India is preparing a dedicated policy for data centres, with the government seeking to ensure that the sector's growing electricity demand does not push up power costs for ordinary consumers, a minister said on Wednesday.
Junior Information Technology Minister Jitin Prasada announced the move at an event in New Delhi organised by the government body Central Electricity Authority. He did not disclose the proposed policy's specific provisions or when it would be unveiled.
The announcement comes amid growing global concern over the electricity and water requirements of data centres, which are expanding rapidly to support cloud computing and artificial intelligence. In India, residents in cities including Mumbai and Visakhapatnam have protested against planned facilities linked to Amazon and Google, citing concerns about their environmental and infrastructure impact.
Government seeks to balance expansion with consumer protection
Prasada said India was well placed to attract large-scale data centre investments but stressed that their growing power consumption should not come at the expense of electricity consumers.
He pointed to concerns in some countries where data centres' electricity requirements are affecting the power available to other users and contributing to higher bills. India, he said, did not want to follow that path.
The proposed policy is expected to address the challenges associated with the sector's expansion, although the minister did not outline the measures under consideration.
At present, India does not have a dedicated national policy for data centres. Projects are approved under existing environmental and building regulations, while some states offer their own incentives to attract investment.
Data centres central to India's investment ambitions
The sector has become a key part of Prime Minister Narendra Modi's efforts to position India as a global digital infrastructure hub. Modi has invited the world's data to reside in India, and his government views data centres as a potential $200 billion opportunity.
Speaking at the New Delhi event, Prasada described India as fertile ground for hyperscale data centres, which house large numbers of computer servers and support extensive digital services.
However, the sector's rising demand for electricity has become a concern internationally, particularly as operators expand facilities to meet growing computing requirements. The challenge for policymakers is to accommodate new investment while managing the pressure on power supplies and ensuring that consumers do not bear additional costs.
Protests raise questions over water, electricity and environmental impact
The proposed policy follows growing opposition to major data centre projects. Near Mumbai, residents have raised concerns about the impact of Amazon's planned facility on local electricity and water supplies, as well as noise pollution.
In Visakhapatnam, environmentalists have alleged that Google's proposed $15 billion data centre could threaten wildlife and involve the improper use of temple land.
Both Amazon and Google have denied wrongdoing, arguing that the concerns are unfounded and that their facilities will use advanced technologies to minimise resource consumption. Amazon has said its Thane facility will use a dedicated high-voltage power connection rather than draw electricity from the local distribution network supplying homes and businesses. Google has said its proposed Visakhapatnam facility will use air-cooling systems rather than water for cooling.
The debate highlights the challenge facing India as it seeks to attract investment in artificial intelligence and digital infrastructure while addressing concerns over access to essential resources, environmental protection and the cost of electricity for households.