NITI Aayog Links Data Centre Approvals to Power and Water

NITI Aayog and Deloitte India released the “Data Centre Evaluation Framework to Help States Plan for Sustainable Growth” on 14 October 2026. The framework proposes that States link data centre approvals to verified electricity, water and infrastructure availability, and assess projects’ economic benefits against public support received.

Framework and approval criteria

NITI Aayog member Prof. Abhay Karandikar and Chief Executive Officer Anurag Jain launched the framework, which was developed by the NITI Frontier Tech Hub. It sets out five evaluation pillars: power and energy; water and cooling; siting and environmental sustainability; economic and strategic value; and policy, governance and implementation. The framework recommends that States prepare seasonal water-availability assessments covering 20 to 30 years and protect existing water users. It also recommends that developers fund grid assets built exclusively to serve their projects. State incentives are to be linked to measurable outcomes, including employment, renewable energy use, efficiency, local procurement and skills development.

Electricity and water requirements

For data centres requiring more than 20 megawatts (MW) of electricity, the framework recommends mandatory automated demand-response readiness and integration with State Load Dispatch Centres. A State Load Dispatch Centre oversees and coordinates the integrated operation of a State’s power system. The framework assesses data centre projects across energy supply, cooling-water needs, location, environmental sustainability and governance. It proposes treating data centres as strategic infrastructure within the development of India’s artificial intelligence economy.

Important Facts for Exams

• India’s installed data centre capacity was approximately 1.57 gigawatts (GW) in August 2026.
• India’s data centre capacity is projected to reach 4.5–6.5 GW by 2030.
• Data centres in India consumed about 13 terawatt-hours (TWh) of electricity in 2024.
• Data centre electricity consumption in India is projected to reach 57 TWh by 2030, or about 1–2% of national electricity demand.

Capacity and electricity demand

The capacity and electricity-consumption figures place data centres among major infrastructure users whose requirements include reliable power and cooling. The framework links State-level evaluation to resource availability and measurable project outcomes.