India’s data centre market is growing at record speed. Installed capacity has nearly tripled since 2020 and could reach up to 6.5 GW by 2030. A new white paper by Systemiq and the Council on Energy, Environment and Water (CEEW) examines what this growth means for energy, water and climate resilience, and what must change to ensure it is sustainable.
With the current tech boom, India has a narrow window to embed resilience into its data centre expansion before resource pressures lock in for decades.
India is undergoing a structural digital shift. Cloud adoption, AI workloads, 5G rollout and data localisation rules are driving rapid investment. Between 2019 and 2025, committed investments reached around USD 95 billion and are expected to exceed USD 100 billion by 2027.
But data centres are energy- and water-intensive. In 2024, they accounted for around 0.5% of national electricity consumption and used approximately 150 billion litres of water. Both figures are projected to more than double by 2030. Cooling a single 100-MW hyperscale facility can require around 2 million litres of water per day.
What the research highlights
The study combines global evidence with consultations across 24 stakeholders, including operators, cloud providers and renewable energy developers. Three findings stand out.
- Power reliability comes first.
Electricity accounts for 60 – 70% of operating costs. Even short outages can trigger financial penalties. Diesel backup remains common, although battery storage systems are starting to play a larger role. - Renewables are possible, but face barriers.
Up to 80% renewable supply is technically achievable through diversified solar and wind portfolios combined with battery storage. However, grid congestion, regulatory hurdles and unclear revenue models for storage slow adoption. - Water risk is underestimated.
India faces structural water stress, yet many stakeholders perceive water risks as manageable. Globally, 43% of data centres operate in high water-stress areas. As AI increases computing density, cooling demands will rise.
The report highlights the need for integrated land-water-energy planning when selecting sites for new facilities.
India does not yet have a binding national data centre policy. Instead, 15 states offer incentive-led frameworks, often focused on tax breaks and power concessions. Only a few explicitly embed sustainability measures.
Compared with regions such as the EU, where reporting and efficiency standards are becoming mandatory, India’s approach remains largely incentive-driven rather than performance-based.
A roadmap for sustainable scale
Systemiq partnered with CEEW to assess how prepared India’s data centre ecosystem is for rapid scale-up. The report outlines practical actions: clearer sustainability standards, improved grid integration for storage, better spatial planning, and stronger coordination between national and state policies.
As AI adoption accelerates, pressure on electricity grids and water systems will grow. Early policy clarity and integrated planning can help India position itself as a resilient, resource-efficient digital infrastructure hub.
Click the button below to download the full report, Scaling India’s Data Centre Ecosystem: Stakeholder Perspectives on Infrastructure, Energy, and Resilience, to explore the findings and recommendations.
