Some $700m (£480m) is expected to be injected into the Indian hotel industry over the next three to four years, says a study from agent Jones Lang LaSalle.
"Recent economic recovery and improved hotel performance has drawn the attention of Indian and international chains," said Nick Marsh, executive vice president of Jones Lang LaSalle Hotels.
"Hotel development has taken off with approximately 7,800 rooms under construction across the country."
Future growth is expected to be driven largely by cities such as Mumbai (formerly Bombay) and Chennai.
But the increase in the number of hotel rooms is expected to be put pressure on occupancy levels and room rates.
At the moment, occupancy levels in the five-star market are running at nearly 67% in Mumbai, 56.5% in Delhi, and 64% in Chennai.
The full report is due to be published on the Jones Lang LaSalle Web site this month.
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Jones Lang LaSalle Hotels