Tech Industry's Rapid Growth Sparks Concerns Over Water Usage, Centre Reports Adoption of Advanced Cooling Solutions

India's Data Centre Industry Takes Steps to Reduce Water Consumption

In response to growing concerns over the water footprint of India's rapidly expanding AI and cloud computing ecosystem, the Centre has announced that the data centre industry is increasingly adopting advanced cooling technologies to reduce water consumption.

According to a recent communication to the Prime Minister's Office, the NatConnect Foundation warned that the sector could consume nearly 37.5 billion litres of water annually, equivalent to the yearly needs of 7-8 lakh people, or enough to supply a city like Mumbai for about a week. This warning was made by NatConnect director B N Kumar, who flagged the potential threat to India's water security as data infrastructure scales up rapidly.

In response to these concerns, the data centre industry is deploying newer, more efficient cooling solutions. Advanced cooling systems such as direct-to-chip liquid cooling, adiabatic cooling, and immersion systems are being adopted to minimize both water and energy usage. These efforts are aimed at reducing the industry's water consumption and environmental impact.

Read also: FirstClub Secures $55 Million in Funding from Peak XV, Sofina, and Other Investors 9 Months After $22 Million Series A Round

The government has also highlighted broader sustainability measures being implemented across the sector, including rainwater harvesting, wastewater reuse, and digital groundwater monitoring. These initiatives are aimed at balancing growth with environmental impact.

India's data centre capacity has seen a sharp rise in recent years, growing from 375 MW in 2020 to over 1,500 MW in 2025, reflecting the surge in demand driven by digital services, artificial intelligence, and cloud computing. While concerns remain over resource usage, officials said ongoing technological upgrades and sustainability initiatives are aimed at reducing the industry's environmental impact.

Note: The growth in data centre capacity from 2020 to 2025 reflects the surge in demand driven by digital services, artificial intelligence, and cloud computing.

Read also: RBI Policy Preview: A Cautionary Wait Ahead