Mumbai Leads Data Centre Sector as AI and Cloud Demand Surge

Mumbai continues to lead India’s data centre sector, holding nearly 50% of the country’s total data centre capacity, according to a report by Avendus Capital. The report also states that Mumbai is expected to account for 47% of all additional data centre capacity planned in India over the next five years.

The city remains the country's largest data centre market due to several advantages. These include a strong road network, developed fibre infrastructure, reliable power availability and the presence of submarine cable landing stations. The report also highlights high demand from the banking, financial services and insurance (BFSI) sector, Mumbai’s role as a major communications hub and the absence of major natural hazards as key factors supporting its position.

According to the report, Mumbai currently has a total data centre capacity of 801 MW. The city also recorded a net absorption of 153 MW, reflecting continued demand for data centre space.

India’s data centre industry is witnessing rapid growth as demand for artificial intelligence and cloud-based services increases. Cities that are considered major technology centres are seeing a sharp rise in the need for digital infrastructure. This growth has also created new economic opportunities.

Data centres have become increasingly important as organisations require more computing power to support cloud services and AI workloads. The report notes that these facilities are now a critical part of the country’s digital infrastructure.

The study found that digital infrastructure in India remains highly concentrated. Nearly 98% of the country’s installed data centre capacity of 1,650 megawatts (MW) is located within the seven largest regional markets.

Mumbai and Chennai are leading this growth. Both cities benefit from a dense submarine cable ecosystem, which helps provide low-latency international connectivity. This advantage has helped them emerge as major destinations for data centre development.

Chennai ranks second in India’s data centre market after Mumbai. Other cities that continue to attract data centre investments include Bengaluru, Pune, Delhi-NCR and Kolkata.

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