India to Introduce Data Center Policy Amid Environmental and Resource Concerns

This roundup focuses on India's planned data center policy and concerns about the resources that data centers consume. Jitin Prasada, a junior minister for electronics and information technology, announced on October 14 that India will introduce a data center policy. Several U.S. technology companies are investing billions of dollars in digital infrastructure in India. Growing public opposition over resource sharing and environmental concerns has prompted the government to intervene.

Prasada reportedly said India wants to prevent consumers from paying higher electricity prices because data centers compete for power supplies. Communities worldwide are challenging data center projects over electricity consumption, water consumption and land use. Similar concerns in India threaten the country's ambition to store data from around the world.

Local media reported that residents oppose Amazon's data center near Mumbai because residents fear the facility would get priority for water and electricity during shortages. Environmental activists have demanded that authorities cancel approvals for AI data centers in Visakhapatnam. Google is constructing a $15 billion project there.

Amazon said the company is committed to acting responsibly toward neighboring communities and is conducting educational sessions with residents. Amazon denied using water to cool the company's data centers. Amazon also said the company's data centers do not take electricity from the local distribution network serving homes, shops and businesses. Amazon said the company will participate in government consultations on India's data center regulations. Google did not respond to a request for comment.

Experts said the government intends to introduce a policy directive to reduce local opposition to projects across India. Experts said the directive will establish clear approval guidelines to reduce developers' exposure to public opposition and implementation difficulties. Jaspreet Singh, a partner at Grant Thornton Bharat, said the proposal shifts the emphasis from encouraging investment alone toward balancing investment with infrastructure readiness and sustainability.

Niti Aayog, a government think tank, released a framework last week for local governments to assess data center projects for sustainability. The framework also helps local governments identify suitable sites according to electricity grid readiness and available water supplies. Niti Aayog called for guidelines to be established before resource constraints arise. Niti Aayog said faster approvals should depend on demonstrated resource readiness, local safeguards and public value.

Experts involved in consultations expect the policy to establish consistent rules, ease land acquisition difficulties and simplify fragmented approvals. Shobhit Agarwal, chief executive of real estate consultancy ANAROCK Capital, said India lacks a dedicated national data center policy and urgently needs one. Agarwal said authorities currently approve projects through existing environmental and building regulations. Agarwal said individual states apply different provisions and incentives.

India's government has encouraged hyperscalers to invest, including through tax incentives lasting 20 years. However, regional governments make the final decisions on supplying land, water and electricity. Nikhil Narendran, a technology partner at law firm Trilegal who works with U.S. technology companies, said local governments are proposing projects in locations already facing infrastructure constraints. Narendran said state governments need encouragement to select sites with dependable electricity, substantial cooling infrastructure, available water and high-quality connectivity. Narendran said state governments should prioritize those requirements rather than compete merely to announce large investments.