India Data Center Investment: Mumbai, Chennai and the Hyperscaler Commitments

India data center investment has moved from a niche colocation story to one of the largest AI infrastructure build-outs outside the United States and China. This guide, part of the Kurums Data Center Economy hub, explains how much capacity India has today, where it sits, which hyperscalers and conglomerates have committed capital, what the 2026 tax holiday changes, and what could slow things down. For context on how India compares with its neighbours, read our Asia-Pacific data center investment guide, and for the cost side of any new campus see how much it costs to build a data center in 2026.

How big is India’s data center market in 2026?

India had roughly 1.8 GW of operational IT data center capacity at mid-2026, according to Savills India, after adding 258 MW in the first half of the year. That is still small next to the United States, but growth is accelerating faster than in almost any other large market.

The Savills India H1 2026 report found that new supply rose 59% from the 162 MW delivered in H1 2025, while absorption (capacity actually leased or occupied) reached 278 MW, up about 31% year on year. Absorption running ahead of new supply is a sign that the market is not yet overbuilt, even though enterprise colocation demand has cooled as companies move workloads to public cloud. Savills expects both supply additions and absorption to exceed 600 MW across full-year 2026.

Estimates differ by methodology. Cushman & Wakefield’s 2026 India report counted 1.6 GW of operational capacity, ranking India second in Asia-Pacific, with a 3.1 GW pipeline under construction or planned and more than 10.5 GW at the land-acquisition stage. S&P Global’s CERA team also uses about 1.6 GW, while a government reply in the Rajya Sabha described current capacity as under 2 GW. Whichever base you use, India sits in the 1.6–1.8 GW range, roughly a fifth of what Savills projects for 2030.

The mix of occupiers matters for investors. Savills classifies 36% of operational stock as hyperscaler-focused, 55% as mixed hyperscale and enterprise, 8% as enterprise-only and 1% as edge. The largest cloud and AI customers already anchor most of the market. Cushman & Wakefield put colocation vacancy at 12.9% in Q4 2025, which is higher than in supply-starved hubs such as Johor or Northern Virginia and reflects how quickly new halls are coming online.

Why are Mumbai and Chennai the centre of India’s data center map?

Mumbai and Chennai dominate because they combine subsea cable landings, dense fibre, large enterprise and financial-sector demand, and established power infrastructure. Mumbai took 55% of new capacity in H1 2026, and Chennai 20%, according to Savills India.

Mumbai, including Navi Mumbai and the Thane–Belapur corridor, is India’s primary market. Cushman & Wakefield’s H1 2026 Asia-Pacific update recorded 890 MW of operational capacity in Mumbai, up 16%, with a 1,726 MW pipeline, and expects the city to exceed 1 GW by the end of 2026. Mumbai also captured 38% of national absorption in H1 2026. Its advantages are west-coast cable landings, the financial sector and existing cloud regions.

Chennai is the second hub, taking 26% of absorption and 20% of new supply in H1 2026 per Savills. It benefits from east-coast cable landings, Tamil Nadu’s industrial power network and a strong IT-services workforce. Delhi-NCR (22% of absorption) and Hyderabad (11% of absorption, 10% of new supply) round out the top four. Cushman & Wakefield ranks Hyderabad the top secondary data center market in Asia-Pacific and ninth globally, helped by Microsoft’s new region and Telangana’s policy package.

The new east-coast corridor

The most important geographic shift is Visakhapatnam in Andhra Pradesh. Google’s $15bn AI hub there, built with AdaniConneX and Airtel’s Nxtra, comes with a new international subsea gateway led by Bharti Airtel. If it works, it creates a third cable-and-power cluster on India’s east coast and gives Andhra Pradesh a role it has never had in digital infrastructure. Tier-II cities took 7% of new supply in H1 2026, a small but rising share, as operators look for cheaper land and spare grid capacity outside the metros.

Which hyperscalers have committed the most money to India?

Amazon, Microsoft and Google have together announced more than $80bn of India spending for the second half of the decade. Amazon’s programme totals $48bn through 2030, Microsoft’s pledges add up to $20.5bn, and Google’s Visakhapatnam AI hub alone is $15bn.

Amazon. In December 2025 Amazon announced $35bn of new India investment across its businesses. On 25 June 2026, after a meeting between Andy Jassy and Prime Minister Narendra Modi, it added $13bn for AI and cloud infrastructure, taking its AI and cloud plan to more than $21bn over 2026–2030 and its total India commitment to $48bn. AWS is expanding capacity in its Mumbai and Hyderabad regions. Note that the $48bn headline includes e-commerce, logistics and export programmes, not just data centres.

Microsoft. Microsoft committed $3bn in January 2025, then announced $17.5bn for 2026–2029 in December 2025, its largest investment in Asia. Its India South Central region in Hyderabad reached general availability in August 2026 as its fourth Indian region, with three availability zones, joining Pune, Chennai and Mumbai. Microsoft India puts its combined commitment at $20.5bn.

Google. Google confirmed a $15bn project in Visakhapatnam in October 2025, described as its first AI hub in India, and the foundation stone was laid in April 2026 on a site of about 600 acres. Google calls it a gigawatt-scale campus; it includes renewable energy supply and new fibre. Google has not published a firm megawatt figure, but DCD and S&P Global CERA both describe roughly 1 GW of eventual capacity.

These sums should be read alongside the global AI capex supercycle: India is a meaningful but still minority slice of hyperscaler budgets that run to hundreds of billions of dollars a year. Our hyperscaler footprint comparison shows how India fits into each company’s global region map.

Source: Company announcements; Outlook Business; w.media; TechCrunch (2025–2026). Amounts are announced commitments, not spent capital.

What are Reliance, Adani and Tata building?

India’s conglomerates are turning data centres into a core business line. Adani targets 5 GW of AI-ready capacity with $100bn by 2035, Reliance is building a 168 MW built-to-suit AI facility for Meta in Jamnagar, and Tata’s TCS has launched HyperVault with OpenAI as its first customer.

Adani. On 17 February 2026 the Adani Group committed $100bn of direct investment to renewable-powered, AI-ready data centres by 2035, targeting 5 GW through AdaniConneX, its joint venture with EdgeConneX. The plan includes the Google campus in Visakhapatnam, additional campuses in Noida, Microsoft-partnered sites in Hyderabad and Pune, and a second AI data centre for Flipkart. Adani expects the programme to catalyse another $150bn in server manufacturing, electrical equipment and sovereign cloud, and it leans on Adani Green Energy’s Khavda renewable complex for power.

Reliance. In June 2026 Reliance Industries and Meta announced an AI-enabled data centre in Jamnagar, Gujarat. Reliance will build the facility and Meta will lease an initial 168 MW, with an option to expand. It is designed to run on renewable power and use desalinated seawater for cooling, an important detail in a water-stressed state. Jamnagar is part of Reliance’s broader data centre campus plan next to its refining and new-energy complex.

Tata. TCS created HyperVault as a separate data centre platform and in November 2025 secured backing from TPG; the platform is linked to about ₹180bn (roughly $2bn) of planned investment. In February 2026 OpenAI became HyperVault’s first customer with 100 MW of AI-ready capacity, with plans to scale to 1 GW over time. Global colocation players are active too: S&P Global CERA attributes about 3.5 GW of Maharashtra’s announced pipeline to AirTrunk, NTT and AdaniConneX projects.

How does India’s 2026 tax holiday for cloud providers work?

The Union Budget of 1 February 2026 offered a tax holiday running to the 2046–47 tax year for foreign cloud companies that serve global customers from notified Indian data centres. It took effect on 1 April 2026 and is designed to stop data hosting in India from creating taxable presence for foreign providers.

Clarifications reported by Business Today set four conditions: the foreign cloud provider must be notified; the data centre operator must be an Indian company; the facility must be notified by the Ministry of Electronics and IT (MeitY); and sales to Indian users must go through an Indian reseller entity. A 15% safe-harbour margin applies where the Indian data centre is a related party, such as a captive cost-plus facility, to limit transfer-pricing disputes. Profits of Indian data centre companies and Indian resellers remain taxable as usual.

The policy logic is to turn India from a cloud consumer into a cloud exporter: a global provider can place capacity in Mumbai or Chennai to serve customers anywhere without worrying that the servers create a permanent establishment. IT Minister Ashwini Vaishnaw suggested the measure could attract about $200bn of investment. Industry groups welcomed the direction but raised concerns about the reseller requirement, and tax advisers note that the notification process will decide how useful the holiday is in practice.

Which state policies are shaping where data centers go?

Indian states compete hard on electricity tariffs, land, stamp-duty waivers and approvals. S&P Global CERA’s 2026 Data Center Policy Attractiveness Index ranks Telangana as the most attractive overall, with Maharashtra and Uttar Pradesh offering balanced packages and Gujarat leading on electricity incentives.

CERA scored 19 policies across 11 states on electricity incentives, land and capital support, operational support and regulation. Gujarat stands out for electricity duty benefits, tariff subsidies and renewable access; Andhra Pradesh for land and capital support; and Tamil Nadu for a strong pipeline despite a lower policy score. CERA describes four phases of state policy, from IT-park era rules before 2018 to today’s focus on AI-ready, hyperscale and renewable-powered campuses.

Geography is expected to broaden. CERA estimates that the top four states accounted for nearly 90% of demand in 2025 and projects that share falling to about 66% by 2035, as Uttar Pradesh, Gujarat and Andhra Pradesh drive new capacity and Haryana, West Bengal, Kerala, Rajasthan and Odisha gain share. A national data centre policy has been in draft for several years; until it is finalised, state frameworks and central tax measures do most of the work.

What constrains India’s build-out: power, water or land?

Power is the binding constraint, followed by land with grid access and, in some states, water. Savills and S&P Global both identify reliable electricity, open-access renewable supply and dual-grid connections as the factors that decide which sites actually get built.

AI campuses need hundreds of megawatts delivered with very high reliability. In India, that usually means a dedicated substation, two independent grid feeds, and a renewable supply contract through open access or captive generation. States that let operators buy green power directly and waive electricity duty gain an operating-cost advantage that compounds over a 20-year asset life. Conglomerates with renewable fleets, such as Adani and Reliance, benefit.

Water is a growing issue in Chennai, Hyderabad and Gujarat. Designs such as Reliance’s desalinated-seawater cooling, and the shift to closed-loop liquid cooling for GPU racks, aim to reduce freshwater use. Land is plentiful in principle but scarce where fibre, power and planning approvals coincide, which is why land banks of more than 10.5 GW (Cushman & Wakefield) are not the same as buildable capacity. Our article on data center water, land and jobs statistics covers the local-footprint debate in more detail.

How fast will India’s data center capacity grow to 2030?

Savills India projects capacity nearly quadrupling to more than 7 GW of IT load by 2030, with annual additions of 350–500 MW between 2026 and 2030, compared with 150–250 MW a year during 2022–2025. Government projections cited in Parliament are far higher, at 26.3 GW by 2031–32.

The spread between forecasts shows how uncertain AI demand is. The Savills view is anchored in projects with land, power and customers; the government figure reflects the total announced pipeline and policy ambition. S&P Global CERA sits between the two, counting about 5 GW of committed additional capacity and another 6–7 GW announced or at early stage. CBRE India estimates cumulative investment commitments since 2019 at around $100bn.

For comparison, Cushman & Wakefield expects India, Japan, Australia and Malaysia each to pass 2 GW of operational capacity by 2028. India’s advantage is the size of its domestic digital economy and its role as a potential export hub under the new tax regime; its disadvantage is that grid upgrades take longer than building data halls.

What does India’s rise mean for global operators and investors?

India is becoming one of the few markets where hyperscalers, domestic conglomerates, private equity and AI labs all compete for capacity at once. That supports long-term demand for land, power equipment and construction services, but it also means pricing pressure and execution risk for late entrants.

For global colocation groups, India offers growth that mature European FLAP-D markets cannot match, but it requires local partners who can secure land and power. For equipment suppliers, the build-out adds demand for transformers, switchgear and cooling at a time when lead times are already long, a theme covered in our data center supply chain guide. For AI companies such as OpenAI, India is both a large and fast-growing user market and a place to locate compute closer to users and under local data rules.

Compared with the Gulf data center race, where sovereign funds lead, India’s model mixes private conglomerates and US hyperscalers with state-level incentives. Compared with China, it has full access to Nvidia hardware but far less grid headroom. The next two years will show whether the 2026 tax holiday turns India into an export hub or mainly serves domestic demand.

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