity likely to cross 3 GW by 2028 on AI, hyperscaler demand: CBRE

India’s data centre (DC) capacity is expected to cross 3 gigawatts (GW) by the end of calendar year 2028, driven by rising demand from hyperscalers, accelerating artificial intelligence (AI) workloads and the country’s growing attractiveness as Asia Pacific’s most development-friendly DC market, according to CBRE’s 2026 Asia Pacific Data Centre Trends & Outlook report. 

The report said India’s total live data centre stock reached 1,700 MW by the end of 2025 while an additional 500 MW of capacity is projected to be added in 2026, as per CBRE’s India Alternate Sectors Outlook 2026. 

India has now been classified among APAC’s “Leading Markets”, an upgrade from its earlier “High Growth” status, placing it alongside Japan, Australia, South Korea, Mainland China, and Malaysia. “The combination of a low-bottleneck development environment, a rapidly expanding digital economy, and aggressive hyperscaler commitments positions India as one of the most compelling DC markets globally,” said Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East, and Africa, CBRE. 

“As AI workloads multiply and the demand base broadens beyond cloud to Neocloud, GCCs and enterprise users, we expect the country’s capacity trajectory to remain steep well beyond 2028,” he added. 

According to the report, India is the only major APAC market to receive a “Low” rating across all four parameters in CBRE’s Data Centre Development Bottlenecks Scorecard, which assesses markets on power constraints, construction costs, shortage of skilled labour, and community, and environmental risks. 

CBRE said this structural advantage is translating into strong on-ground development activity. Mumbai continues to dominate India’s DC market with over 800 MW of operational capacity and another 750 MW under construction or committed. 

Chennai, Hyderabad, and Delhi-NCR are emerging as the next major hyperscale destinations while Bengaluru remains a key hub for enterprise colocation demand. 

Ada Choi, Head of Asia Pacific Research at CBRE, said India offers developers and investors a rare combination of cost competitiveness, policy support, and scalability. 

“While several large markets grapple with power constraints, rising construction costs and community resistance, India presents developers and investors with a combination of cost competitiveness, policy support and scalability. Paired with deepening demand across Tier I and Tier II cities, this underpins our confidence in the 3 GW milestone,” she said. 

The report noted that total data centre investment across the APAC region touched a record $11.6 billion in 2025, with investors increasingly favouring asset-specific exposure and improved liquidity. 

Entity-level transactions involving platforms and operating companies reached $8.3 billion during the year, while more operators adopted capital recycling and fund management models to support expansion and strengthen balance sheets. 

Demand in India’s DC market is also broadening beyond hyperscalers, which currently account for 50-55 per cent of market activity. 

During the January-March quarter, cloud service providers contracted large capacities exceeding 300 MW. Apart from traditional cloud players, demand is now increasingly coming from Neocloud operators, semiconductor companies, research and development users, and Global Capability Centres (GCCs). 

The report said AI continues to be the key structural driver of data centre demand, increasing the need for higher rack densities, advanced liquid cooling systems and more compute-intensive workloads. 

Global Neocloud providers are actively targeting India’s Tier I cities with planned capacity take-up of around 5-15 MW per site. These firms provide GPU-as-a-Service (GPUaaS) solutions and lease computing power to hyperscalers, AI labs, startups, research firms, media companies and gaming firms. 

Tier II cities are also gaining traction, with edge-style facilities emerging in Jaipur, Ahmedabad, and Lucknow, alongside rising enquiries for containerised data centres in the 8-10 MW range.