Mangaluru emerges as India’s next cost-efficient data centre hub, study finds

Mangaluru, known for its strategic coastal location, port connectivity, power infrastructure and a growing technology ecosystem, is emerging as a potential destination for large-scale digital infrastructure in India, according to the Mangaluru Data Centre Feasibility Study 2025.

The study was conducted by the Karnataka Digital Economy Mission (KDEM), in collaboration with the Silicon Beach Program and Deloitte India.

It examines Mangaluru’s role in supporting India’s expanding digital backbone for cloud computing, AI and mission-critical workloads, at a time when the country’s total data centre capacity is projected to reach 10-12 GW by 2030.

The report positions Mangaluru as a strategic “spoke” within a Bengaluru-led hub-and-spoke architecture, enabling decentralised compute, low-latency services, and stronger disaster recovery and business continuity capabilities.

According to the study, land leasing rates in Mangaluru average around Rs 7.69 per sq ft per month, offering a four to five times cost advantage over Mumbai and a significant advantage over Chennai, depending on location and asset type. Power tariffs range between Rs 5.95 and Rs 6.60 per kWh, lower than Chennai’s approximately Rs 7.50 per kWh and competitive with other major data centre markets.

These economics help reduce the total cost of ownership for operators, improving breakeven timelines and long-term returns, particularly for large-scale and AI-intensive deployments. The report also highlights high grid reliability and assured industrial water availability as important strengths.

Announcing the findings, B. V. Naidu, Chairman, KDEM, said: “Infrastructure is the backbone of digital leadership. This study confirms that Mangaluru offers the right combination of capability, control, and cost to support India’s next decade of AI and cloud-led growth. With industry-leading economics, a resilient grid, and a deep talent base, Mangaluru is primed to host mission-critical workloads while complementing Bengaluru’s position as India’s digital nerve centre.”

Rohith Bhat, Lead Industry Anchor for the Mangaluru cluster at KDEM and a founding member of the Silicon Beach Program, added: “Mangaluru has quietly assembled all the fundamentals required for a high-capacity, future-ready data centre ecosystem, from coastal geography and grid stability to talent depth and multimodal connectivity. With KDEM’s leadership, the Silicon Beach Program’s ecosystem development, and Deloitte’s insights, this study charts a clear roadmap for unlocking 1 GW of sustainable, AI-ready data centre capacity. This aligns directly with Karnataka’s Beyond Bengaluru growth story and our commitment to developing future-ready technology clusters across the state.”

The study identifies several long-term demand drivers for decentralised compute infrastructure. Across major southern states, mobile subscribers are projected to exceed 31 crore by 2030, while monthly data consumption is expected to nearly double to 14,889 petabytes.

It also cites around $240 million in Global Capability Centre-related acquisitions, along with growing nano-GCC activity across BFSI, RegTech and FinTech sectors.

Mangaluru currently ranks among India’s top eight emerging GCC locations. On the infrastructure side, the region offers around 1,000 acres of land in Balkunje and approximately 164 acres within the Mangaluru Special Economic Zone, suitable for large-scale developments under prevailing lease frameworks.Its location in Seismic Zone III and elevation of 20–50 metres above sea level help mitigate seismic and climate-related risks.

Karnataka’s grid includes 107 substations ranging from 66 kV to 400 kV, with zero unmet peak demand recorded in recent years, alongside significant additions of renewable energy capacity.

The talent ecosystem further supports long-term viability, with the Mangaluru–Udupi belt hosting about 25,000 IT professionals and producing over 20,000 STEM graduates annually.