India’s water reserves are already stretched thin, and now data centres are joining the queue. As the country races towards its AI future, an increasingly water-intensive digital infrastructure is becoming yet another participant in an already strained resource.
The growth is already significant. India’s installed data-centre capacity has nearly tripled from around 520 MW in 2020 to about 1.5 GW in 2025, and the Council on Energy, Environment and Water (CEEW) estimates that it could reach 4.5–6.5 GW by 2030.
AI is likely to accelerate this expansion further. Under the India AI Mission, the government has built access to more than 38,000 GPUs, and in February 2026 announced another 20,000 GPUs would be added. More AI computing means more servers, more processing and ultimately more physical data centres to house it. Most of this infrastructure is also concentrated in a few regions across the country. According to CBRE, Mumbai accounted for 53% of India’s roughly 1,530 MW data-centre capacity in September 2025, followed by Chennai, Delhi-NCR and Bengaluru. Together, these four markets accounted for nearly 90% of capacity.
One of the major requirements for Indian data centres: Water
Data centres generate enormous amounts of heat. Keeping servers at safe temperatures requires cooling, and some cooling systems rely heavily on water.
CEEW estimates that India’s data centres used approximately 150 billion litres of water in 2024, and this water use is expected to more than double by 2030 as the industry expands. A typical 100-MW hyperscale data centre can consume around two million litres of water every day for on-site cooling, although the amount varies depending on climate, workload and cooling technology.
This makes location important. Building a water-intensive facility in a region already struggling to meet household demand can turn a technology investment into a local resource conflict. We are already beginning to see this concern.
Indians take to the streets for water
In July 2026, residents protested an upcoming Amazon data centre in Thane, citing pressure on water, electricity and local infrastructure. Protesters claimed that the facility could require 12 million litres of water a day. (The Economic Times)
Similar concerns have surfaced around Google’s planned $15-billion data-centre project in Visakhapatnam. Reuters reported that the city receives about 410 million litres of water per day against a demand of around 480 million litres. Environmental groups have protested and challenged the project, while Google says the facility will use advanced air cooling and will not divert residential or rural drinking-water sources.
The question, therefore, is whether India’s data centres are being built in the right places and with the right technology.
But can the data centres in India use less water?
To protect one of nature’s most important resources, multiple solutions exist.
A better location for the data centres
One solution is better site selection. Water availability should be assessed alongside electricity, land and internet connectivity before a project is approved. This means looking just not at water availability but whether the local water system can sustain an additional industrial demand over the long term. CEEW warns that locating facilities in already water-stressed areas can increase pressure on communities and even create long-term operational risks for data-centre operators themselves. Future data centres could therefore be directed towards regions with greater water availability, while facilities in water-stressed areas could be required to rely more heavily on recycled or non-potable water.
A better alternative to water?
The second solution is changing how servers are cooled. Traditional cooling systems can rely heavily on evaporation which means a continuous supply of water is required to carry the heat away from the servers. Liquid cooling, particularly direct-to-chip cooling, offers a different approach. Instead of cooling the entire room, a liquid coolant is circulated directly around high-heat components such as GPUs and CPUs, allowing heat to be removed more efficiently. In a closed-loop system, this liquid is continuously circulated between the servers and the cooling system rather than being continually replaced or lost through evaporation.
Microsoft, for example, has developed closed-loop direct-to-chip cooling, in which cooling liquid continuously circulates between servers and chillers instead of being lost through evaporation. The company says its newer design can eliminate water evaporation for cooling and avoid more than 125 million litres of water use annually per data centre. This is particularly relevant for AI data centres, where high-density GPU racks generate significantly more heat than conventional computing systems.
Data centres can also use air cooling, treated wastewater, rainwater or other non-potable sources instead of drawing freshwater for cooling. Some Indian states are already moving in this direction. Rajasthan’s 2025 data-centre policy includes wastewater recycling, rainwater harvesting, groundwater recharge and zero-liquid-discharge measures, while Andhra Pradesh promotes seawater cooling for coastal facilities.
Multiple policy gaps exist
The larger gap is policy. India currently has no sector-wide mandatory standards for data-centre water efficiency or compulsory reporting of water consumption, according to CEEW. A stronger framework could require developers to assess local water stress before selecting a site, disclose their Water Usage Effectiveness (WUE), prioritise recycled water in stressed regions and adopt water-efficient cooling systems wherever possible.
India’s data-centre growth does not have to slow down to conserve water. But as billions are invested in the infrastructure powering AI and the digital economy, sustainability has to become part of its design.
