India Data Center Construction Market

India Data Center Construction Market Analysis

The India Data Center Construction Market size is estimated at USD 9.38 billion in 2025, and is expected to reach USD 35.82 billion by 2031, at a CAGR of 25.03% during the forecast period (2025-2031).

The rising demand for cloud computing, the Internet of Things (IoT), and artificial intelligence (AI) has significantly escalated data generation. Consequently, this surge is fueling the necessity for an increased number of data centers in the market.

• The upcoming IT load capacity in the region is expected to reach 6000 MW by 2030, which is projected to positively impact the demand for data center racks during the forecast period.
• The construction of raised floor area for data centers in the region is expected to reach 22.9 million sq. ft by 2030 for under construction raised floor space.
• The region's total number of racks to be installed is expected to reach 1140k units by 2030. Mumbai is expected to house the maximum number of racks by 2030.
• Planned Submarine Cables: Close to 19 submarine cable systems are connecting India, and many are under construction. One such submarine cable that is estimated to start service in 2025 is Raman, which stretches over 7,028 kilometers and has landing points from Mumbai, India.

India Data Center Construction Market Trends

Tier-3 is Expected to Hold the Major Share

• In 2023, there were around 100 data centers in India with Tier 3 certification, with a cumulative IT load capacity of more than 1000 MW. Reliability and affordability are the major factors driving the country's demand for tier-3 data centers. It is projected to accelerate at a CAGR of around 11.9% to reach over 3000 MW by 2030.
• In India, Mumbai leads with a 41.6% market share in tier 3 data centers, boasting the highest IT load capacity. It's trailed by the NCR at 15.8%, Chennai at 14.8%, Bangalore at 14%, and Hyderabad at 3.4%.
• NTT Ltd leads with 15 facilities boasting a total IT load capacity of 218 MW, followed by STT Telemedia Global Data Centres with 18 facilities and 155 MW. SIFY operates ten facilities with a combined IT load capacity of 149 MW, while Nxtra manages 12 facilities with 104 MW. Reliance contributes with ten facilities totaling 78.3 MW, with the rest falling under 'Others'.
• In addition, more than 30 data center facilities are under construction, and Tier 3 standards are expected during the study period. Major players involved in tier 3 DC construction are CapitalLand India, Colt, Reliance Jio, Nxtra, STT Telemedia, and Others. Construction is projected to be concentrated in Mumbai, NCR, Bangalore, Hyderabad, and Chennai.
• For instance, in November 2022, Nxtra Data initiated the construction of a new data center in Kolkata, India. The Bharti Airtel subsidiary announced plans to invest INR 600 crore (USD 74.4 million) in crafting a 25 MW facility in West Bengal, slated for completion in 2024. This marks Nxtra Data's inaugural large-scale venture in eastern India.
• Such instances in the Indian market are expected to drive demand for Tier 3-certified facilities. This surge in demand, specifically from the Tier 3 segment, will, in turn, bolster the need for data center construction services in the years ahead.

IT and Telecom is Expected to Hold the Major Share

• Post-pandemic, cloud computing has become a pivotal technology for businesses, governments, and consumers. It serves as the bedrock for digital transformation and fosters innovation and collaboration across ecosystems. In 2021, 53% of enterprises upped their cloud usage from the year before, with a striking 84% embracing SaaS solutions.
• In July 2024, as India's cloud market gears up to a valuation of USD 20.3 billion by 2027, Sysdig emerges as the pioneer, empowering millions of Indian enterprises to make the cloud shift with data sovereignty. Renowned for its real-time cloud security solutions, Sysdig recently bolstered its cloud-native security arsenal by launching a new software-as-a-service (SaaS) region specifically for India. This move directly responds to escalating customer needs and the swift expansion of India's cloud economy.
• India is rapidly becoming a hub for cloud-first businesses, with key cloud regions sprouting up in Mumbai, Chennai, Hyderabad, and Pune. Indian Global Capability Centers (GCCs) play pivotal roles, serving as cloud engineering hubs for multinational corporations. This evolution positions India as a crucial cloud service provider (CSP) market, leading to a surge in cloud-native services tailored to Indian enterprises.
• In May 2024, Google Cloud, aligning with India's data localization norms, unveiled plans to introduce its AI-driven Security Operations (SecOps) region in Mumbai. This move allows Indian enterprises to house their Google security operations customer data within the Mumbai region. By establishing this new SecOps hub, Google Cloud aims to extend the benefits of its secure cloud infrastructure to a broader spectrum of organizations, spanning both the private and public sectors.
• Further, in February 2024, Oracle India highlighted that despite the current buzz surrounding generative AI, only 30% of business applications in India have transitioned to the cloud. This statistic mirrors the global scenario, underscoring a significant opportunity for Oracle. Recognizing this potential, Oracle has overhauled its cloud strategy in India. The tech giant is pivoting towards a more vertical approach, focusing on healthcare, BFSI, manufacturing, telecom, and education sectors. Oracle has a solid historical presence in BFSI, telecom, and the public sector.
• Regarding Telecom, India is also focusing on developing the network infrastructure nationwide. In 2023, Finance Minister Nirmala Sitharaman announced the establishment of 100 labs dedicated to creating 5G applications as part of the approved budget. In April 2024, the Department of Telecommunications (DoT) introduced an experimental licensing framework for these labs, issuing approximately 1,500 licenses. Major Indian carriers, Bharti Airtel and Reliance Jio Infocomm, have been aggressively expanding their 5G networks nationwide. As of 2024, reports indicate that 5G coverage has extended to over 700 districts in India, supported by a network of 446,000 base stations. This creates more of a need for data in the coming years. This surge in data storage demand is poised to elevate the need for data centers in the region, thereby bolstering the prospects of data center construction firms in the coming years.

India Data Center Construction Industry Overview

The Indian data center construction market is moderately consolidated. The major players in this market hold the majority of the market share. Some of the major players are AECOM, Jacobs, L&T Construction Pvt. Ltd, Turner & Townsend, and KEC International Limited.

In May 2024, Sify Technologies, a prominent data center provider in India, unveiled its ambitious strategy to construct 675 megawatts (MW) of data center capacity within the nation by 2029. Presently, the company is actively developing 250 MW of this capacity, aiming to surpass 350 MW within the next three years.

In July 2023, Reliance partnered with Brookfield Infrastructure to build data center capacity in India with an investment of INR 10 billion (USD 121.70 million). Such investments are driving opportunities for vendors in the market.

India Data Center Construction Market Leaders

India Data Center Construction Market News

• February 2024: STT GDC began constructing its third data center campus in Chennai, India. This upcoming campus will house two data centers, boasting a 50 MW IT load. The initial phase, with an 8 MW capacity, is set to be operational by September 2025.
• June 2023: NTT, a colocation provider, and Prestige Group announced a partnership to establish a 100 MW data center campus in Bangalore/Bengaluru, India. Prestige Group, a local property development company, is set to construct three data center buildings spanning 350,000 sq ft (32,500 sqm) for NTT as part of an INR 700 crore (USD 84.8 million) agreement. The first building is slated for completion within the next 12 months. The project will unfold in three phases, culminating in a total gross leasable area of one million sq ft.