India’s data centre boom accelerates as capacity additions jump 59% in H1 2026

India’s digital infrastructure story is entering a new phase, with data centres emerging as one of the country’s fastest-growing real estate asset classes. Fresh industry data shows that operational capacity, investor interest and land acquisitions are all moving at record pace, reinforcing the sector’s importance in India’s infrastructure landscape.

According to a new report by Savills India, the country added 258 MW IT of new data centre capacity during the first half of 2026, representing a 59.3% year on year increase from the same period last year. Total operational capacity has now reached 1.8 GW IT, reflecting sustained demand from hyperscalers, cloud providers and large enterprises.

The report also revealed that 278 MW IT of capacity was absorbed during H1 2026, marking a 31.1% annual increase. More than 80% of total absorption came from hyperscale operators, highlighting the growing role of artificial intelligence, cloud computing and enterprise digital transformation in shaping infrastructure demand.

Mumbai remained India’s largest data centre market, accounting for 38% of total absorption, while Chennai followed with 26%. Together, both cities contributed nearly two thirds of the country’s leasing activity during the six month period. On the supply side, Mumbai also led new capacity additions with a 55% share, followed by Chennai and Hyderabad. Tier II cities contributed around 7% of new supply, indicating that developers are gradually expanding beyond established hubs.

The sector’s growth is also driving significant land transactions. The report noted that more than 120 acres of land changed hands across major markets during H1 2026 for upcoming data centre developments. However, access to reliable power infrastructure and suitable land continues to remain the biggest challenge for developers as demand continues to rise.

Investor confidence remains equally strong. Cushman & Wakefield’s Q2 2026 Capital Marketbeat report found that data centres accounted for 40% of all institutional real estate investments during the second quarter, making them the second largest investment category after office assets. The shift reflects growing confidence in digital infrastructure as a long term income generating asset.

Industry experts expect the momentum to continue. Savills projects India’s operational data centre capacity will exceed 7 GW IT by 2030, driven by rapid AI adoption, cloud migration, data localisation requirements and continued enterprise digitisation. Capacity additions and absorption are both expected to cross 600 MW IT during 2026, with Hyderabad, Mumbai and several emerging cities expected to lead future expansion.

The latest figures underline how data centres are becoming far more than specialised industrial facilities. They are increasingly shaping land acquisition strategies, power infrastructure planning and institutional investment decisions across India’s commercial real estate market.