Market Radar India: The great infrastructure and tech surge

The Macro View

India’s economic activity witnessed a notable acceleration in February 2026, driven by improved sentiment after the US slashed tariffs on Indian goods from 50% down to 18%. The manufacturing purchasing managers’ index (PMI) jumped to 57.5 from 55.4 in January, pulling the composite index up to 59.3.

However, the international trade landscape has just experienced a dramatic pivot. Following the US Supreme Court's invalidation of President Donald Trump's emergency tariffs, Trump has announced a temporary 10% duty on all nations, with promises to raise it to the 15% statutory maximum.

Consequently, an Indian delegation cancelled a recent trip to Washington intended to finalise an interim trade pact. Despite this turbulence, Trade Minister Piyush Goyal confirmed on Tuesday that India will resume talks as soon as there is more clarity, signalling a resilient intent to secure a deal.

In a notable geopolitical shift, Goyal also stated India is open to taking a calibrated approach to allowing Chinese investments, potentially easing ties strained since 2020.

Simultaneously, the Indian government has announced an ambitious infrastructure monetisation programme, targeting INR 16.7 trillion (USD 183.8 billion) over the next five years.

This asset monetisation pipeline relies heavily on the country's 146,560 kilometre-long highway network and aims to fund almost double the value of infrastructure using public-private partnerships, with nearly INR 2 trillion expected to be raised via public offerings.

The AI & Data Centre Boom

India is rapidly transforming into a global hub for digital infrastructure, with its installed data centre capacity reaching 1.3 gigawatts last year - nearly triple the figure from 2020.

This surge is heavily incentivised by domestic policy: the Reserve Bank of India (RBI) mandates that financial institutions retain client data within the country, and foreign owners of data centres will enjoy a tax holiday until 2047. Additionally, electricity costs for these facilities can be about a fifth lower than in America.

The scale of corporate investment is staggering. The Adani Group announced plans to invest USD 100 billion by 2035 to establish renewable energy-powered, AI-ready data centres, catalysing a broader USD 250 billion AI infrastructure ecosystem.

Simultaneously, Yotta Data Services is investing over USD 2 billion to deploy 20,736 Nvidia Blackwell Ultra GPUs at its 60MW facility in Noida, establishing APAC’s largest Nvidia DGX Cloud cluster.

Adding to this momentum, OpenAI will become the first customer of Tata Consultancy Services' (TCS) data centre business, beginning with 100 megawatts of capacity, as part of TCS's larger USD 7 billion investment into a 1 gigawatt unit.

GCCs and Warehousing

The commercial real estate landscape is experiencing structural redefinition. Global Capability Centres (GCCs) have moved beyond mere cost-arbitrage, transitioning into globally integrated research hubs that can drive up to 50% of India’s office space demand across top markets.

While US firms have accounted for close to 70% of GCC leasing activity since 2020 - largely dominated by technology firms - occupier diversification is accelerating. Driven by evolving trade agreements, EU companies are expanding their footprint, dedicating roughly 60% of their space to engineering and manufacturing, while UK demand is led by BFSI and consulting firms.

However, the most dramatic shift is in industrial real estate. Warehouses have beaten offices to become the hottest realty bet for institutional capital. Total warehousing stock reached 610 million square feet in 2025, with occupiers overwhelmingly preferring Grade A facilities (which captured 80% of leasing volume).

Investors are seeking stable, long-term returns from large logistics platforms, which are increasingly being prepared for REIT or InvIT listings. With warehouse automation projected to leap from 4% in 2024 to 76% by 2030, this sector sits squarely at the intersection of capital markets and national logistics planning.