India’s Data Centre Investments Shift to Multiple Cities

Chennai: India’s data centre sector is seeing a shift towards investments across multiple cities during the first half of 2026. According to a recent market research report by real estate consultancy CBRE, investors are spreading their investments across different locations instead of focusing mainly on large projects in a single city.

The report said that more than 85% of the total $38 billion in investment commitments recorded during the first half of 2026 was directed towards projects spread across multiple cities. This shows that investors are once again adopting a wider investment strategy to support the growth of India’s data centre industry.

Data centres are facilities that store, process and manage large amounts of digital information. They are important for cloud computing, online services, artificial intelligence and other digital technologies. As demand for digital services continues to grow, companies are investing in new facilities to increase storage and computing capacity.

Investing in multiple cities can help companies reduce their dependence on a single location and improve the reliability of their operations. It also allows investors to take advantage of different markets, infrastructure facilities and business opportunities across the country.

Between 2021 and 2023, investments spread across multiple cities accounted for more than 60% of total investment commitments in India’s data centre sector. During this period, investors continued to focus on major markets such as Mumbai, Delhi-NCR, Bengaluru and Chennai. These cities attracted investment because of their established business networks and growing demand for digital infrastructure.

However, the trend changed temporarily in 2024 and 2025, when investment activity became more concentrated in individual locations. Hyderabad accounted for 23% of total investments in 2024 and 15% in 2025. Meanwhile, Tier-II cities attracted 16% of investments in 2024, with their share increasing to 27% in 2025.

This change was largely driven by large, standalone projects in specific locations. One example was Google’s data centre project in Visakhapatnam, also known as Vizag. Such projects attracted significant investments and increased the share of individual cities and smaller markets in the overall investment figures.

The latest figures suggest that investors are now returning to a strategy that spreads projects across several locations. This approach can help companies build stronger networks and meet the growing demand for digital infrastructure in different regions.

India added 130 megawatts (MW) of new data centre capacity during the period covered by the report. Mumbai accounted for 94% of the newly added capacity, while Chennai contributed the remaining 6%. The figures highlight Mumbai’s leading position in new capacity additions during this period.

Established data centre locations, including Navi Mumbai and Siruseri in Chennai, continue to attract a large share of new development activity. These areas remain important markets for companies looking to expand their digital infrastructure and serve businesses with growing data storage and processing needs.

Overall, the report highlights the changing investment pattern in India’s data centre industry. While major cities continue to play an important role, investors are increasingly considering opportunities across multiple locations. This strategy could support the sector’s expansion and help meet the country’s rising demand for digital services.