Mumbai World’s Second Cost-Effective Region For Data Centre Construction In 2025, Says Turner & Townsend

Mumbai, November 6, 2025: The Asia-Pacific data centre market is undergoing a fundamental shift, moving rapidly towards high-density, liquid-cooled facilities to support surging Artificial Intelligence (AI) workloads. The 2025 data centre construction cost Index, from global professional services company Turner & Townsend, analyses the current cost per watt to build data centres in 52 markets worldwide. It ranked Mumbai as one of the most cost effective construction environments, with a cost-per-watt of just US$6.64/W, ranking as the second lowest-cost region globally (51st out of 52 markets).

While the region remains highly attractive for investment due to globally competitive construction costs in some markets, sector experts are warning that the demand for advanced AI-ready infrastructure is outstripping the capacity of local supply chains and power grids. This transition is accelerating in the Asia-Pacific market, with AI workloads projected to drive a staggering 165 per cent increase in power usage by 2030.

India in Pole Position

India is emerging as a globally attractive market for data centre investments, with Mumbai ranking as the second lowest-cost region globally for data centre construction in 2025, according to the latest Data Centre Construction Cost Index by global professional services company, Turner & Townsend.

The city’s favourable cost-per-watt figure of US$6.64/W highlights its competitive advantage India, alongside Japan and Singapore, is already among the largest data centre markets in the Asia-Pacific region after Mainland China, signalling strong potential for investment and expansion.

Power and Supply Chain Concerns

While construction costs for traditional data centres are experiencing a global average inflation of 5.5 per cent in 2025, the primary concerns for industry leaders are power availability and supply chain capacity to deliver these advanced AI data centres.

Massive Capacity-to-Data Gap: Despite producing 20 per cent of the world’s data, India holds only 3 per cent of the global data center capacity, highlighting a critical structural dependency on foreign hosting and a massive domestic growth potential.

Rack Density Leap: AI-optimized facilities are pushing rack densities up to 100–150 kW per rack (e.g., RackBank’s 80 MW facility), requiring a complete shift in design and making liquid cooling readiness mandatory.

Comparison with China: China’s electricity tariff in a key hub 10.09 US cents/kWh Shanghai) is over 50 per cent higher than India’s (6.71 US cents/kWh Mumbai), making India far more favorable for long-term operational costs. China generally maintains the lowest construction cost per Million/MW in the region, but India is extremely close and benefits from cheaper labor/land in secondary markets.

India is launching a major revival of its nuclear power sector, with a target of 100 GW of nuclear capacity by 2047 (a 12× increase) to serve as the long-term, stable energy backbone for its giga-scale digital ambitions.

Analysis of the current cost per watt to build data centres in 52 markets worldwide shows cost inflation for traditional data centres worldwide averaging 5.5 percent in 2025.

The report advises clients to review their procurement models to help strengthen the supply chains and support the delivery of urgently-needed AI data centres. Innovation will also be required to develop and deliver more energy efficient designs, and mitigate the risks of power connection delays.

Other well-established markets across the globe, particularly in the United States and Europe, make up most of the top 15. This includes Silicon Valley (US$13.3 per watt), London (US$12.0 per watt) and Frankfurt (US$11.6 per watt) – each among the largest markets in their respective regions.

Sumit Mukherjee, Managing Director for Real Estate in Asia at Turner & Townsend said: “India sits at a crucial global inflection point, with markets like Mumbai offering a potent combination of competitive construction costs,ranked the second lowest globally,and a massive projected market opportunity, with an estimated $156 billion required for regional buildout. This low-cost base provides India with a salient advantage for data centre investment. However, to fully capture the benefits of the AI transformation, developers must urgently prioritize securing reliable power and water availability, and strategically strengthen supply chains to deliver the advanced cooling technologies. The market’s rapid expansion is driven by strong demand for high-density, GPU-optimized facilities, making decisive action on innovative cooling and energy-efficient designs absolutely critical now.”

Paul Barry, Data Centres Sector Lead, North America at Turner & Townsend, said: “Data centres are increasingly at the forefront of many governments’ long-term policy ambitions and their significance is better understood and recognised – providing greater opportunities for clients in the sector. Yet our report highlights key challenges that must be addressed to avoid putting a brake on investment and the benefits of AI transformation.

“Power availability remains a critical barrier, with long-lead times for grid connection the main constraint. There is also stronger competition than ever before for power due to both increased business and consumer demand placing added pressure on grids.”

“Developers and operators must adapt quickly to the evolving market landscape. AI data centres are more advanced, larger, and by extension, costlier. They come with greater power demands and modern cooling solutions. Clients need to navigate the power conundrum with greater openness to off-grid design solutions, while also securing reliable supply chains capable of providing the technology and talent needed for this new wave of data centres.”