India's Data Centre Capacity to Triple to 6 GW by 2029 Amid AI Investment Boom

New Delhi: India's data centre industry is entering a major expansion phase, with total capacity expected to nearly quadruple from around 1.6 GW in mid-2026 to 6 GW by 2029, according to real estate consultancy JLL. The surge is being driven by the rapid adoption of artificial intelligence (AI), hyperscale cloud computing and growing demand for digital infrastructure.

The expansion is attracting investments from some of the world's biggest technology companies and Indian conglomerates, including TCS, Microsoft, Google, AdaniConneX, Nxtra by Airtel, Reliance, Meta and Amazon. Several major projects are already under development or have been announced across India's emerging technology hubs.

AI Emerges as Major Growth Driver

The rapid development of generative AI and other compute-intensive technologies is increasing demand for high-capacity data centres. AI applications require significantly greater computing power, storage and energy compared with many traditional digital workloads.

JLL's projections indicate that India's data centre market could require around $110 billion in capital investment to reach the projected 6 GW capacity by 2029. The investment requirement reflects not only construction of data centre facilities but also spending on power infrastructure, cooling systems, networking equipment and high-performance computing hardware.

The sector is already showing strong market fundamentals. Data centre absorption reached 101 MW during the first half of 2026, more than 20% above the average for the first half of the previous three years. At the same time, 85 MW of new supply was delivered, mainly in Mumbai and Chennai. Vacancy fell to around 2.8%, indicating strong demand for available capacity.

TCS Announces Rs 70,000-Crore AI Data Centre Investment

One of the biggest recent announcements has come from Tata Consultancy Services (TCS).

TCS has announced a Rs 70,000-crore investment for an AI-focused data centre campus in Telangana. The project is expected to significantly expand India's AI computing infrastructure and strengthen Hyderabad's position as a major technology and data centre destination.

The investment comes as Indian technology companies increasingly move beyond traditional IT services and build infrastructure capable of supporting large-scale AI workloads.

Microsoft Expands Data Centre Presence in Hyderabad

Microsoft has also strengthened its India data centre footprint.

The company recently launched its largest India data centre hub in Hyderabad, as part of its broader $20.5-billion investment commitment in the country. The expansion is aimed at supporting cloud services, AI workloads and India's growing digital economy.

Hyderabad's combination of technology talent, connectivity, power availability and established IT infrastructure has helped it emerge as one of the country's preferred locations for large-scale data centre investments.

Google, AdaniConneX and Nxtra Build Gigawatt-Scale AI Hub

Another landmark project is taking shape in Visakhapatnam, Andhra Pradesh.

Google, in partnership with AdaniConneX and Nxtra by Airtel, is developing a gigawatt-scale AI infrastructure hub in the city. The project involves three AI-ready data centre campuses and is expected to scale to nearly 1 GW of capacity at a single location.

Google has described the project as part of its broader $15-billion investment over five years from 2026 to 2030 to establish an AI ecosystem in India. The initiative also includes connectivity infrastructure and a long-term clean-energy strategy.

The Visakhapatnam project could help create a new major data centre hub beyond India's traditional markets and strengthen Andhra Pradesh's position in the country's AI infrastructure landscape.

Mumbai and Other Cities Remain Important Hubs

While Hyderabad and Visakhapatnam are attracting major new AI investments, established data centre markets such as Mumbai and Chennai continue to account for a significant share of India's existing capacity.

JLL expects the forthcoming capacity pipeline to be concentrated across several major markets, with Mumbai, Hyderabad, Visakhapatnam and Chennai emerging as particularly important locations. Mumbai is expected to remain India's largest data centre market, while Hyderabad and Visakhapatnam are gaining importance because of large AI-focused investments.

Gujarat and Maharashtra are also emerging as important destinations for data centre projects, helped by industrial infrastructure, connectivity and access to power.

Data Centres to Drive Wider Infrastructure Demand

The projected expansion is expected to generate demand far beyond data centre buildings themselves.

Large facilities require substantial investments in electricity generation and transmission, cooling systems, fibre-optic networks, construction, cybersecurity, networking equipment and specialised engineering services.

The growth of AI infrastructure is therefore likely to create opportunities across multiple industries, including real estate, renewable energy, power equipment, telecommunications and technology services.

Data centres are also increasingly being designed around clean-energy requirements as technology companies seek to reduce the environmental impact of their growing computing infrastructure.

India Positions Itself as Global Digital Infrastructure Hub

The expected rise from 1.6 GW to 6 GW represents one of the most significant expansions in India's digital infrastructure landscape.

The combination of AI demand, hyperscale cloud deployment, large technology investments and policy incentives is encouraging both domestic and international companies to build capacity in the country. JLL has described the transformation as a major shift in India's data centre landscape.

If the planned projects are delivered as expected, India could emerge as one of the world's important destinations for AI and cloud infrastructure by the end of the decade.

The data centre boom also highlights a broader change in India's technology economy: the country is increasingly moving from being primarily a consumer of digital services to becoming a major host and builder of the infrastructure powering the next generation of AI and cloud computing.