India’s data centre capacity is projected to surge from 1.6 GW as of June 2026 to 6 GW by 2029, requiring approximately $110 billion in capital investment, according to a JLL report. The expansion is being driven by AI workloads and hyperscale cloud deployments, with global hyperscalers committing to building nearly 30 per cent of new capacity through self-build facilities, expected to deliver 1.4 GW by 2029.
The sector recorded 101 MW of absorption in the first half of 2026, exceeding the three-year H1 average by more than 20 per cent, while supply of 85 MW was delivered primarily across Mumbai and Chennai. Vacancy levels have dropped to a record low of 2.8 per cent, reflecting accelerated pre-committed deliveries and exceptional market fundamentals.
The Union Budget’s 20-year tax holiday for foreign cloud service providers, extended until March 2047, has attracted over $50 billion in foreign capital commitments, reshaping locations like Hyderabad and Visakhapatnam into gigawatt-scale hubs. The $110 billion capital requirement breaks down into $4 billion for real estate construction, $18 billion for mechanical, electrical, and plumbing infrastructure, and $88 billion for IT equipment.
At full build-out, the campus is expected to rank among the largest and most advanced AI infrastructure campuses in India, reinforcing Hyderabad’s position as a strategic hub for digital infrastructure alongside the broader Telangana technology ecosystem. The project is expected to generate several thousand direct and indirect jobs across power, cooling, networking, construction, and engineering.
The initiative originated from a conversation between Telangana Chief Minister A. Revanth Reddy and Tata Sons Chairman N. Chandrasekaran at Davos in January 2026, progressing to a formal agreement within months. TCS CEO K. Krithivasan described the campus as central to the company’s Infrastructure-to-Intelligence strategy, combining AI-ready infrastructure with cloud, engineering, and enterprise transformation capabilities for global customers.
