A strategic study has identified the coastal city of Mangaluru as one of India's most promising and cost-effective locations for developing large-scale data centre infrastructure. The Mangaluru Data Centre Feasibility Study 2025 was officially released by the Karnataka Digital Economy Mission (KDEM) and the Silicon Beach Programme (SBP), in collaboration with Deloitte India.
Unbeatable Cost Economics and Strategic Positioning
The comprehensive assessment was commissioned to evaluate Mangaluru's potential role in strengthening the nation's digital backbone, particularly for cloud computing, artificial intelligence (AI), and mission-critical workloads. The findings are compelling, highlighting a significant economic advantage.
The study reports that land leasing in Mangaluru is available at approximately Rs 7.7 per square foot per month. This translates to a staggering cost benefit of 4-5 times over Mumbai and up to a 95% advantage compared to Chennai, varying by specific zone and asset class. Furthermore, energy tariffs in the region range between Rs 6 to Rs 6.6 per kWh, which is notably cheaper than Chennai's average of Rs 7.5 per kWh, outperforming most major Indian data centre markets.
A Coastal Spoke in Karnataka's Digital Hub
As India targets a national data centre capacity of 10-12 GW by the year 2030, the study positions Mangaluru strategically. It is envisioned as a vital "spoke" within a larger, distributed Bengaluru-led hub-and-spoke architecture. This model aims to create a resilient and scalable digital infrastructure network across Karnataka.
Currently, Karnataka contributes about 8% of India's total data centre capacity. Mangaluru's development is seen as crucial for supporting the state's distributed infrastructure model. The city also ranks among India's top eight emerging Global Capability Centre (GCC) hotspots, which strengthens its profile as a stable demand centre for both regional and critical digital workloads.
Leadership Insights and Future Roadmap
Announcing the study's findings, BV Naidu, Chairman of KDEM, emphasized the critical link between infrastructure and 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," he stated. He highlighted the city's industry-leading economics, resilient power grid, and deep talent pool as key factors priming it to host mission-critical operations while complementing Bengaluru's role 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 Programme, provided further context. "Mangaluru has quietly assembled all the fundamentals required for a high-capacity, future-ready data centre ecosystem," he noted, pointing to its coastal geography, grid stability, talent depth, and multimodal connectivity.
Bhat added that with KDEM's leadership, SBP's ecosystem development efforts, and Deloitte's analytical insights, the study charts a clear path forward. The goal is to unlock 1 GW of sustainable, AI-ready data centre capacity in Mangaluru. This ambition directly aligns with Karnataka's 'Beyond Bengaluru' growth narrative and the commitment to developing advanced technology clusters throughout the state.
