India Data Centre Growth: The rapid rise of artificial intelligence (AI) has completely changed India’s digital landscape. As the third-largest economy in Asia, India has now become a strategic hub for global technology investments.
At the heart of this transformation lie data centres — the backbone of our digital world. They power everything from ChatGPT queries and online banking to electric vehicles and streaming platforms. Each centre stores and processes enormous volumes of data every day, keeping millions of devices and businesses running smoothly.
Today, this silent infrastructure is gaining the attention it deserves as global tech giants invest billions in India’s data ecosystem.
💰 Google’s $15 Billion AI Data Centre in Andhra Pradesh
In a groundbreaking move, Google announced a $15 billion investment to build an AI-powered data centre in Andhra Pradesh. This marks Google’s largest single investment in India to date.
The project shows that international tech companies view India not just as a vast market but as an ideal destination for advanced infrastructure.
Google’s investment joins the efforts of other major players such as Amazon Web Services (AWS), Meta, and Reliance Industries — all racing to establish a strong presence in the Indian data centre landscape. Interestingly, even real estate developers are entering this booming sector to capture its potential.
📈 India’s Explosive Data Centre Growth
According to Jones Lang LaSalle (JLL), India’s data centre capacity is projected to grow by 77% by 2027, reaching nearly 1.8 gigawatts (GW).
Experts estimate that the total investment in this sector could rise to $25–30 billion by 2030. This growth perfectly aligns with India’s ambition to become a global digital powerhouse, supporting thousands of startups, e-commerce platforms, and AI-driven innovations.
However, this expansion also comes with challenges — particularly in the areas of energy usage and water sustainability.
🌏 Why India Is a Global Hotspot for Data Centres: India Data Centre Growth
India offers several key advantages that attract international investment:
- Low Construction Costs:
Research by Kotak Institutional Equities shows that India has one of the lowest data centre construction costs in the world, second only to China. - Affordable Electricity:
Power prices are far lower than in Western nations, reducing long-term operational expenses for energy-hungry facilities. - Skilled Workforce:
With its large pool of IT professionals, engineers, and data experts, India has the human capital needed to support this growth. - Government Support:
Programs like the Digital India Mission and data localisation laws encourage global firms to host and process data within India.
Vibhuti Garg, Director for South Asia at the Institute for Energy Economics and Financial Analysis, rightly says:
“This is another opportunity for India, just like the IT boom of the past. We must seize it wisely.”
📊 The Data Gap and Rising Demand: India Data Centre Growth
India’s situation is unique. Although it generates nearly 20% of the world’s data, it currently owns only 3% of global data centre capacity.
With rising internet usage, AI adoption, digital payments, and smartphone penetration, this gap is widening rapidly. By 2028, India could become the largest data consumer in the world, surpassing the US, Europe, and China.
The surge in AI tools — from chatbots to real-time translation apps — adds even more pressure on data infrastructure that already handles trillions of requests every day.
💧 The Environmental Challenge: Water and Energy: India Data Centre Growth
While India’s data centre revolution represents progress, it also raises serious environmental concerns — especially regarding water and power consumption.
Data centres consume vast quantities of water for cooling and electricity to power servers 24 hours a day. In countries like Chile, Mexico, and Scotland, communities have already raised objections over such resource use.
In India, the challenge could become even more severe due to limited water availability.
⚠️ India’s Water Stress Problem
The World Bank reports that India holds 18% of the world’s population but just 4% of its water resources — making it one of the most water-stressed nations globally.
Estimates suggest that water use by Indian data centres will more than double from 150 billion litres in 2025 to 358 billion litres by 2030.
Most of these centres are located in Mumbai, Hyderabad, Chennai, and Bengaluru — regions already facing water scarcity for both residents and industries.
🔊 Growing Local Concerns
Local advocacy groups have begun voicing their worries.
For instance, the Human Rights Forum criticised the Andhra Pradesh government for allocating public water to Google’s data centre in Visakhapatnam, a region struggling with water shortages.
In response, Google stated that it follows a peer-reviewed water-risk framework to assess sustainability before choosing any site. The company reiterated its commitment to responsible water and energy management.
⚙️ Policy Gaps in Water Regulation: India Data Centre Growth
Experts argue that while India has solid policies on data protection, energy use, and zoning laws, water consumption is still largely unregulated in this sector.
Sahana Goswami from the World Resources Institute (WRI) India highlighted that:
“Water use does not feature prominently in India’s data centre policies. This omission poses a high risk to long-term sustainability.”
A report by S&P Global supports this view, warning that 60–80% of Indian data centres could face severe water stress within the next decade.
🔄 Ripple Effect Across Industries
If water shortages disrupt data centre operations, the impact could cascade across industries such as banking, healthcare, and transportation — all of which rely heavily on cloud-based systems.
Goswami warns:
“If data centres shut down during peak summers due to lack of cooling water, the effects could spread through sectors critical to daily life.”
💡 Toward Sustainable Solutions for India Data Centre Growth
To address these challenges, experts recommend innovative water management strategies such as:
- Recycling treated wastewater from homes and industries for cooling.
- Using non-potable water sources instead of drinking water.
- Installing air-based or zero-water cooling systems to reduce fresh-water dependence.
Professor Praveen Ramamurthy from the Indian Institute of Science (IISc) suggests making treated water mandatory for cooling and locating new centres in low water-stress regions.
⚡ Energy Consumption: The Next Big Concern
Beyond water, energy demand is also growing at an alarming rate.
The International Energy Agency (IEA) estimates that India’s data centres now consume 0.5–1% of total national electricity, which may double to 2% soon.
Since much of India’s power still comes from coal-based plants, this could raise carbon emissions unless renewable energy adoption accelerates.
Vibhuti Garg notes:
“Some data centres have already partnered with renewable firms to reduce emissions, but stronger policies are needed to ensure long-term sustainability.”
🌱 Balancing Progress with Sustainability
India’s data centre revolution is both a technological milestone and an environmental test. As the country moves closer to becoming a digital superpower, policymakers must ensure that growth does not come at the cost of natural resources.
Investments by companies like Google, AWS, and Meta are shaping the nation’s digital future. However, the next big step is to build green, energy-efficient infrastructure that supports both economic growth and environmental balance.
As Vibhuti Garg wisely concludes:
“In the end, we must ensure that one good is not sacrificed for another.”