The Thirst Behind the Cloud
Data centres are the humming factories of the digital age, housing thousands of powerful servers that process, store, and move the data powering our lives. These servers generate immense heat, and keeping them cool is critical to prevent equipment failure.
While several cooling methods exist, the most common and energy-efficient for large facilities involves evaporative cooling. This process uses water, which absorbs heat as it evaporates, to maintain optimal operating temperatures. A single 100-megawatt data centre can consume approximately 20 lakh litres of water daily, a volume equivalent to the daily needs of thousands of households. The rapid rise of power-hungry Artificial Intelligence has only intensified these cooling requirements, further increasing water demand.
A Growing Footprint in Water-Stressed Areas
India's data-centre capacity has expanded dramatically, growing from around 375 MW in 2020 to over 1,500 MW by 2025. Worryingly, this boom is concentrated in urban hubs like Mumbai, Chennai, Hyderabad, and Bengaluru—many of which are already grappling with significant water shortages. Projections indicate that the sector's annual water consumption could more than double from 150 billion litres in 2025 to nearly 358 billion litres by 2030. This has led to tangible consequences on the ground. In some villages near data centre clusters in Uttar Pradesh, residents have reported significant drops in groundwater levels, forcing them to deepen borewells.
A Patchwork of Regulations
Despite the scale of consumption, there is currently no separate environmental clearance framework specifically for AI data centres in India. Instead, they are regulated under broader categories like 'building and construction projects' if they exceed a certain size. This means that unless a facility is part of a very large construction project, it may not undergo a rigorous, specific environmental impact assessment of its water usage. Existing laws like the Water (Prevention and Control of Pollution) Act, 1974, and groundwater extraction guidelines from the Ministry of Jal Shakti do apply, with State Pollution Control Boards responsible for monitoring. However, critics argue this framework is inadequate for an industry with such a unique and intense resource footprint.
The Push for Clearer Guidelines
In response to growing concerns, there is a clear push towards better regulation. In Parliament, the government has acknowledged that during the appraisal process for large projects, factors like freshwater availability in water-stressed regions are considered. The Bureau of Energy Efficiency’s 2023 District Cooling Guidelines recommend using treated wastewater instead of fresh water for cooling where feasible. Some states are also taking the lead; Rajasthan's 2025 data centre policy, for example, mandates wastewater recycling. Furthermore, a working group under the India AI Impact Summit is examining water management and environmental resilience for digital infrastructure, signalling that more robust, nationwide guidelines could be on the horizon.
Balancing Digital Ambition with Sustainability
The industry is not standing still. There is a significant shift towards more water-efficient technologies. Closed-loop cooling systems, which reuse the same water continuously rather than losing it to evaporation, can drastically reduce consumption. Other innovations like direct-to-chip liquid cooling and using non-potable water sources are also being explored. The challenge for India is to foster its growth as a global data hub while ensuring this progress doesn't come at the cost of water security for its communities. Striking this balance requires transparent reporting of water use, a stronger regulatory framework, and the widespread adoption of sustainable cooling technologies.
