- India is positioning itself as a global investment hub for artificial intelligence and data centres, with the latest gigawatt-scale investment in Visakhapatnam, Andhra Pradesh.
- Environmental concerns are being raised as data centres are very water and energy-intensive infrastructure. They are not classified as a separate category for the purpose of environmental clearance.
- While the industry is working on technologies that make data centres more energy and water efficient, India still does not have a national data centre policy with uniform benchmarks.
The coastal district of Visakhapatnam (Vizag) in Andhra Pradesh is set for a major transformation. On April 28, the foundation stone was laid in Tarluvada, a village in Vizag for a new data centre for Google — expected to be the technology company’s largest data centre outside the United States. The data centre is part of an AI Hub announced by the company last October. The state government allotted 480 acres of land in Visakhapatnam and Anakapalli districts for the hub.
Activists and lawyers have raised environmental concerns and questions about the lack of clarity on water and energy consumption for the operation of the approved data centres. They also assert that data centres should be classified as separate infrastructure projects with massive resource needs, for obtaining environment clearance. Experts call for a clear, defined national data centre policy. After a draft policy was launched by the Ministry of Electronics and Information Technology of India (MeitY) in 2020, there have been no updates or a final policy yet.
Meanwhile, Reliance Industries Ltd. is also planning to build a 1.5 gigawatt (GW) data centre cluster, also in Vizag. AP aims to create 6.5 GW of compute capacity in the coming years.
Environmental concerns surrounding data centres in Vizag
Data centres use water, primarily for cooling the systems. Google alone consumed approximately 31 billion litres of water across all its data centres in 2024. While the company reports that a majority of its freshwater withdrawals came from sources at low risk of water depletion, further information on said sources was not provided. It also states that it’s planning integrated watershed management to address existing hydrological stress. However, Visakhapatnam district has the lowest levels of groundwater available for domestic, agricultural or industrial use in the state (2.12 TMC), as on April 1, 2026.
The AP government, in its state data centre policy, also proposes to leverage seawater cooling systems as a cooling solution, but it is unclear what percentage of freshwater and seawater would be used in the Tarluvada project.
The environmental clearance (EC) issued to M/s. Vizag Mega Data Centre Park Limited for the 1000 megawatt (1 GW) data centre park in Tarluvada, accessed by Mongabay-India, does not disclose information about the water usage during the operation phase. Emails to Google with questions about their water consumption plans in AP were unanswered at the time of publishing this story.
“We don’t know the source of water for the operation of the data centre (in Tarluvada). It is not mentioned in the EC,” shares Gutta Rohith, an advocate with Human Rights Forum, an organisation that has demanded the suspension of EC for this data centre project. “We don’t know if they are going to use desalinised water or surface water or groundwater. Even the amount of water required for cooling in this hyperscale data centre is not mentioned in the EC,” he continues. Hyperscale data centres, like the one being built in Tarluvada for Google, are large facilities meant for vast data processing and storage needs.
“In the case of seawater cooling, it’ll be important to ensure compliance with the coastal zone regulations as it’ll need infrastructure to transport the water and potential impacts on the biodiversity and coastal communities and livelihoods,” shares Shalu Agarwal, Director of Programmes at the think-tank Council on Energy, Environment and Water (CEEW).
For the AI Hub in Vizag, AdaniConnex and Airtel will support the infrastructure for clean energy and subsea cables. But Rohith questions what percentage of the operations would come from renewable energy and if the transmission infrastructure is prepared for the same. “Hyperscale data centres also train their artificial intelligence (AI) models. They require high processing servers and consume more energy than regular data centres. Data centres have to run 24×7. The large language models (LLMs) created by the tech companies need to be trained all the time. We need to know how much energy will be consumed by this 1 GW data centre and how much of it is renewable energy and also how the companies will transmit the energy from, say, solar parks,” Rohith shares. He also adds that creating more solar parks locally to power gigawatt-scale data centres would need thousands of acres of land.
“Due to high uptime requirements, data centres can have huge outage costs; so they cannot really afford power outages,” Shalu notes. “Even a 100 MW hyperscaler would consume electricity to the equivalent of a large village. Also, the energy demand pattern of these hyperscale facilities is dynamic and less predictable, because it is closely linked to the AI workloads that can go up and down. That then can have significant implications on the grid stability and the frequency,” she adds.
Rohith also points out that there is no separate category for data centres in the Environment Impact Assessment (EIA) notification. “Data centres are being categorised as buildings or township development projects wherein there’s no need for a public hearing or draft EIA reports. This is the case for all states and they (the companies) get state level approval where the State Environment Impact Assessment Authority (SEIAA) provides the EC.”
For the Tarluvada project, the company submitted the proposal on April 9 and about ten days later, on April 18, the EC was approved by the SEIAA. While the state government promotes ease of doing business, Human Rights Forum questions the lack of clarity on the resource use.
Lack of information about resource use
The lack of information on resource use is not a challenge in Vizag alone. “We definitely need clarity from the company or the state about what resources will be used and how much groundwater will be consumed to operate the data centre,” shares Indumugi C., a legal counsel at Internet Freedom Foundation and the author of a recent factsheet on India’s data centres. “We filed an RTI with the Telecom Regulatory Authority of India asking for information about the environmental impacts of data centres. This was forwarded to The Ministry of Electronics and Information Technology (MeitY), which said that it has zero information about data centres, whereas it was MeitY that created the draft data centre policy for India in 2020.”
All around the globe, investigations have shown that the communities don’t receive much information about the data centres that come up in their neighbourhoods. Brazil-based investigative journalist Lais Martins who has been reporting on technology for over eight years says, “In Brazil, the most striking pattern is the lack of information for the communities. Companies that are developing data centres don’t inform communities about the impacts. They treat this as any other industrial development like factories or renewable power plants. They fail to treat data centres as very specific infrastructure with very specific needs — energy and water use for example, compared to other types of infrastructure.”
“Many documents we try to access are not open to the public because of business confidentiality,” she adds.
Martins says that India needs to take into account if the data centres make the tech industry more independent. “Are these data centres making our countries more sovereign? This has to be a discussion on the table.”
India’s goals
With data generation increasing at an unprecedented rate, data centres are rapidly being built all around the world. India’s total data centre capacity has increased from about 375 MW in 2020 to around 1.5 GW by 2025. The country hosts nearly 20% of the world’s data, while its data centre capacity stands at around 3% of the global total.
“The AI world is about intelligence. Intelligence is based on knowledge and knowledge is based on data. Therefore, it is important to keep data within India and have our own LLMs. That requires us to have data centres within our boundaries. So, it is not just about digital sovereignty but also intellectual sovereignty,” shares Sharad Agarwal, the CEO of the technology company Sify which has 14 operational data centres in India. The AI Impact Summit held earlier this year in New Delhi also spotlighted the country’s goal to place democratisation at the core of the artificial intelligence strategy.
The digital economy is expected to contribute 20% of the national income of India by 2030, which also underscores the significance of data centres. In the Union Budget 2026-27, the government has also announced a tax holiday till 2047 for eligible foreign cloud service providers operating through India-based data centre infrastructure.
With Indian policies aimed at positioning itself as a global investment hub for artificial intelligence, the data centre industry must look at environment-friendly ways to operate.
Developments in data centre technology
A data centre’s energy and water efficiency are measured via two main metrics – Power Usage Efficiency (PUE) and Water Usage Efficiency (WUE). While the PUE generally ranges from 1 (efficient) to 2 (inefficient), WUE ranges from 0 litres per kWh to over 2.5 L/kWh.
With the growing AI use and demand, the energy density is also changing and one data centre could consume up to double the power it did for a non-AI workload. “So we’re working on technologies like direct-to-chip liquid cooling, wherein instead of just cooling the atmosphere around the systems, we reduce the heat within the critical components of CPUs by cooling them directly,” shares Sharad.
“The PUE in Indian data centres is continuously being improved,” he adds. “It used to be closer to 2 and now with advanced technologies like direct-to-chip liquid cooling, the PUE is heading close to 1.3. The data centre industry is widely investing in renewable energy and in Sify about 60% of our energy consumption comes from solar and wind.”
For water usage, there are several new technologies that are being developed and tested. There are two major methods through which data centres cool their systems. One method is evaporative cooling which cools hot server air by using evaporating water to absorb and remove heat before the air is recirculated. This uses a lot of water. The second way is a closed loop system. “In India, for over a decade now, Indian data centres have been adapting to closed-loop water chiller systems where the water is filled only once and this water goes to the chiller and keeps getting reused,” Sharad explains.
The need for a national data centre policy
Amid advancements in data centre technology and new investments, India does not still have a national policy framework specifically governing data centres. Experts note that this is an important step.
“We should have a very clear framework so that there’s no confusion across states and developers also don’t scout for states with better incentives. There should be uniform performance benchmarks, PUE and WUE,” shares Shalu.
“Creating investment channels for a whole new sector means that we’re also allowing the sector to acquire land and resources. A national policy needs to consider how we’re allocating land and looking at land use. Displacement can occur like any other large scale projects in the country,” warns Indumugi.
The way forward
Currently 15 states have their own data centre policies. Most of these policies exhibit an absence of performance standards such as PUE or WUE, finds a CEEW report on scaling India’s data centres.
At present, the energy and water demand of data centres when you look at the national level is not a lot, shares Shalu. The CEEW report notes, in 2025, data centres account for ~0.5 per cent of national electricity consumption. “The water use is also approximately 0.02-0.03% of the national demand,” Shalu adds.
“However, because they are water and energy-intensive, depending upon their siting, the pressure they put on the local grid and water resources can become concerning,” she adds. A recent map by WRI India showed that more than half of India’s data centres are located in water-stressed regions.
Decisions taken today on siting, power sourcing, and cooling technologies will shape India’s long-term environmental and infrastructure footprint, the CEEW report notes.
Shalu also highlights the need for improved centre-state coordination for transmission lines and energy networks, and long-term standards for data centre companies. The bigger data centres need higher voltage substations, dedicated transmission lines, and intrastate networks. These take time which oftentimes are not available when data centres are mushrooming. “More coordination is needed between centre and state to plan ahead in time for those transmission facilities — at the interstate level or intrastate level,” she explains.
“We also need to set long-term standards for data companies wherein there’s a set trajectory to improve the standards every few years as the technology improves, nudging the developers to invest in environment-friendly technologies.”
Linking this to incentives, Shalu cites the example of the Singapore Green Data Center Roadmap that incentivises energy-efficiency and concludes, “We are also providing several incentives for data centres to invest in India. So, why not use that as a condition to also meet environmental standards?”
Banner image: High-tension power lines. Image by Ujjwal Kishore via Pexels.
Read more: Data centres face physical climate risks, report warns
