India’s NITI Aayog is asking states to test whether power networks and water supplies can support proposed data centers before public backing commits resources or shifts upgrade costs to others.
The government policy body released its framework on Oct. 14 to guide state decisions on projects and incentives. It is guidance, not a new regulation, and calls for states to consider the economic value of projects alongside the public support they receive.
NITI Aayog’s Oct. 15, 2026, release put India’s data center capacity at about 1.5 gigawatts, compared with about 375 megawatts in 2020. The agency linked the expansion to demand for artificial intelligence, cloud computing and other data-intensive services. Eligible foreign cloud service providers using data centers in India can receive a tax holiday through 2047.
For electricity, the framework recommends identifying grid work needed as a project develops and deciding who will fund it. The applicant may pay for equipment that serves only its facility, while costs for shared infrastructure should be divided among those who benefit. States are also advised to assess whether water allocations would affect reliable supplies for current users. The framework points to Ireland, where new data center projects are linked to added power generation.
Google announced an approximately $15 billion investment from 2026 through 2030 in an artificial intelligence hub in Visakhapatnam that includes a data center campus. In an April 28 update, Google said it had broken ground and was working with partners on transmission lines, clean-energy generation and storage. In an Aug. 31 statement, groups campaigning against the proposed projects cited concerns about water supplies, livelihoods, public spending and community consultation.
Amazon projects that its planned Thane facility will use 125 kiloliters of water per day once operating. The company says 115 kiloliters would be treated wastewater for landscaping and irrigation, while 10 kiloliters would meet basic human needs. Amazon says cooling would use no water and that it has established a dedicated substation to connect the site to the high-voltage grid.
Reuters reported that Minister of State for Electronics and Information Technology Jitin Prasada said on Oct. 14 that the government was preparing a national data center policy and wanted to prevent rising sector demand from increasing consumers’ electricity bills. Reuters said Prasada did not specify the policy’s scope or release date.
