India’s data center (DC) industry has been on a steep growth curve in recent years, emerging as a pivotal pillar of the country’s digital infrastructure. According to a recent report by Colliers India, the current data center capacity stands at approximately 1,263 MW across the top seven markets — a figure poised to nearly quadruple to 4,500 MW within the next five to six years. This translates into an expansive real estate footprint of 55 million square feet dedicated to data center infrastructure, highlighting the sector’s strategic importance in India’s rapidly digitizing economy.
The Rise of Hyperscale Data Centers
Hyperscale data centers, characterized by their enormous scale, highly automated operations, and ability to handle massive data loads, have traditionally been the backbone of digital transformation. These colossal facilities, often operated by global tech giants or large colocation providers, serve as centralized hubs for cloud computing, content delivery, and large-scale data processing.
Jatin Shah, Chief Operating Officer of Colliers India, explains, “India is becoming a global DC hotspot, fueled by rapid digitalization, data localization norms and strong government support. As this growth trajectory continues, India’s DC capacity is likely to cross 4,500 MW in the next 5-6 years, translating into a real estate footprint of 55 million sq ft.” He adds that India’s strategic advantages—availability of land parcels, reliable power supply, and a skilled talent pool—cement its position as a preferred destination for hyperscale data centers in the Asia-Pacific region.
This hyperscale boom is closely tied to rising data consumption driven by sectors such as e-commerce, fintech, OTT platforms, and enterprise cloud adoption. The demand for large-scale, resilient infrastructure capable of supporting high volumes of data with robust security and uptime has propelled hyperscale facilities to the forefront.
The Emergence of Edge Data Centers
While hyperscale data centers have dominated the narrative so far, a new and equally important evolution is underway—the rise of edge data centers. Unlike their large centralized counterparts, edge data centers are smaller, geographically distributed facilities located closer to the end-users or data sources.
“The market is expanding beyond large-scale colocation facilities and hyperscalers to edge data centers driven by increasing need for lower latency, real-time analysis, enhanced app performance, and business agility,” notes Jatin Shah. This shift is largely driven by the exponential growth of latency-sensitive applications such as IoT, autonomous vehicles, AR/VR, and real-time analytics.
Edge data centers play a critical role in minimizing latency by processing data closer to where it is generated or consumed, reducing round-trip times and bandwidth usage. They enable businesses to deliver faster, more
responsive digital experiences, essential in a hyperconnected world.
Real Estate and Investment Implications
The rise of data centers as a critical real estate asset class is reshaping development priorities. Uddhav Poddar, CMD of Bhumika Group, emphasizes the scale of investment and its impact: “The growing investment in data centres—projected at $20–25 billion by 2030—is a clear sign of how digital infrastructure is becoming more central to India’s growth story. This shift is gradually reshaping real estate priorities as well.”
He further elaborates that developers must now focus on “power availability, connectivity, and compliance with technical requirements that go beyond traditional commercial or industrial spaces.” This means that real estate development for data centers requires a unique blend of technical expertise and strategic location planning.
While metropolitan cities continue to lead the charge in hosting hyperscale data centers due to their established infrastructure and connectivity, emerging hubs like Faridabad are gaining attention for their strategic connectivity and infrastructure readiness. At the same time, Tier II cities with abundant and affordable land are being eyed for new developments, particularly for edge data centers where proximity to local users is critical.
The Road Ahead
India’s data center landscape is evolving rapidly, with hyperscale and edge models complementing each other to meet diverse business and consumer demands. Hyperscale centers will continue to underpin cloud and enterprise needs, while edge facilities will support latency-critical applications and enhance business agility.
This dual evolution presents ample opportunity for investors, developers, and technology providers to innovate and collaborate in shaping India’s digital future. As Jatin Shah succinctly puts it, “India’s strategic advantages… reinforce its position as one of the preferred destinations for data centers in the APAC region.”
With projected investments of up to $25 billion by 2030 and a rapidly expanding footprint, the future of India’s data centers is bright, dynamic, and central to the nation’s ambition of becoming a digital powerhouse.
