Hyd set to emerge as India’s 2nd largest data centre hub after Mumbai with 1.9GW pipeline

Hyderabad: With Hyderabad shifting gears from a secondary IT/ITeS-led location to a hyperscale and AI infrastructure hub, the city has more than doubled its live IT capacity to 151.4 MW by the end of 2025 from 60.9 MW in 2022, according to Knight Frank India.What’s more, Hyderabad has a committed and early-stage development pipeline of 1.9 GW, second only to Mumbai, Knight Frank said in a report, `India Data Centre Market Update 2025: Tracking Capacity, Demand and Supply Pipeline’. Mumbai’s committed pipeline expanded to 1,543.3 MW by Q4 2025, while the early-stage pipeline crossed 2,209 MW, reinforcing its position as the country’s primary hyperscale hub, it said. It already has 173MW under construction adding up to 3.9GW.The realty consulting firm said the pipeline is being driven by operator preference for large, campus-scale deployments and Hyderabad’s positioning as a cost-competitive alternative to coastal markets.It pointed out that Telangana’s push to become a global AI data centre hub, including incentives aimed at high-density graphics processing units, large-scale training compute and liquid cooling with initiatives like the govt’s Future City and AI City, is strengthening the city’s appeal for next-generation workloads.Knight Frank also cited Hyderabad’s disaster-safe geography as a site-selection advantage, with NTT and AdaniConneX aggressively expanding their footprints in the market even as global hyperscalers are stepping up their presence in the city.While Microsoft is set to launch its India South Central data centre region in Hyderabad in 2026, Amazon Web Services already operates three availability zones in Hyderabad, accounting for 46% of the city’s live IT capacity, the report said.Oracle currently delivers cloud services in Hyderabad through a colocation-based deployment and has announced plans to launch a data centre in the city to expand its capacity in India.The report said that demand dynamics are also changing. Hyderabad recorded take-up of 19.2 MW in 2024, reflecting a shift towards hyperscale-led absorption. While absorption moderated in 2025, vacancy averaged 23%, indicating the market is in a build-out phase ahead of anticipated AI-driven demand.Viral Desai, international partner and senior executive director of occupier strategy & solutions, industrial & logistics, capital markets & retail at Knight Frank India, said, “India’s data centre growth story is increasingly becoming a tale of regional specialisation.”“While Mumbai continues to anchor hyperscale deployments owing to its connectivity advantages, Hyderabad is emerging as a preferred AI infrastructure destination, and Chennai is strengthening its role as a strategic gateway for international data traffic from east. At the same time, Vizag has rapidly emerged as one of India’s most active greenfield data centre markets, attracting gigawatt-scale development proposals backed by govt support, availability of sizeable land parcels and planned subsea cable connectivity,” Desai explained.Nationally, Knight Frank said live IT capacity across India’s seven primary data centre markets surpassed 1.6 GW by end of 2025 as India added 371.5 MW of live capacity in 2025 after adding 361.6 MW in 2024, signalling a sustained, pipeline-led growth cycle.“The Indian data centre sector is no longer merely expanding — it is structurally transforming,” said Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India.“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,” he added.