According to Cushman & Wakefield, India’s data centre market is likely to add 220 megawatts (MW) in 2026, taking total installed capacity to approximately 1.7 gigawatt (GW) by year-end. Going forward, the National Data Centre Policy, which is still in the draft stage, though several states have implemented dedicated data centre policies, will further boost demand.
India closed 2025 with installed colocation (colo) capacity of 1.5 GW across the top seven cities, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune, following an addition of 228 MW during the year. While this is lower than the record supply addition of 270 MW in 2024, annual additions of over 200 MW continue to underscore the market’s robustness.
The National Data Centre Policy proposes a 20-year tax holiday if operators meet key milestones related to capacity addition, energy usage and job creation. It also provides for the categorisation of data centres as ‘essential services,’ and the creation of data centre economic zones (DCEZs).
Given that data centres differ from conventional real estate asset classes, the policy provides for a separate category for data centres in the National Building Code (NBC) and proposes incentives for renewable energy usage to drive sustainability in the sector. However, ensuring adequate availability of suitable land parcels and a 24×7 power supply remains a key issue to be addressed.
