India wants to become a global data centre hub, and the opportunity is enormous. Google, Meta, Amazon and Microsoft are committing billions of dollars, states are competing for projects, and the government expects the sector to attract nearly $200 billion of investment over the coming decade. But behind this digital gold rush lies a question that cannot be postponed: do our cities have enough electricity, water and grid capacity to support it?
India’s data centre capacity has already risen from around 520 MW in 2020 to nearly 1.5 GW today. By 2030, it could touch 6.5 GW. Electricity consumption by these facilities is projected to jump from about 13 TWh in 2024 to roughly 57 TWh by 2030. Artificial intelligence alone could add another 6.3 GW of power demand by 2031-32.
The numbers look impressive until we place them beside the realities of our cities.
A 100 MW data centre can consume about 2 million litres of water every day, largely for cooling. India’s data centres used an estimated 150 billion litres in 2024-25. By 2030, that could cross 358 billion litres annually.
Now consider where many of these projects are being built. Rajasthan already extracts groundwater at 147.11% of annual recharge. Telangana has districts under groundwater stress. Hyderabad saw groundwater levels fall sharply during the summer of 2024. Mumbai’s reservoirs were at only 44.5% of capacity in March 2026.
These are not distant environmental concerns. They affect drinking water, agriculture and the daily lives of millions.
Power presents an equally serious challenge. Maharashtra recorded peak demand of 27,230 MW in April 2026, its highest ever. Renewable power is expanding rapidly, but transmission is struggling to keep pace. India curtailed around 300 GWh of renewable electricity in the first quarter of 2026 because the grid could not absorb it, while about 20 GW of renewable projects face connectivity delays of more than 4 months.
Data centres also generate enormous heat. Research cited in the article suggests they can raise land surface temperatures by an average of around 2°C within a 10-km radius, with extreme cases reaching much higher. In cities already battling brutal summers, adding more heat has consequences for cooling demand, electricity use and public health.
Yet state policies remain inconsistent. Some offer cheap power, tax breaks and fast-track approvals without binding requirements on water consumption, renewable energy or heat management. Maharashtra, for instance, reduced its renewable-energy requirement for core data-centre operations from 100% to 51% in June 2026.
India does not need to slow the data centre boom. It needs to make it smarter.
A national framework should set minimum standards for renewable energy sourcing, water-use disclosure, grid planning, heat management and environmental assessment. Coastal projects should explore greater use of seawater cooling where feasible. Battery storage and better transmission planning can help match renewable power with round-the-clock demand.
Data centres will be essential to India’s AI and digital future. But the cloud is not weightless. Every search, transaction and AI query eventually lands in a physical building that consumes electricity, water and land.
India should build those buildings. But it should do so without making citizens pay for digital growth through higher power costs, depleted water tables and hotter cities.
