Mapping India’s Data Centres: Aspirations, Realities and Futures

India is entering a new phase of digital expansion with massive investments by foreign and domestic companies in data centre development. This trend is mirrored globally as increasing digitalisation and AI innovation drive the demand for compute infrastructure.

But rapid expansion comes with complex trade-offs.

Across the world, data centres are facing growing scrutiny over their environmental and social impacts. In the United States, rising electricity demand has contributed to higher residential power costs. In the Netherlands, concerns over groundwater use have sparked protests. In Brazil, indigenous communities have challenged development proposals on ancestral land.

As India embraces data centre development, similar questions are beginning to surface, but without clear answers.

• How resource-intensive are data centres across different tiers and locations in India?
• What are the environmental and social costs of scaling AI infrastructure in the Indian context?
• Will experiences with data centres in India repeat global patterns, or throw up new conundrums?

Our Research

Through policy analysis, media review, grey literature, and expert consultations, we explored:

• The relationship between India’s national AI strategy, sustainability priorities, and data centre growth
• Where existing and upcoming data centres are located and who is building them
• The services these facilities host and their resource requirements
• How data centres are currently regulated in India
  

Key Findings

• Data centre expansion aligns closely with India’s “AI for development” agenda and is set to serve both public and private sector workloads
• Transparency around resource use remains limited
• There are early signs of speculative overbuilding
• Clear definitions of data centres and regulatory efforts are lagging at the national level
• The direct economic benefits of incentives and subsidies deployed to attract data centre operators remain unclear, especially given concerns such as tax revenue losses
  

Recommendations

• Build stronger evidence bases for policymakers, litigants, and researchers
• Support targeted research and grant-making initiatives to further critical data centre studies
• Develop India-specific sustainability standards (PUE, WUE, CUE) for data centres and stronger accountability mechanisms for data centre operators and their tenants
• Explore alternative futures for data infrastructure through scenario-building