Mega Data Centres: India's Digital Dream vs Environmental Reality

Introduction

Data centres are specialized facilities that store, manage, and process large volumes of electronic data. They house critical IT infrastructure including servers, storage devices, networking equipment, and systems for cooling, power supply, and security. These centres are essential for modern digital operations ranging from cloud computing to artificial intelligence applications.

Current Landscape in India

Key Statistics

• Total data centres: Around 150 across India
• Market share: Mumbai accounts for over 50% of India's data centre capacity
• Emerging hubs: Ahmedabad, Pune, Visakhapatnam
• Global position: India accounts for nearly 20% of world's data but has only about 3% of global data-centre capacity
• Internet users: Over 1.03 billion active users
• UPI transactions: Around 22 billion per month

Key Drivers of Growth

1. Rapid Digitalisation and Data Generation

• E-governance, e-commerce, digital payments driving massive data creation
• Major infrastructure gap between data generation and storage capacity

2. Artificial Intelligence and Cloud Computing

• AI-dedicated capacity projected to rise from ~275 MW to 6,546 MW by 2030
• Total operational capacity could reach nearly 12 GW

3. Government Policies and Incentives

• States offering subsidised land, electricity, stamp-duty exemptions, tax reimbursements
• Gujarat Data Centre Policy 2026-29: Targets ₹6 lakh crore investment and 7.5 GW capacity
• Andhra Pradesh: Plans ~5 GW capacity in Visakhapatnam

4. Major Investments

5. Data Localisation Requirements

• Data protection requirements encouraging domestic facilities
• Reduces dependence on foreign infrastructure

Environmental and Social Concerns

Water Stress

• Data centres require large quantities of water for cooling
• A 1 MW facility may consume about 25.5 million litres annually
• Location and cooling technology are critical factors
• Can worsen shortages in water-stressed cities

Electricity Grid Pressure

• AI data centres projected to add nearly 26.3 GW of power demand by 2031-32
• Variable and "spiky" loads could cause transmission congestion
• Threat to grid stability with sudden withdrawal of 1-1.5 GW
• Data centre electricity demand could account for about 7% of India's total demand by 2040

Environmental Impact

• Heavy electricity consumption may increase dependence on fossil fuels
• Diesel generators contribute to emissions and noise
• Construction impacts ecological damage

Limited Local Employment

• Capital-intensive but not labour-intensive after construction
• Consumes substantial land, water, power while creating relatively few permanent jobs
• Questions about proportionate benefits to local communities

Transparency and Public Consultation Issues

• Unclear water-use figures
• Inaccessible environmental filings
• Inadequate public hearings
• Confidential agreements

Constitutional and Legal Framework

• Environmental Impact Assessment (EIA): Required for major infrastructure projects
• National Green Tribunal (NGT): Handles environmental disputes
• Public Consultation: Mandatory under environmental laws
• Right to Information: Enables transparency in project approvals

Recommended Measures

1. Transparent Resource Disclosure

• Public disclosure of independently verified estimates of water consumption, power demand, cooling requirements, emissions, and waste generation

2. Mandatory Public Consultation

• Local communities, municipal bodies, and environmental groups should be consulted
• Project documents and impact assessments in public domain

3. Water-Sensitive Planning

• Prioritise treated wastewater and closed-loop cooling
• Rainwater harvesting and water-efficient technologies
• Avoid drinking-water sources and water-stressed reservoirs

4. Strengthened Environmental Assessment

• Comprehensive cumulative impact assessments
• Evaluate risks to forests, wildlife habitats, reservoirs, air quality, and residential areas

5. Sustainable Energy Use

• Increase renewable energy usage
• Energy-efficient servers and battery-based backup systems
• Reduce dependence on diesel generators

6. Appropriate Site Selection

• Away from ecologically sensitive zones
• Away from densely populated neighbourhoods
• Avoid areas facing severe water or power shortages

7. Local Benefit-Sharing

• Commitments on local employment
• Skill development programs
• Infrastructure improvement
• Opportunities for local businesses

8. Independent Monitoring and Accountability

• Real-time monitoring of water and power use
• Environmental compliance verification
• Community grievance mechanisms
• Penalties for violations
• Periodic public reporting

Conclusion

Data centres are essential for India's digital economy, AI ambitions, and data sovereignty. However, they are resource-intensive infrastructure projects that place serious pressure on water, electricity, land, and local ecosystems. The protests in Andhra Pradesh and Maharashtra underline the need for a new governance framework balancing digital growth with ecological sustainability, public consultation, and local accountability. India's data centre expansion must be planned as sustainable infrastructure, not merely as technology investment.