NITI Aayog Framework: States Must Check Water, Power and Land Before Chasing Data Centres
An evaluation framework for data centres, prepared jointly by NITI Aayog and the consultancy Deloitte India, was made public on 14 October 2026.
It says approvals for data centres should be linked to verified availability of electricity, water and other infrastructure, not given project by project.
States should prepare 20 to 30-year seasonal assessments of water availability (how much water is available in each season over the long term), protect existing water users like farmers and towns, and make developers pay for grid assets (power lines, substations) built only for their projects.
States must show the net economic benefit after counting land, infrastructure, cheap power and other support they give. Incentives may be tied to results such as jobs, renewable energy use, efficiency and local purchases.
A "five-pillar framework" also covers environmental safeguards, climate risks and governance, and proposes a central audit mechanism with the Ministry of Electronics and Information Technology (MeitY) as the nodal ministry. It is not yet clear whether the framework will be binding on States.
Context: India had 271 data centres as of January 2026, with installed capacity of about 1.57 GW in August 2026, expected to reach 4.5 to 6.5 GW by 2030. Some proposed projects, such as near Thane (Maharashtra) and Visakhapatnam (Andhra Pradesh), have faced local objections over water and land use.
Data Centres: Infrastructure Backbone of the Digital Economy
A data centre is a large, secure building full of computers called servers, along with storage machines and network equipment. These machines store and process the data behind everything you do online: UPI payments, WhatsApp messages, YouTube videos, government portals and AI chatbots. When you "save something to the cloud", it is actually saved on a server in some data centre. In simple words, data centres are the factories and warehouses of the digital economy.
The NITI Aayog framework tries to manage the downside of India's data centre boom. It asks States to first check long-term water and power availability, protect existing users and count the full cost of incentives, so that the race to attract data centres does not deepen local water and power stress.
NITI Aayog: Role and Mandate
NITI Aayog is the Union government's main policy think tank. Its full name is the National Institution for Transforming India. It advises the Centre and the States on policy, prepares long-term strategies, ranks States on many indices and helps them learn from each other. It replaced the Planning Commission in 2015, and unlike the Planning Commission, it does not allocate money to States or ministries.
The data centre evaluation framework is a typical NITI Aayog output: expert advice to States on how to plan, not a binding rule. It reflects NITI's cooperative federalism role, since data centre approvals, land, water and power are largely decided by States.
- Framework by NITI Aayog and Deloitte India, made public 14 October 2026
- States asked to prepare 20 to 30-year seasonal water availability assessments
- Developers to fund grid assets built only for their projects
- Five-pillar framework; central audit mechanism; MeitY proposed as nodal ministry
- India data centres: 271 (January 2026); about 1.57 GW installed (August 2026); 4.5 to 6.5 GW expected by 2030
- Electricity use by Indian data centres: about 13 TWh (0.8% of demand) in 2024; projected 57 TWh (2.6%) by 2030
- Data centres got infrastructure status on 11 October 2022 (minimum 5 MW IT load)