India Data Centre Capacity has witnessed significant growth in recent years, increasing from approximately 375 MW in 2020 to around 1500 MW by 2025, reflecting the rapid expansion of digital infrastructure and growing demand for artificial intelligence (AI) and high-performance computing.
According to information submitted in the Rajya Sabha by Jitin Prasada on March 13, 2026, the expansion in data centre capacity is being supported by government initiatives aimed at strengthening the country’s digital and AI ecosystem.
AI Compute Capacity Strengthens Data Centre Ecosystem
To support AI development, the government has onboarded 38,231 GPUs through 14 empanelled service providers and data centres under the AI compute capacity framework.
These resources are being made available to startups, researchers, academic institutions, and other eligible users at a subsidised average rate of ₹65 per hour, which is approximately one-third of the global average cost.
The growth in India’s data centre capacity is also supported by the geographical distribution of facilities across major technology and industrial hubs. Data centres are currently located in cities such as Mumbai, Navi Mumbai, Hyderabad, Bengaluru, Noida, and Jamnagar.
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Rising Power Demand from Data Centres
With the rapid increase in India’s data centre capacity, the government has also factored the rising electricity demand from AI and large-scale data centre operations into national planning.
As per information available with the Ministry of Power, electricity demand from data centres in India is estimated to reach 13.56 GW by 2031–32.
The country’s national transmission infrastructure is being continuously expanded to meet this growing demand and ensure reliable power supply across regions.
Nuclear Energy Policy to Support Future Infrastructure
To strengthen long-term energy solutions for emerging sectors, Parliament recently passed the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Act.
The legislation aims to strengthen the nuclear energy ecosystem and support reliable power supply for sectors such as AI and data centres.
The SHANTI Act is expected to enable the future deployment of small modular reactors (SMRs) and micro nuclear reactors, which could provide stable and scalable power solutions for the expanding India Data Centre Capacity.
Data Centre Capacity: Water Management and Cooling Technologies
The government has also acknowledged that water usage is an important factor in the data centre ecosystem. The water requirements of data centres largely depend on the type of cooling technologies used.
Regulation and control of groundwater extraction, including for industrial purposes, are governed by guidelines issued by the Ministry of Jal Shakti, under notification S.O. 3289(E) dated 24 September 2020, along with an amendment notification issued on 29 March 2023.
To minimise water consumption, the industry is adopting advanced cooling solutions such as direct-to-chip liquid cooling, adiabatic cooling, and immersion cooling.
These technologies are designed to reduce water usage while improving operational efficiency in large-scale computing environments.
High-Density Infrastructure for AI Workloads
Along with advanced cooling technologies, companies in the sector are deploying high-density racks to efficiently support high-performance computing (HPC) and AI workloads.
This approach helps optimise space and energy use while contributing to the reduction of power and water consumption.
The continued expansion of India Data Centre Capacity, combined with policy support, infrastructure planning, and advanced technologies, reflects the country’s efforts to strengthen its digital infrastructure and support the growing demands of the AI economy.
