India is preparing a dedicated national data-centre policy as the government seeks to accelerate hyperscale infrastructure investment without allowing the sector’s electricity demand to increase costs for ordinary consumers. Minister of State for Electronics and Information Technology Jitin Prasada confirmed the initiative on Wednesday during an event organised by the Central Electricity Authority.
The announcement addresses a regulatory gap created by the rapid expansion of cloud and artificial-intelligence infrastructure. India currently does not have a comprehensive national policy exclusively governing data-centre development. Projects are processed through existing environmental, electricity, building and land-use rules, while several state governments offer their own fiscal incentives, power concessions and infrastructure support.
Prasada did not provide a publication date or disclose the proposed policy’s individual provisions. He nevertheless identified electricity affordability as a central concern, noting that large data-centre loads have contributed to consumer price and supply pressures in some international markets. The government wants to prevent a similar outcome while establishing India as a major destination for hyperscale computing.
The policy is emerging alongside protests over the local effects of major projects. Residents near a planned Amazon facility outside Mumbai have raised concerns about electricity and water demand, noise and the removal of trees. Google’s proposed $15 billion AI infrastructure project in Visakhapatnam has also faced questions over land use, wildlife and resource requirements. Both companies have rejected allegations of wrongdoing and maintain that their facilities will use advanced systems to minimise environmental impact.
India’s installed data-centre capacity has increased from approximately 375 MW in 2020 to around 1,575 MW in 2026. Existing facilities are concentrated around Mumbai, Navi Mumbai, Chennai, Hyderabad, Bengaluru, Delhi NCR and Jamnagar, while Andhra Pradesh, Gujarat, Madhya Pradesh, Chhattisgarh and West Bengal are pursuing new investment.
The government estimates the sector’s broader investment opportunity at approximately $200 billion. Proposed facilities are increasingly designed for high-density AI computing, requiring substantially more electricity per rack than traditional enterprise data centres. Operators are consequently adopting direct-to-chip liquid cooling, immersion cooling, closed-loop systems and dedicated renewable-energy arrangements.
A national framework could align power planning, environmental safeguards and approval processes across states while establishing clearer requirements for water, cooling, energy efficiency and grid connectivity. The government has not yet clarified whether compliance standards, reporting obligations or renewable-energy thresholds will be mandatory.
