India’s Data Centre Industry: Driving Digital Growth Sustainably

India’s data centre industry is scaling rapidly, with 153 facilities and 1,263 MW capacity in 2025, projected to grow 66% by 2026. Backed by US$6.5 billion in investments and strong government support, cities like Mumbai are emerging as major digital hubs.

The sector is adopting renewable power, AI-driven energy management, and liquid cooling technologies, cutting energy and water use by up to 40%. With infrastructure status, state incentives, and ESG adoption, data centres are achieving 25–30% lower operating costs while strengthening sustainability.

Valued at $10 billion, the industry is set to become a global benchmark for sustainable digital growth, balancing economic progress with environmental responsibility.

The rapid scale-up of India's data-centre footprint reflects a global surge in compute demand driven by AI workloads, cloud adoption and data-localisation regulations. The projected 66 percent capacity growth from 2025 into 2026 places India among the fastest-growing data-centre markets globally, alongside key hubs in the United States and parts of the Asia-Pacific.

The sustainability profile of this build-out is under increasing scrutiny. Data centres are energy- and water-intensive, and adding gigawatts of compute capacity in a grid still substantially dependent on coal-fired generation creates a meaningful decarbonisation challenge.

The industry's early adoption of renewable power procurement, liquid cooling and AI-driven energy optimisation is significant, but investor and regulator expectations around Scope 2 emissions disclosure, water stewardship and grid impact assessments will only tighten as capacity grows.

Cognitud works with data-centre operators, hyperscalers and their industrial partners on the sustainability strategy that a build-out of this pace requires - corporate PPA structuring for renewable power, water and heat-reuse programmes, embodied-carbon assessments for construction, and ESG reporting aligned with ISSB, CSRD and India's BRSR framework.

Our data and digital, climate action and circular economy advisory teams support clients in turning sustainability from a compliance overhead into a competitive advantage that shapes site selection, financing terms and long-term operating economics.

A build-out at this pace surfaces grid, water and Scope 2 questions almost immediately, and hyperscaler siting decisions are becoming disclosure-linked in ways that didn't apply five years ago. Our data-and-digital, climate-action and circular-economy teams help data-centre operators and their downstream customers turn sustainability from compliance overhead into a decision variable that shapes site selection, financing terms and long-term operating economics.