India’s data centre capacity additions surged 59% in H1

India’s data centre capacity additions surged 59% Y-o-Y to 258 MW IT, while absorption grew 31% Y-o-Y to 278 MW IT in H1 2026.  Mumbai (38%) and Chennai (26%) remained the dominant markets in H1 2026, collectively accounting for 64% of total absorption, where Mumbai was a combination of both large enterprise and hyperscaler, while Chennai was purely based on hyperscaler demand, according to Savills survey.  

Over 120 acres of land was transacted for data centres in H1 2026, reflecting strong growth momentum across key markets.  Hyperscalers remained the primary demand drivers, accounting for over 80% of total absorption in H1 2026.  Edge data centres witnessed reasonable absorption in Tier-II cities.  The market saw growing demand from BFSI, e-commerce, manufacturing and GCCs.

India’s data centre market continues to grow at a steady pace. Enterprises leaning more towards cloud has driven the demand through hyperscalers and neoclouds. Complimented with AI-related workloads and other policy and geographical related advantages on costs, India is emerging as one of the key data centre markets attracting significant investments from global and domestic players.

New data centre capacity additions in India surged to 258 MW IT in H1 2026, compared to 162 MW IT in H1 2025, registering an impressive 59.3% Y-o-Y growth, taking the country’s total operational stock to 1.8 GW IT. Absorption reached 278 MW IT in H1 2026, up 31.1% Y-o-Y, led by hyperscalers and colocation players, with 5G, AI and IoT adoption driving edge data centre growth across markets.

India’s operator-based data centre capacity is projected to grow from 1.8 GW IT in H1 2026 to over 6 GW IT by 2030, supported by sustained demand from cloud services, AI workloads, neocloud, and hyperscale investments. Mumbai is expected to retain its top position with over 2.5 GW IT capacity by 2030, while Hyderabad is set to emerge as the fastest-growing market, driven by large-scale hyperscale developments.

Chennai is likely to strengthen its position as a key gateway market, benefiting from subsea cable connectivity and expanding enterprise demand, while Bengaluru is expected to witness steady growth supported by its strong technology ecosystem. Expansion across Delhi-NCR, Pune, and Tier-II cities is expected to remain neutral, with key focus on expansions being with mature markets and upcoming markets like Vizag.

Over 120 acres of land was transacted for data centre developments in H1 2026, showing steady potential in key cities. Mumbai, Chennai and Hyderabad accounted for the majority of transactions, driven by expanding hyperscaler investments, cloud adoption, and rising AI-led computing demand.

The Indian data centre market continues to witness sustained growth, driven by both established operators and an influx of new funds and developers, seeking to establish a presence in this sector.

While the broader colocation market has experienced relatively moderate demand due to increasing enterprise adoption of cloud services, demand from hyperscalers and large enterprises remains strong and is expected to continue underpinning market expansion.

Furthermore, it is anticipated that demand may emerge from neocloud service providers, many of whom are actively evaluating India as a strategic destination owing to its compelling cost advantages, location agnostic nature, and expanding infrastructure ecosystem. Despite the steady market outlook, facilitation of power and suitable land parcels for data centre development remains a critical challenge across all key data centre markets in India, requiring hyperscalers and data centre operators to explore new clusters for future expansion, with the support of local governments. Significant activity is expected in Hyderabad and Mumbai, with growing momentum in other locations such as Vizag.

Can NRIs buy agriculture land and inherit in India? Please clarify. Daniel J Kokavi, Sharjah.

 Under the Foreign Exchange Management Act (FEMA), 2000, NRIs cannot directly purchase agricultural land in India. However, it may be acquired through inheritance from a resident Indian relative, by way of gift from a resident Indian relative and with special approval from the RBI which is granted only in limited cases after scrutiny of FEMA compliance and state land laws.

Is inherited property taxable?  What are the tax implications for NRIs while inheriting family property?  Madhav Bodas, Dubai.

The property inherited by way of will or intestate succession is not taxable in India. However, any subsequent income generated from the said properties will be taxable. It is also pertinent to note that if the sale of any such inherited property causes a capital gain to the seller, such capital gain will be taxable. Further, for computing the capital gain in such cases, the cost of the asset sold is considered to be the same as the cost at which the deceased person acquired the asset.”