India’s data centre sector is projected to achieve 1.7 GW capacity by the end of 2026, adding 220 MW during the year, according to Cushman & Wakefield report.
This growth signals steady progress in the country’s digital infrastructure development, driven by favourable government measures and technological advancement.
India concluded 2025 with a colocation capacity of 1.5 GW across 7 metro cities including Mumbai, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Pune.
An expected addition of 220 MW in 2026 is likely to push the total installed capacity to 1.7 GW by year-end. The addition, although less than 2024's 270 MW, indicates consistent infrastructure development.
States implementing dedicated data centre policies and the draft National Data Centre Policy are contributing factors to this steady expansion. The market continues to attract investments in both core and edge data centres.
The Ministry of Electronics and Information Technology has introduced initiatives such as IndiaAI programme and the Digital Personal Data Protection Act.
These aim to improve data governance and promote digital adoption nationwide. Further, the National Data Centre Policy proposes tax incentives linked to capacity growth, energy efficiency, and employment generation.
Additionally, the government is working towards improving the national power grid and streamlining land approval processes to support data centre construction.
In 2026, multiple new submarine cable landing stations are expected to become operational. Digha in West Bengal will host a greenfield station, while 3 others will be functional in Mumbai and 1 in Chennai.
These facilities are crucial for improving international bandwidth and will contribute to regional growth in data hosting capabilities.
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Investments in edge data centres are rising in Tier-II cities such as Bhubaneswar, Lucknow and Guwahati. These facilities are designed to enhance user experience through lower latency by processing data closer to consumption points.
With better connectivity and infrastructural support, these cities are witnessing growing interest from operators keen to tap into the regional digital demand.
India’s data centre industry is progressing with a targeted capacity of 1.7 GW in 2026. Backed by government policies, improved connectivity infrastructure, and decentralised investments, the sector continues to grow and adapt to the increasing demand for digital services.
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Published on: Jan 7, 2026, 3:43 PM IST
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