What are the future projections for India’s data center market by 2026?

By 2026, India’s data center market is poised to double its current live capacity, reaching around 1,645 MW—a significant jump from 835 MW in 2023. Alongside this 2x growth in power capacity, the total floor area for data centers is expected to expand by an additional 10 million sq. ft. This surge aligns with increased internet penetration surpassing 900 million users nationwide and the adoption of 5G and edge computing solutions.

The hyperscale segment—driven by cloud providers like AWS, Microsoft Azure, and Google Cloud—will remain a key growth engine, forging large-scale facilities to cater to BFSI, e-commerce, and AI-driven workloads. Concurrently, data localization regulations under the proposed Data Protection Act will force more global firms to store and process data within India, adding to the demand for local infrastructure.

Investments are projected to hit USD 5.7 billion over the next few years as institutional players—global REITs (Real Estate Investment Trusts), private equity firms, and specialists—diversify their portfolios. In short, the 2026 outlook underscores the rising importance of data centers as a core asset class within India’s commercial real estate sphere.