India’s data centre industry is experiencing rapid expansion, with its capacity set to grow by 44 per cent to 2.1 gigawatts (GW) in 2025. This surge has intensified calls for a dedicated industry body to represent sector interests and streamline coordination with power planning authorities. Developers are pushing for structured planning, especially as the demand for green energy and uninterrupted power supply becomes crucial for sustaining operations.
Officials from the Ministry of Electronics and Information Technology (MeitY) and Nasscom raised the need for an industry association in a meeting with the Central Electricity Authority (CEA) in January. The discussion focused on the challenges posed by the sector’s growing power requirements and the necessity of a regulatory framework to ensure seamless expansion. CEA chairperson Ghanshyam Prasad underscored the importance of aligning with generation and transmission planning authorities to address the rising electricity demand of data centres.
India’s digital transformation has significantly boosted the data centre industry, with companies investing heavily in new facilities. Rising internet usage, cloud computing adoption, and government initiatives on data localisation have driven this expansion. Global tech giants and domestic firms have responded by setting up large-scale data centres across major cities, further straining the country’s power grid. The increasing reliance on AI, blockchain, and IoT technologies has added to the urgency of ensuring a stable power supply.
The demand for a dedicated industry body stems from the need for a structured approach to policy advocacy and regulatory engagement. Unlike traditional industries, data centres require large-scale, uninterrupted electricity, often sourced from renewable energy projects. An association could facilitate discussions between the industry and government, ensuring smoother regulatory approvals and investment flows. Developers argue that a unified voice will help address concerns related to power tariffs, land acquisition, and infrastructure readiness.
The government has recognised the sector’s role in India’s digital economy and has been working on policy frameworks to support its growth. In recent years, incentives for data centre parks and investments in renewable energy have aimed to make the sector more sustainable. However, developers argue that without a formal association, policy implementation remains fragmented. Experts believe that a structured industry body could drive uniform policies, ensuring that data centres remain competitive in the global market.
One of the critical issues raised in discussions is the need for round-the-clock power availability. Many data centres are shifting to green energy sources, such as solar and wind power, but storage and transmission challenges persist. Experts stress the necessity of integrating data centres into the country’s long-term power planning, preventing supply disruptions. Collaborative efforts between the power sector and data centre operators can ensure that capacity expansions align with energy availability, reducing strain on existing resources.
Foreign investors are closely watching India’s approach to regulating and supporting the data centre industry. Major players from the US, Europe, and Asia have already announced large-scale investments in India’s data infrastructure, betting on its growing digital economy. Any uncertainty in power planning or regulatory policies could impact future investments. A dedicated industry association could help foster investor confidence by addressing concerns related to operational sustainability and long-term viability.
As India’s data centre industry continues its rapid growth, the push for an industry body has gained momentum. With power consumption set to rise exponentially, developers and policymakers must work together to create a sustainable framework. The coming months could determine how the sector shapes its future, balancing growth ambitions with energy efficiency and environmental responsibility.
India’s data centre boom has also triggered discussions about sustainable infrastructure development. As data centres require vast amounts of land and reliable cooling mechanisms, developers are urging the government to introduce policies that support eco-friendly construction. Many global markets have already implemented standards for green data centres, incorporating advanced cooling technologies and energy-efficient designs. Industry leaders believe that India must follow suit to reduce environmental impact while maintaining competitiveness in the digital economy.
The integration of renewable energy remains a top priority. Several data centre operators have already committed to using solar and wind power to meet sustainability goals. However, the intermittent nature of these energy sources presents challenges, especially for facilities that operate 24/7. Developers are advocating for stronger partnerships between the energy and technology sectors to enhance energy storage solutions, such as battery storage and grid flexibility. Without these advancements, the industry could face rising operational costs and dependency on conventional power sources.
Another pressing concern is the regional disparity in data centre infrastructure. While major cities like Mumbai, Bengaluru, and Hyderabad have become data hub hotspots, smaller cities are yet to see similar growth. Experts argue that a well-planned industry roadmap could help decentralise data centre operations, ensuring digital infrastructure reaches underserved regions. This expansion could reduce congestion in urban centres while creating new job opportunities in emerging markets.
Policymakers are also evaluating security concerns associated with data centres. As India implements stricter data localisation laws, ensuring the safety and resilience of data centres against cyber threats has become a national priority. An industry association could play a crucial role in setting security benchmarks, encouraging operators to adopt best practices in data protection, disaster recovery, and cybersecurity. With the rise of AI-driven applications and cloud computing, safeguarding digital assets has never been more important.
The coming years will be crucial for shaping India’s data centre ecosystem. The push for an industry body reflects the growing need for a structured approach to regulation, sustainability, and power planning. As discussions between stakeholders continue, the government’s response will determine the industry’s long-term success. By fostering collaboration between power authorities, technology firms, and policymakers, India can position itself as a global leader in data infrastructure while ensuring a balanced and sustainable future.