As the financial capital of India, Mumbai is emerging as one of the most cost-efficient destinations globally for building data centres, strengthening India’s appeal as a major hub for digital infrastructure, according to a KPMG report.
The report ranks Mumbai as the world’s second most cost-effective location for data centre construction, with building costs in major Asian markets such as Singapore and Tokyo estimated to be almost twice those in Mumbai.
“India has a clear edge over other major commercial markets such as Singapore and Tokyo where the costs are nearly double that of Mumbai,” the report said.
The cost advantage comes as demand for data storage and processing infrastructure accelerates, driven by cloud computing, artificial intelligence, streaming services and the expanding digital economy.
India’s Data Centre Capacity Expands Rapidly
KPMG estimates that annual additions to India’s data centre capacity increased around 2.4 times, from approximately 778 MW in FY23 to nearly 1,900 MW in FY26.
The increase reflects sizeable long-term commitments from hyperscale cloud companies, with new facilities being developed and commissioned in phases.
“Unlike other markets, India offers a unique combination of cost efficiency, availability of land and power at scale, and a rapidly improving infrastructure network that can support long-term capacity ramp-up,” KPMG said.
For Mumbai, the availability of established connectivity, enterprise demand, digital infrastructure and access to power makes the city particularly important to the country’s data centre ecosystem.
Power and Talent Add to India’s Advantage
India’s relatively competitive electricity costs and growing renewable energy base are also supporting its position. The country had reached 500 GW of installed power capacity by mid-2025, with renewable sources accounting for around half of the total.
The availability of technology talent is another advantage. KPMG estimates software engineer salaries in India at about USD 20,000 annually, while hiring for artificial intelligence roles has been increasing by approximately 33% year-on-year.
Market Could Quadruple by 2030
India’s data centre market is projected to expand from around USD 1.7 billion in FY26 to $6.8 billion by FY30. Its share of global data centre capacity is also expected to rise from approximately 2-3% to nearly 5% during the same period.
The sector is undergoing a shift in its growth drivers. While domestic enterprises, banking and financial institutions and telecom operators historically accounted for much of the demand, hyperscale cloud providers, global content companies and AI-focused businesses are increasingly driving new capacity requirements.
India’s growth potential remains substantial because the country currently generates around one-fifth of the world’s data but hosts only 2-3% of global data centre capacity, according to KPMG.
For Mumbai, this gap could translate into further investment in large-scale digital infrastructure, reinforcing the city’s role as a critical gateway for India’s cloud, AI and data-driven economy.
Source: The Tribune
