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India's AI Boom Faces Power and Water Crisis as Data Centers Multiply
M
Moneycontrol•23-09-2026, 13:45
India's AI Boom Faces Power and Water Crisis as Data Centers Multiply
- •India's AI ambitions are straining physical infrastructure, with data centers requiring vast electricity and continuous cooling.
- •Installed data center capacity has quadrupled since 2020, with power demand projected to hit 17 GW by 2031-32.
- •Global economists expect AI adoption to increase, but also anticipate data center expansion will raise electricity and water prices.
- •The government is implementing efficiency standards and promoting renewable energy to mitigate resource strain.
- •The AI build-out in India will depend on computing capacity, investment, megawatts, cooling efficiency, and water availability.
Key Questions Answered
According to the Central Electricity Authority estimates, power demand from India's data-centre sector is projected to reach about 17 GW by 2031-32.
In a written reply to the Rajya Sabha, the Ministry of Environment, Forest and Climate Change stated that AI data centres do not by themselves require environmental clearance under the Environment Impact Assessment Notification, 2006, though specific building or township projects might need prior approval.
India's data-centre sector has historically been concentrated in Mumbai, Navi Mumbai, Chennai, Hyderabad, Bengaluru, Delhi-NCR, and Jamnagar.
