India Data Center Cooling Market Size, Share, Growth, Report 2026 to 2035

India Data Center Cooling Market Size and Growth 2026 to 2035

The India data center cooling market size was valued at USD 1.32 billion in 2025 and is expected to be worth around USD 12.95 billion by 2035, exhibiting at a compound annual growth rate (CAGR) of 25.7% over the forecast period 2026 to 2035. The market’s expansion is observed owing to massive investments done by data center operators and developers across the nation.

Report Highlights:

• By cooling type, the room-based cooling segment dominated the market with revenue share of 45% as they are widely used options due to compatibility and cost-effectiveness.
• By cooling type, the row-based cooling segment is seen to grow rapidly during the forecast period owing to its improved efficiency of reducing hotspots which is ideal for modern facilities.
• By component, the cooling units segment dominated the market with revenue share of 60% owing to its established prominence as a precision cooling equipment that remains standard across data centers in India.
• By component, the liquid cooling solutions is seen to grow rapidly with the rising adoption in hyperscale and AI workloads.
• By data center type, the colocation data centers segment dominated the market with the largest share as many Indian businesses prefer outsourcing data center to meet local data regulations.
• By data center type, the cloud data center segment is seen to grow rapidly owing to the innovation of big data and hyperscale expansions.
• By cooling technology, the air-based cooling segment accounted 62% revenue share, with its widespread legacy and adoption as most common technique.
• By cooling technology, the hybrid cooling solutions will gain momentum with rising prominence of energy efficient solutions.
• By end user, the BFSI segment accounted revenue share of 35% with its heavy reliance uptime and high density computing for digital transactions that drives the demand for robust cooling.
• By end user, the telecom & IT segment is expected to gain growth at rapid pace due to evolving infrastructure with 5G rollout for telecom networks.

What is the Outlook of India’s Data Center Cooling Market?

With India’s data center capacity projected to reach 14 GW by 2035, the government and private investors are observed to step up with efforts to attract hyperscale facilities through subsidised land and tariff rebates. As enterprises, hyperscale cloud providers, and colocation operators scale up infrastructure across major Indian markets — including Mumbai, Chennai, Hyderabad and Bengaluru, the need for advanced cooling technologies continues to intensify. Cooling systems remain critical to ensuring optimal performance, reliability, and uptime for IT workloads, especially as server densities and power loads increase.

“Accoring to PwC report, investments in data center by operators and developers are expected to reach $70 billion by FY2035.”

The market is expected to witness sustained double-digit growth over the next decade, driven by the adoption of next-generation cooling architectures such as row-based cooling, hybrid cooling systems, and liquid cooling solutions. These technologies offer superior thermal management and improved power usage effectiveness (PUE), aligning with the industry’s increasing focus on energy efficiency and sustainability.

India’s Data Center Statistics: Capacity, Consumption & Investment Data to Look in 2026

• India’s total installed data center capacity reached approximately 1,263 MW in 2025, reflecting more than a threefold increase compared to 2020, driven by hyperscale and colocation expansions.
• Operational data center floor space in India stood at around 16 million square feet in 2025 and is expected to expand to nearly 55 million square feet by 2030, directly supporting higher cooling infrastructure deployment.
• Between 2020 and April 2025, India’s data center sector attracted approximately $14.7 billion in cumulative investments, covering hyperscale, colocation, and enterprise facilities.
• Data centers currently account for approximately 2% of India’s total electricity consumption, a share expected to rise to nearly 6% by 2030 as capacity scales.
• Green-certified data center capacity in India increased from around 159 MW in 2020 to over 314 MW by 2025, indicating growing adoption of energy-efficient and sustainable cooling solutions.

India Data Center Cooling Market Dynamics

Driver

Rapid Expansion of Data Center Capacity Across India

• The primary driver of India’s data center cooling market is the rapid expansion of data center capacity fueled by cloud adoption, digital payments, AI workloads, and data localization requirements. Hyperscale and colocation operators are continuously adding high-density infrastructure, which significantly increases thermal loads and necessitates advanced, reliable cooling systems. As rack densities rise and uptime expectations remain stringent, cooling infrastructure has become a critical investment area rather than a supporting utility, directly driving market growth.

Restraint

High Capital and Operational Costs of Advanced Cooling Systems

• Despite strong growth potential, the market faces restraints due to the high upfront capital expenditure and operational complexity associated with advanced cooling technologies. Solutions such as liquid cooling, immersion cooling, and hybrid systems require specialized infrastructure, skilled workforce, and integration with existing data center designs. Additionally, cooling systems contribute significantly to overall energy consumption, and rising electricity costs in certain regions can impact return on investment, particularly for smaller and mid-sized data center operators.

Opportunity

Shift Toward Energy-Efficient and Sustainable Cooling Technologies

• The increasing focus on energy efficiency, sustainability, and cost optimization presents a significant opportunity for the India data center cooling market. Operators are actively seeking cooling solutions that reduce power usage effectiveness (PUE), lower carbon footprints, and support green data center certifications. This shift is creating strong demand for hybrid cooling, liquid-assisted cooling, advanced airflow management, and intelligent monitoring systems, opening new growth avenues for technology providers and solution integrators.

State-wise Government Initiatives, Private Investments, and Strategic Significance in India’s Data Centers:

India Data Center Cooling Market Segmental Analysis

Cooling Type Analysis

Room-based cooling segment continued to dominate the India data center cooling market in 2025 due to its widespread deployment across legacy and large-scale facilities. The ease of maintenance, proven reliability, and lower upfront investment compared to advanced cooling architectures support its continued dominance, especially in colocation and enterprise environments with moderate rack densities.

Row-based cooling is expected to grow at the fastest rate as data centers increasingly shift toward higher rack densities and energy-efficient designs. Row-based systems significantly reduce air mixing and hotspots, improving thermal efficiency and lowering power usage effectiveness (PUE). The rapid expansion of hyperscale and cloud facilities in India is accelerating adoption, as operators seek scalable solutions that can adapt to fluctuating workloads.

Component Analysis

Cooling units dominated the market in 2025 as they form the backbone of every data center cooling infrastructure. Precision air conditioners, chillers, and in-row cooling units account for the largest capital expenditure during data center construction and expansion. Given India’s hot climate and rising server loads, operators continue to prioritize high-capacity and reliable cooling equipment to ensure uptime and compliance with thermal standards.

Liquid cooling solutions are witnessing the fastest growth due to the rapid increase in rack power densities driven by AI, machine learning, and data-intensive workloads. As hyperscale operators in India optimize for energy efficiency and sustainability, liquid cooling is transitioning from a niche solution to a strategic investment.

Data Center Type Analysis

“How Did Colocation Centers Dominate the India Data Center Cooling Market?

Colocation data centers segment dominated the market in 2025 as enterprises increasingly outsource infrastructure to reduce capital expenditure and meet India’s evolving data localization requirements. These facilities operate at scale and host multiple tenants, making efficient and standardized cooling systems essential. High utilization rates and continuous expansion by colocation providers directly translate into strong demand for cooling infrastructure.

The cloud data centers segment is expected to grow the fastest, driven by surging demand for cloud computing, AI platforms, digital payments, and OTT services. Hyperscale cloud providers require advanced cooling technologies to support dense server configurations and continuous workloads. Their focus on efficiency, sustainability, and rapid scalability is accelerating adoption of next-generation cooling systems across India.

Cooling Technology Analysis

“The Air-based Cooling Held the Largest Share of the Market in 2025”

Air-based cooling segment stayed the dominant technology in 2025 due to its established presence, lower initial costs, and widespread familiarity among operators. Most Indian data centers still rely on traditional air-based systems, particularly in facilities with low to medium rack densities. The availability of skilled technicians and standardized designs further supports its continued dominance.

Hybrid cooling is growing rapidly as data center operators seek to balance performance, cost, and sustainability. By combining air and liquid or evaporative cooling techniques, hybrid systems allow operators to incrementally upgrade infrastructure without complete redesigns. This flexibility makes hybrid cooling particularly attractive for facilities transitioning toward higher densities while managing capital constraints.

End User Analysis

“The BFSI Segment Led the India Data Center Cooling Market with the Largest Share.”

The BFSI segment dominated the market in 2025 due to its heavy dependence on always-on digital infrastructure for banking transactions, payment processing, and fraud detection. Stringent regulatory requirements, data security concerns, and zero-downtime expectations compel BFSI institutions to invest in highly reliable and redundant cooling systems.

Telecom and IT is the fastest-growing end-user segment, fueled by 5G deployment, data consumption growth, and cloud-native applications. Telecom operators and IT service providers are expanding network data centers and edge facilities, significantly increasing demand for scalable and energy-efficient cooling solutions.

Recent News

• On January 23, 2026, Motivair (a Schneider Electric company) introduced the MCDU-70, a high-capacity Coolant Distribution Unit (CDU) specifically designed for the Indian and Asia-Pacific markets. Each unit delivers 2.5 MW of cooling capacity, scalable to 10 MW+, making it a critical infrastructure component for the "gigawatt-scale" AI data center campuses currently being built in Navi Mumbai and Chennai.
• In November 2025, Sify Technologies made a major business move by implementing advanced liquid cooling at its Mumbai-Rabale campus, supporting racks of up to 130 kW. By securing the NVIDIA DGX-Ready Data Center certification, Sify has positioned itself as the primary partner for enterprises looking to deploy NVIDIA's flagship AI chips (like the B200/B300) in India.

Major India-Headquartered Companies in the Data Center Cooling Sector:

• Blue Star Limited: Headquartered in Mumbai, Blue Star is India’s most recognized HVAC company and a leading supplier of precision air conditioning and large-scale cooling systems for data centers.
• Voltas Limited (Tata Group): Voltas, part of the Tata Group and headquartered in Mumbai, is one of India’s largest air-conditioning companies.
• Larsen & Toubro (L&T): L&T is India’s largest engineering and construction conglomerate and a key player in data center infrastructure execution, including cooling and mechanical systems.
• Sterling & Wilson: Headquartered in Mumbai, Sterling & Wilson is a major EPC player with a strong presence in hyperscale and colocation data center projects.
• Tata Projects: Tata Projects, part of the Tata Group, is actively involved in building data center infrastructure, including power and cooling systems.
• Kirloskar Group (Cooling & Chillers Division): The Kirloskar Group is a well-established Indian industrial conglomerate with capabilities in chillers, compressors, and industrial cooling systems.

Market Segmentation

By Cooling Type

• Room-based Cooling
• Row-based Cooling
• Rack-based Cooling

By Component

• Cooling Units
• Airflow Management Solutions
• Liquid Cooling Solutions
• Monitoring & Management Solutions
• Others

By Data Center Type

• Colocation Data Centers
• Enterprise Data Centers
• Cloud Data Centers
• Edge Data Centers
• Others

By Cooling Technology

• Air-based Cooling
• Immersion Cooling
• Hybrid Cooling

By End User

• BFSI
• Telecom & IT
• Healthcare
• Government
• Defense
• Retail & E-commerce