Hyderabad : Hyderabad has rapidly emerged as one of India’s fastest-growing data centre markets, transitioning from a secondary IT/ITeS-led node into a strategic hyperscale and AI infrastructure hub. The city’s live capacity has more than doubled from 60.9 MW in 2022 to 151.4 MW by end-2025, while its pipeline of committed and early-stage projects aggregating 1.9 GW is second only to Mumbai, driven by strong operator preference for large, campus-scale deployments according to Knight Frank India’s latest report, India Data Centre Market Update 2025: Tracking Capacity, Demand and Supply Pipeline.
Telangana’s ambition to become a global AI data centre hub through incentives for components such as high-density graphics processing units (GPUs), large-scale training compute, and liquid cooling is positioning Hyderabad as a strategic alternative to other, more expensive coastal hubs in the country. Its disaster-safe geography is a key site-selection advantage, with NTT and AdaniConneX aggressively scaling their data centre footprints in the city.
| Markets | 2025 | 2016 | CAGR |
| Mumbai | 766.6 | 96.8 | 26% |
| Chennai | 191.5 | 27.4 | 24% |
| New Delhi | 174.5 | 22.3 | 26% |
| Bengaluru | 169.5 | 77.6 | 9% |
| Pune | 145.3 | 31.4 | 19% |
| Hyderabad | 151.4 | 37.1 | 17% |
| Kolkata | 23.1 | 3.9 | 22% |
Source: Knight
Hyderabad’s data centre capacity across development stages (in MW)
| Period | Live Capacity | Under Construction | Committed | Early Stage |
| 2021 | 47.9 | 22.0 | 159.5 | 156.0 |
| 2022 | 60.9 | 56.6 | 251.1 | 326.0 |
| 2023 | 102.9 | 69.2 | 294.5 | 950.0 |
| 2024 | 145.2 | 32.7 | 384.7 | 1,054.0 |
| 2025 | 151.4 | 32.7 | 633.5 | 1,299.0 |
A key inflection in the market is the growing presence of global hyperscalers. Microsoft is launching its India South Central data centre region in Hyderabad in 2026, while AWS operates three availability zones in the city, anchoring hyperscale demand. AWS holds 46% market share of live IT capacity in the city. Oracle operates its cloud services in Hyderabad via a colocation-based deployment but has announced plans to launch data centre in Hyderabad to expand its data centre capacity in India. This presence of global cloud players reinforces Hyderabad’s emergence as a credible hyperscale hub.
The demand profile in Hyderabad has also shifted. While historically driven by IT/ITeS, the city witnessed record-high take up of 19.2 MW in 2024, signalling a shift toward hyperscale dominance. While absorption moderated in 2025, vacancy rates averaged 23%, indicating the market is in a build-out phase as it gears up for AI-driven demand.
India’s data centre market has entered a defining phase of expansion, with live IT capacity across the country’s seven primary markets surpassing 1.6 GW by the end of 2025, according to Knight Frank India’s latest report, India Data Centre Market Update 2025: Tracking Capacity, Demand and Supply Pipeline.
The sector, which has evolved from a fragmented infrastructure ecosystem into a strategic institutional asset class over the last decade, is now witnessing unprecedented momentum driven by artificial intelligence (AI), cloud adoption, enterprise digitisation and regulatory-led data localisation requirements. India added 371.5 MW of live capacity in 2025 following a substantial 361.6 MW addition in 2024, highlighting the transition toward a sustained, pipeline-led growth cycle.
Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India said “The Indian data centre sector is no longer merely expanding — it is structurally transforming into one of the foundational pillars of the country’s digital economy. AI-led workloads, hyperscaler investments, sovereign data requirements and cloud adoption are collectively accelerating demand for high-density digital infrastructure across India. What distinguishes the current cycle is the sheer depth of the development pipeline and the strategic diversification into emerging corridors beyond traditional hubs”.