India's AI Expansion Plans Must Address Growing Environmental Footprint of Data Centres

India's AI market, valued at 9.51 billion US dollars in 2024 and projected to reach approximately 130 billion US dollars by 2032, is driving rapid data centre expansion with significant environmental implications for energy consumption, water use and land. As India targets 8 gigawatts of data centre capacity by 2030, experts are calling for environmental safeguards to be embedded in AI infrastructure policy.

The Indian government launched the India AI Mission in March 2024, allocating over Rs 10,300 crore (approximately 1.25 billion US dollars) to build a robust AI ecosystem. India is home to more than 200,000 startups and is among the leading global markets for newly funded AI companies, attracting significant international investment. The India AI Impact Summit 2026, held in February, positioned India as a global leader in applied AI and a prime driver for Global South digital development. However, the physical infrastructure underlying these capabilities — large-scale data centres — generates substantial ecological pressure.

Large AI data centres require dedicated high-voltage transmission lines, large quantities of water for cooling, and significant land clearing for construction. They generate electronic waste, create thermal pollution around cooling systems and, when powered by non-renewable energy sources, contribute materially to carbon emissions. India's target of 8 GW of data centre capacity by 2030 implies a large-scale buildout whose environmental footprint has not yet been fully assessed or regulated in an integrated fashion across land, water and energy dimensions.

Policy experts are recommending that India's AI Mission incorporate mandatory environmental impact assessment requirements for data centre projects above a defined scale, minimum renewable energy obligations for AI infrastructure, water recycling standards for cooling systems and disclosure of energy consumption per unit of compute. Integrating AI with environmental sustainability goals would position India as a global model for responsible AI development rather than one that treats environmental costs as externalities. These frameworks would also help India meet its international climate commitments while expanding domestic digital infrastructure.

Key figure — India targets 8 GW of data centre capacity by 2030