India’s data centre market is on a high growth trajectory, driven by several converging forces. The total installed data centre capacity currently stands between 1.5 GW and 1.8 GW and is projected to reach 7.5-7.8 GW by 2032. Beyond that horizon, a further 7 GW of committed and early-stage capacity is already in the development pipeline. The scale of what is coming has profound implications for India’s electricity grid. Data centres are already expected to consume around 3 per cent of the country’s total electricity by 2030, up from less than 1 per cent today, and that projection does not yet account for the substantially higher energy demand from artificial intelligence (AI) workloads. Data centres are the engine rooms of the digital economy. But their appetite for energy is such that the capacity is no longer measured purely in computing power. It is measured in megawatts.
For India, this creates a direct tension. The country has committed to 500 GW of non-fossil energy capacity by 2030 and net zero emissions by 2070. A 100 MW data centre operating at a power usage effectiveness (PUE) of 1.5 on India’s current grid emits roughly 0.93 million tonnes of CO2 equivalent per year. India’s grid emission factor has declined from 0.774 tCO2 per MWh in financial year 2013-14 (FY 2014) to 0.710 tCO2 per MWh in FY 2025, but remains high enough to make every efficiency gain both commercially and environmentally significant.
Water adds another dimension. India holds 18 per cent of the world’s population but only 4 per cent of its freshwater resources, and data centres cluster in the country’s most water-stressed cities. No national water usage effectiveness (WUE) policy exists as yet, although the Indian Green Building Council targets below 2.2 litres per kWh. The answer to these compounding pressures lies in the convergence of battery storage, renewable energy, advanced cooling and intelligent energy management.
Current practices
India’s data centre segment is pursuing sustainability across various strategic dimensions simultaneously. These include renewable energy procurement through captive interstate transmission system (ISTS) power purchase agreements (PPAs), high-density and liquid-cooled facility designs that accommodate AI workloads, while protecting PUE, water-neutral design philosophies using closed-loop systems, green finance through sustainability-linked loans tied to environmental KPIs and AI-driven optimisation of non-IT loads.
Cooling represents the single largest efficiency lever, accounting for approximately 40 per cent of the total data centre energy consumption as per Bureau of Energy Efficiency (BEE) and the Confederation of Indian Industry guidelines. Direct liquid cooling and liquid immersion cooling are moving from pilot to commercial scale. Operators are also deploying silicon-carbide UPS modules, 400 V DC busways and gas-insulated substations to reduce power conversion losses. IT load optimisation through ASHRAE A1A wider-temperature operations, server virtualisation and AI-driven workload scheduling further reduces peak thermal loads without additional capital investment.
The demand side is reinforcing this shift. Lease contracts now routinely embed PUE, renewable energy percentage WUE and carbon-disclosure clauses. Additionally, sustainability has become a commercial prerequisite for winning large enterprise and hyperscaler tenants.
Smart energy management systems
Building management systems and energy management systems are also being integrated with renewable energy dashboards to give operators a unified, real-time view of energy sourcing, consumption and carbon intensity.
Nxtra by Airtel set a sector benchmark in November 2024, becoming the first Indian operator to deploy AI-driven energy management at scale through Ecolibrium’s SmartSense platform, piloted at Chennai, before being extended across all 14 core hyperscale data centres. The platform targets a 10 per cent reduction in non-IT power consumption, a 10 per cent extension of asset life and a 25 per cent improvement in technician productivity. CtrlS has deployed software-defined power for dynamic provisioning across its 16 facilities, coupled with AI-driven anomaly detection. STT GDC India has implemented real-time energy performance dashboards aligned with its CEEDA (energy efficiency certification for data centres) Gold certification requirements, while Sify Technologies runs an AIOps-integrated mechanical, electrical and plumbing optimisation layer across its 14 data centre network, maintaining ISO 50001 compliance. Similarly, Iron Mountain offers tenants a green power pass that provides third-party-verified, site-level Scope 2 data for direct use in tenant sustainability reporting.
Role of technology in data centre monitoring and optimisation
AI-driven cooling control and predictive maintenance have moved from proof of concept to production deployment. The Nxtra-Ecolibrium deployment illustrates the model – real-time sensor data feeds a machine learning (ML) engine that continuously adjusts cooling output, predicts failures and optimises airflow dynamically. NTT’s experience at the UK facility, where smart sensor upgrades reduced fan energy consumption by 2.6 GWh per year, is now being replicated across its Indian campuses. CtrlS applies ML-based demand forecasting and thermal tuning algorithms across all Rated-4 facilities and Yotta’s Shakti Cloud platform feeds GPU-cluster telemetry directly into facility cooling loops.
Further, data centre infrastructure management (DCIM) adoption is now standard for any new hyperscale build. Internet of things sensor networks monitoring temperature, humidity, airflow, UPS health and chiller performance provide the foundational data layer. The convergence of DCIM, BMS and EMS into a single intelligent management plane is where the sector’s near-term efficiency gains will be realised.
Operator-specific initiatives
India’s leading operators have each established measurable green programmes and the pace of commitment has accelerated remarkably over recent years.
Nxtra by Airtel joined RE100 as the first Indian data centre operator to do so and is pursuing an SBTi-aligned net zero target by 2031. Renewable energy accounted for 49 per cent of its core data centre consumption in FY 2025, with a 125.65 MW captive solar-wind hybrid PPA added in July 2025. The operator abated 188,507 tCO2e in FY 2025, a 15 per cent year-on-year improvement. STT GDC, in Q1 2026, expanded its CleanMax solar partnership beyond 130 MW across Tamil Nadu and Maharashtra, with a 26 per cent equity stake in the renewable SPV. Its Mumbai DC3 BKC facility holds CEEDA Gold certification, the third globally and the first in Asia.
Meanwhile, AdaniConneX secured India’s largest sustainability-linked loan in the sector, $1.44 billion, in April 2024, with covenants tied directly to PUE improvement and renewable energy targets. CtrlS operates the world’s first LEED Platinum-certified data centre in Mumbai and its contracted 153 MWp solar portfolio generated approximately 85 million kWh between September 2024 and June 2025. NTT Global Data Centers India announced a $1.2 billion AI data centre cluster in Hyderabad in April 2025 and has deployed liquid immersion cooling at Navi Mumbai, delivering a 30 per cent energy-efficiency improvement.
Other operators are making comparable advances as well. Yotta Infrastructure has adopted a water-neutral cooling philosophy at its Tier IV NM1 facility, integrating captive solar and planned hydrogen fuel cells. Sify Technologies has contracted 231 MW of renewable PPAs with its Mumbai campus already at approximately 70 per cent renewable coverage. Reliance Jio’s Jamnagar AI campus, planned at 3 GW, is positioned to run entirely on the group’s own green energy portfolio. Operators including Pi Datacenters, NxtGen and ESDS are similarly advancing green certifications, renewable sourcing and energy-efficient cooling as foundational design principles across their respective facilities.
What needs to be done still
Despite visible progress, significant structural gaps remain. India does not yet have a notified National Data Centre Policy. The draft circulated by MeitY in August 2025 is still under consultation. The union budget for 2026 extended a 20-year tax holiday to data centre investments and proposed a 15 per cent safe-harbour rate, but binding green-design conditions including mandatory PUE thresholds, WUE standards and renewable energy obligations remain proposed, not yet enforced.
Meanwhile, state-level frameworks are quite inconsistent. Rajasthan’s 2025 data centre policy mandates zero liquid discharge, wastewater recycling and a green data centre tag. Most other states impose no sustainability conditions. BEE has not issued data centre-specific minimum energy performance standards, and business responsibility and sustainability reporting (BRSR) disclosure requirements remain too generic to drive sector-specific accountability. Embodied carbon and e-waste remain largely unmeasured. Similarly, open access and renewable energy banking friction, including variable wheeling rules across states and interconnection delays of 12 to 24 months in high-growth corridors around Mumbai, continue to put pressure on the procurement efficiency.
Outlook
The investment pipeline is large, operator commitments are real and the policy architecture is beginning to take shape. However, the pace of green transition must keep up with the pace of capacity addition.
The near-term policy priorities are well understood. A notified National Data Centre Policy, with binding PUE and WUE thresholds for new builds, standardised sustainability disclosure under BRSR-Core and streamlined ISTS open access for renewable procurement, would collectively establish the regulatory floor that the sector currently lacks.
The commercial logic is also aligned. Green performance now directly determines the cost of capital, the quality of tenants and access to institutional investment. In a sector where a single hyperscale lease can run to hundreds of millions of dollars over its tenure, the operator that cannot demonstrate a verified renewable energy percentage, an SBTi-aligned net zero pathway or a sub-1.4 PUE trajectory is increasingly disqualified before commercial negotiations even begin. What remains to be done is for the policy to formalise the minimum floor, converting what leading operators are already doing voluntarily into the baseline standard for the entire sector.
