India’s Tier 2 and 3 cities to be next data centre powerhouses

• The days when Bengaluru, Delhi, and Mumbai were solely at the heart of the data economy are fading.

India’s digital backbone is getting a powerful boost from tier 2 and 3 cities. Until now, these smaller urban hubs have only hosted about 6 per cent of the nation’s total data centre capacity—roughly 82MW.

But dramatic change is around the corner: reports predict this figure will vault to between 300 and 400MW by 2030, marking a transformative shift in the data landscape.

As India’s total data centre capacity races past the 4,500MW threshold by 2030, the importance of decentralising digital infrastructure comes into focus. The days when Bengaluru, Delhi, and Mumbai were solely at the heart of the data economy are fading.

New contenders like Kochi, Mohali, Jaipur, and Indore are rapidly climbing the ranks, emerging as key drivers of edge computing, storage, and innovation.

These up-and-coming cities are no longer just supporting cast members in India’s digital play—they’re rewriting the script on what “digital India” means. Behind this wave are pro-business government policies, the need for localised data processing, and a nationwide shift toward decentralisation for greater efficiency and resilience.

Why these cities?

There’s a genuine upside for data players expanding beyond the big metros:

• Lower operational costs and friendlier business climates
• Proximity to end-users, slashing latency for local content and services
• Easier access to land and resources (though not without their own challenges)

But it’s not all smooth sailing. To thrive, these cities need nimble and reliable infrastructure. That’s where modular, pre-engineered data centres come in—especially when you’re dealing with confined space, complex cooling demands, and occasional resource constraints.

Technologies like liquid cooling and AI-driven airflow management are fast becoming the norm in these new data hubs. The move is less about sheer scale, and more about productivity, uptime, and eco-friendliness.

With AI and high-performance computing placing fresh demands on infrastructure, innovations in energy use—such as smart power controls and real-time monitoring—are rising to meet both performance and sustainability targets.

What’s unfolding now is a new chapter in India’s digital tale, where growth and opportunity are not confined to the nation’s largest cities. These regional centres are stitching together a more inclusive and adaptable network, supporting untapped markets and helping bridge the digital divide.