Mega Data Centres in India: Benefits, Challenges & Future

Why in News?

Mega data centre projects in Andhra Pradesh and Maharashtra are facing strong public resistance. In Visakhapatnam and Anakapalli, a Google-linked company is developing a 1 GW AI data centre hub, while in Thane, Amazon is developing a large hyperscale data centre project.Citizens’ groups are not opposing technology or investment itself. Their concerns are mainly about water use, power demand, environmental impact, lack of transparency and limited local benefits.

What are Data Centres?

A data centre is a specialised facility used to store, process and manage large volumes of digital data.

It contains:

• servers
• storage systems
• networking equipment
• cooling systems
• power supply units
• backup systems
• cybersecurity and physical security infrastructure

Data centres support modern digital services such as cloud computing, artificial intelligence, digital payments, e-governance, e-commerce, online banking and social media.

India’s Digital Infrastructure Evolution

Timeline: 2018–2026

Why Data Centres are Growing in India

India’s data centre demand is rising due to the rapid expansion of the digital economy.

1. Digitalisation and Data Generation

India’s use of e-governance, UPI, e-commerce, smartphones, 5G and online services is generating huge volumes of data that require domestic storage and processing.

2. Artificial Intelligence and Cloud Computing

AI models and cloud services need high-performance computing infrastructure. This is pushing companies to build large AI-ready data centres.

3. Data Localisation and Digital Sovereignty

The need to store and process Indian users’ data within India is encouraging domestic data centre capacity.

4. Government Incentives

Several States are offering land, power, tax benefits, stamp-duty exemptions and faster clearances to attract data centre investment.

5. Global Private Investment

Large technology companies such as Google, Amazon, Microsoft and others are expanding data infrastructure in India.

Recent Protests in Visakhapatnam and Thane

Visakhapatnam-Anakapalli Project

• The Andhra Pradesh government allotted about 601 acres across three locations: Adavivaram-Mudasarlova, Tarluvada and Rambilli. The project is being developed as a 1 GW AI data centre hub.
• Local groups have raised concerns about pressure on water, power and ecologically sensitive areas, including areas around Kambalakonda Eco-Forest, Rambilli Wildlife Sanctuary and Mudasarlova reservoir.

Thane Project

• In Maharashtra, residents are opposing Amazon’s proposed hyperscale data centre in Balkum Pada and Majiwada. The project is spread across 53.73 acres and requires large power support.
• Residents have demanded clarity on water usage, noise levels, air quality impact, public hearing and benefits for local communities.

Major Concerns

1. Water Stress

Data centres need cooling systems, and some cooling technologies require large amounts of water. In water-stressed cities, this creates conflict between industrial use and public drinking water needs.

In Thane, residents have pointed to confusion over the actual water requirement, with different figures being cited by the company and local authorities.

2. Pressure on Power Grid

Mega data centres require continuous electricity. The Thane project reportedly needs 422 MW of power and large backup capacity. AI data centres can create high and sudden electricity demand, increasing pressure on transmission networks.

3. Environmental Impact

Large construction, diesel generators, cooling infrastructure and high energy consumption can increase emissions, noise pollution and ecological stress, especially when projects are near forests, reservoirs or residential zones.

4. Limited Permanent Employment

Data centres create jobs during construction, but after completion they are highly automated and capital-intensive. This raises the question of whether local communities receive benefits proportionate to the resources used.

5. Weak Public Consultation

Citizens’ groups argue that project details, environmental data and resource-use estimates are not always clearly placed in the public domain. This creates mistrust.

6. Unplanned Urban Development

Locating large data centres in already crowded or water-stressed residential areas can worsen existing problems such as water shortage, load shedding and traffic pressure.

Way Forward

1. Transparent Resource Disclosure

Before approval, companies should publicly disclose verified estimates of water use, power demand, emissions, cooling method, waste generation and backup systems.

2. Mandatory Public Consultation

Local communities, municipal bodies and environmental groups should be consulted through proper public hearings.

3. Water-Sensitive Cooling

Projects should use treated wastewater, closed-loop cooling, rainwater harvesting and water-efficient technologies, not drinking-water sources.

4. Renewable Energy Use

Data centres should shift towards renewable power, energy-efficient servers and battery-based backup, reducing dependence on fossil fuels and diesel generators.

5. Proper Site Selection

Large data centres should not be located near ecologically sensitive zones, reservoirs, water-stressed neighbourhoods or dense residential areas.

6. Local Benefit-Sharing

Project approvals should include commitments on local jobs, skill development, infrastructure improvement and opportunities for local businesses.

7. Independent Monitoring

There should be real-time monitoring of water and power use, noise levels, air quality and environmental compliance, with public reporting.

Conclusion

Data centres are essential for India’s digital economy, AI ambitions and data sovereignty. But they are not invisible technology projects; they are large physical infrastructure projects that consume land, water and electricity. The protests in Visakhapatnam and Thane show that India must treat data centres as sustainable infrastructure, not merely as investment projects. The future of digital India must be built on transparency, ecological responsibility and community consent.