India's data centers may consume up to 2% of electricity in a decade, says NITI Aayog member

Data centers could account for as much as 2% of India’s total electricity consumption in the next decade, compared to about 0.5% currently, as the country expands its digital infrastructure, NITI Aayog member Abhay Karandikar said on Wednesday.

Speaking to ANI on the sidelines of an event to release the Framework Report on Data Center Setup, Karandikar said the demand for electricity will increase as data centers expand, but the country has a plan to meet the additional demand.

“Currently, it is about 0.5 percent of our total electricity consumption. In other countries like the US and Europe, it is much more, on the order of 2 to 5 percent of total electricity consumption,” he said.

“In the coming years, as data centers expand in the country, electricity consumption will naturally increase and may reach up to 1-2 percent of total electricity demand in the coming decade,” he added.

The projected increase comes as India expands its digital infrastructure and demand for artificial intelligence (AI) and other digital services grows, raising questions about the availability of electricity and water for data centers.

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How will India meet the growing demand for data center energy?

Karandikar said the government is taking steps to increase energy supply through renewables and potentially nuclear power in the coming years.

“As the country progresses, the demand for electricity will increase, but we have a plan to meet that demand,” he said.

Growing electricity demands are an important factor in the development of data centers due to the energy required to run servers and maintain the infrastructure that supports digital services.

A new framework for evaluating data center designs

The newly released Data Center Set-Up Evaluation Framework Report provides guiding principles and methodology for assessing data center designs, including their electricity and water requirements, Karandikar said.

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Water is primarily used to cool servers, although advances in technology could help reduce consumption.

“Advances are also being made in technology,” he said, adding that the development of efficient cooling systems could create opportunities for Indian technology companies.

The framework comes as policymakers assess infrastructure requirements related to expanding data center capacity.

Data centers can expand beyond core hubs

The main data centers are currently concentrated in Mumbai, Chennai and the Delhi-NCR region. However, Karandikar said future expansion could extend to cities like Lucknow, Bengaluru, Hyderabad and Pune as states make land, electricity and water available.

The availability of these resources could influence where new facilities are set up as India’s digital infrastructure grows.

India’s 6G spectrum planning and satellite connectivity

Separately, Karandikar discussed preparations for sixth generation (6G) telecommunications. He said some spectrum bands had already been identified, while further decisions at the upcoming World Radiocommunication Conference could help identify other bands, particularly around 6 GHz.

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India has roughly four years to plan for spectrum requirements expected by 2030, including possible coexistence with existing satellite services, he said.

On the entry of foreign satellite communications companies into India, Karandikar said the issue is one of licensing terms and a broader strategy to expand broadband while protecting national interests.

He also stressed that the development of indigenous technologies does not mean the exclusion of international companies from the Indian market.

“We would like to cooperate and cooperate with global companies, but at the same time we would like to protect national interests,” he said.

India already has extensive mobile network coverage, while satellite communications and other technologies are expected to complement existing networks, especially in underserved regions, he added.