India’s data centre market is likely to add 220 MW in 2026, taking total installed capacity to approximately 1.7 GW by year-end.According to Cushman & Wakefield, 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.Also Read: Should Budget 2026 put India’s data centre backbone at the centre of its AI ambitions?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.Live Events“The ministry of electronics and information technology (MeitY) has been proactive through initiatives such as IndiaAI, the Digital Personal Data Protection Act, and the proposed National Data Centre Policy, aimed at driving digital adoption, strengthening data governance, and creating a supportive environment for next-generation infrastructure,” said Gautam Saraf, executive MD, Mumbai & New Business, Cushman & Wakefield. “Additionally, government efforts such as strengthening the integrated national power grid to ensure reliable supply and streamlining state-level approvals for data centre development are laying the foundation for a more robust and sustainable expansion.”In 2026, a greenfield cable landing station is likely to become operational at Digha, West Bengal.According to information from TeleGeography, Mumbai and Chennai are expected to see the operationalisation of three and one cable landing stations, respectively, in 2026, significantly driving data centre growth.Data centre operators will continue to invest in edge data centres in Tier-II cities in 2026.At present, cities such as Bhubaneswar, Guwahati and Lucknow have witnessed investments. Going forward, operators are likely to increase investments in edge facilities, with a focus on lower latency and improved customer experience.“India’s data center industry is poised for exponential growth, with total capacity expected to reach 3 GW by 2030. However, by 2033, the country will require nearly 6,043 MW of capacity, while supply is projected at only 4,501 MW, leaving a shortfall of about 1,542 MW. The proposal under the Draft National Data Centre Policy to offer income tax exemptions linked to output capacity, power efficiency, and employment generation will play a crucial role in bridging this gap,” said Amit Sarin, MD, Anant Raj Ltd. Implementation of the Digital Personal Data Protection Act is expected to strengthen personal data safety, instill confidence in the digital ecosystem, and boost data centre investments.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.“The next phase will be shaped by how effectively operators combine connectivity, power security and sustainability with supportive regulation. In a market that remains structurally underpenetrated, this creates a strong opportunity for investors to build future-ready platforms that can scale with India’s digital economy and increasingly global data flows,” Saraf said.



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