India’s AI Boom Could Double Data Centre Water Consumption by 2030: Report

India’s ambition to become a global artificial intelligence (AI) hub could significantly increase pressure on the country’s water resources, according to recent studies tracking the environmental impact of AI infrastructure.

A report by the Council on Energy, Environment and Water (CEEW) estimated that India’s data centres consumed around 150 billion litres of water in 2024-25. As AI adoption accelerates and digital infrastructure expands, that figure is expected to rise to nearly 358 billion litres annually by 2030.

The growing demand is largely driven by data centres, which power AI applications ranging from chatbots and image generators to enterprise AI systems. These facilities house thousands of servers that generate substantial heat and require continuous cooling to function efficiently.

Many data centres use water-based cooling systems, where water absorbs heat from servers and is partially lost through evaporation. According to CEEW, a typical 100-megawatt hyperscale data centre can consume nearly 20 lakh litres of water per day, although usage varies with cooling technologies and local conditions.

The concern comes as India rapidly expands its AI and cloud infrastructure. Government data shows the country’s data-centre capacity increased from around 375 MW in 2020 to 1,500 MW in 2025. Industry estimates suggest this could grow to between 8,000 MW and 10,000 MW by the end of the decade.

Global technology companies, including Google, Microsoft and Amazon alongside domestic players such as Reliance Industries, are investing heavily in AI infrastructure across the country.

However, more than 65% of India’s data-centre capacity is concentrated in cities such as Mumbai, Chennai, Hyderabad, Bengaluru, and Noida, according to CEEW. Several of these cities already face water stress. Bengaluru experienced a major water crisis in 2024, while Chennai and Hyderabad have repeatedly dealt with water shortages in recent years.

Daswin De Silva, Professor of Analytics and AI at La Trobe University, noted in the report that larger AI-focused facilities will continue to increase demand for both water and energy. He suggested that future cooling systems should rely more on reclaimed water, seawater, closed-loop liquid cooling, and hybrid dry-cooling technologies.

Guillaume Dourdin, CEO of Veolia India, also highlighted the need for sustainable water management as India’s data-centre footprint expands, particularly in regions already facing water scarcity.