India’s data centres need cooling

Companies are lining up to open data centres in India, bringing billions in investment. But there’s a sustainability problem: How do you cool these power-hungry centres in a country where water is scarce?

- AVIK DAS

India’s data centre industry reached a major milestone last month when technology giant Google announced plans to set up a 1 gigawatt (Gw) artificial intelligence (AI) data centre in the port city of Vishakhapatnam, Andhra Pradesh, investing $15 billion over the next five years.

The industry has become prominent over the last one-and-a-half decades, helped by the onset of cloud technology, ecommerce boom, use of smartphones and social media, and the government's push for a digital economy.

India’s information technology (IT) spend is projected to touch $176.3 billion in 2026, rising 10.6 per cent from 2025, and outpacing the 9.8 per cent growth expected globally, according to the latest forecast by Gartner Inc, a business and technology insights company.

The growth is being propelled by investments in data centres and software, according to its latest forecast. The data centre segment in India is projected to record the highest annual growth rate of 20.5 per cent in 2026. It would continue to outpace all other IT segments despite moderating from 29.2 per cent in 2025, said the report.

A 2019 report by real estate consultancy company JLL projected India’s data centre capacity to touch about 780 megawatt (Mw) in IT power load by 2024, up from 350 MW in 2018-19 to meet the rising demand arising from data localisation and rising data usage. This expansion was expected to provide a $4 billion greenfield investment opportunity in setting up such centres.

That target has been breezed past and Asia’s third-largest economy now boasts of a load capacity of 1.5-1.7 Gw in 2025, which is expected to expand five-fold to 8 Gw by 2030, according to research firm Jefferies. Almost 70 per cent of it is now being driven by hyperscalers.