The data center market in India grew further in 2024, adding 191 MW of IT capacity last year, while absorption was 407 MW, according to Savills.

According to real estate consultant Savills India, the growing use of cloud computing, the growth of big data, the Internet of Things (IoT), artificial intelligence (AI), and the quick development of e-commerce and digital transformation projects are all contributing to India's ongoing demand for data centers.

Savills pointed out that the hyperscaler, BFSI (Banking, Financial Services, and Insurance), IT & ITeS, and service sectors—all of which significantly depend on data center operators for colocation and associated services—were the main drivers of this demand.

As of 2024, the operational capacity was 1,110 MW IT, representing a 22 percent compound annual growth rate (CAGR) from 2014.

With 53 percent of the overall absorption, Mumbai dominated the market.

Hyderabad came in second with 14 percent, Chennai and Pune with 10 percent apiece.

The research claims that the nation is seeing a spike in data center real estate transactions due to rising demand and expansions by hyperscalers and data center operators purchasing land in strategic areas.

More than 200 acres of land were purchased in Bangalore, Chennai, Hyderabad, Pune, and Mumbai in 2024.

"The increasing penetration of 5G and the rise in mobile application usage are driving demand for edge data centres in Tier-II and Tier-III cities such as Bhubaneswar, Patna, Lucknow, Jaipur, Kochi, Vizag, Coimbatore, Madurai, Raipur, and Hubli," said Srihari Srinivasan, Director and Lead Data Centre Services, Savills India.