Mangaluru offers strong foundation for cost-efficient data centre operations, says study

With competitive land leasing rates and energy costs, well below those in Chennai and Mumbai, Mangaluru offers a strong foundation for cost-efficient data centre operations, according to Mangaluru Data Centre Feasibility Study 2025, released on Friday.

The study is the joint initiative of Karnataka Digital Economy Mission (KDEM), Silicon Beach Program (SBP) of Mangaluru, and Deloitte India.

Mangaluru emerges as a promising hub in Karnataka’s data centre ecosystem. Its growing base of IT professionals, expanding Global Capability Centres (GCCs), and increasing AI adoption further underscore its readiness to attract next-generation data investments, the study said.

Mangaluru region offers land leasing at ₹7.69 per sq ft per month, offering up to a four to five times cost advantage (less) over Mumbai and up to 95% advantage over Chennai, depending on zone and asset class. Paired with energy tariffs of ₹5.95 to ₹6.60/kWh cheaper than Chennai’s ₹7.50, outperforming most major markets, the report said.

Lower land leasing costs and competitive power tariffs together translate into a materially lower total cost of ownership (TCO), enabling operators to achieve faster break even and sustain higher long-term returns compared to metro-heavy deployments, the report said.

“These fundamentals, combined with high grid reliability and assured industrial water availability, create a strong and scalable foundation for next-generation compute infrastructure,” it said.

The report said that Mangaluru ranks among India’s top eight emerging GCC hotspots, strengthening its role as a stable demand centre for regional and mission-critical workloads.

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, Mangaluru cluster of KDEM and founding-member SBP, said: “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 SBP’s ecosystem development, and Deloitte’s insights, this study charts a clear road map 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.”