Mumbai ranks second-cheapest city worldwide for data centre construction

India has strengthened its position as one of the world’s most attractive destinations for data centre investment, with Mumbai ranking as the second-lowest-cost location globally for data centre construction in 2025, according to the latest Turner & Townsend Data Centre Construction Cost Index.

The report places Mumbai 51st out of 52 global markets assessed, with a construction cost of just USD 6.64 per watt, making it one of the most cost-effective markets for developers and investors. The ranking measures the cost per watt required to build data centres, with the first position representing the highest cost and the 52nd the lowest. Mumbai’s near-bottom ranking underscores its exceptional affordability compared to other international data centre hubs, as reported by Press Trust of India.

The cost advantage gives India a strategic investment edge, with construction costs significantly lower than major global markets such as Tokyo, Singapore, and Zurich, where prices per watt are at least twice as high. The city’s competitiveness is further enhanced by a low electricity tariff of 6.71 US cents per kWh, more than 50 per cent cheaper than Shanghai, substantially reducing operational expenditure.

Despite accounting for 20 per cent of global data generation, India currently hosts only 3 per cent of the world’s data centre capacity, exposing its reliance on overseas infrastructure and signalling immense potential for domestic expansion. India, along with Japan and Singapore, is already among the leading data centre markets in the Asia-Pacific region, following Mainland China. Industry estimates suggest the country will require USD 156 billion in investment to meet its projected regional buildout needs.

However, the report cautions that securing reliable power and strengthening supply chains remain key challenges for sustained growth. The analysis also found that the average global cost inflation for data centre construction is expected to reach 5.5 per cent in 2025, prompting calls for a reassessment of procurement strategies to bolster supply resilience and accelerate the deployment of AI-driven data centres.

Turner & Townsend further recommends prioritising innovation in energy-efficient designs to reduce environmental impact and mitigate risks linked to power connection delays, ensuring that India can maintain its momentum as a leading, cost-competitive data centre hub.