State government bets on ₹16.7 lakh crore data center push

Data centers are huge warehouse-sized buildings that host powerful computer systems used to train AI models. Protests against data centers are growing around the world because they gobble up water and electricity. According to International Energy Agency (IEA) estimates, a 100 MW hyperscale data center can consume about 2 million liters of water per day for cooling. Mumbai’s domestic water consumption is about 135 liters per person per day, and a family of four uses about 540 liters per day. A 100 megawatt (MW) data center consuming 2 million liters per day uses water equal to the daily needs of about 3,700 households or about 14,800 people. The daily water requirement of MMR is about 8000 MLD (million liters per day). Once operational, these data centers will require 856 MLD, which is about 10% of the water consumed by the population.

Developing a data center is both controversial and complex. According to the government, these centers are also expected to generate more than 1.46 lakh direct jobs in MMR. The state’s data center incentives are closely linked to its broader economic ambitions for MMR. Currently, MMR is a $140 billion economy with per capita income ₹4.36 lakh. But between 2012 and 2020, the region recorded a relatively modest growth rate of 6.1%, which was lower than the national average. A September 2024 NITI Aayog report projected MMR to emerge as one of the world’s leading metropolitan economies with a GDP of $1.5 trillion by 2047. MMR is an important component of the BJP’s planned ‘From Heritage to Vikas’ campaign for 2047, the centenary of India’s independence. The sector needs to attract sustained investments of $135 billion over seven years to reach its target. With existing industrial centers and undersea cable connectivity, the kingdom expects digital infrastructure and data centers to power this growth.

Many major data center projects have been encouraged to invest in MMR. The largest involves the proposal of Blackstone-backed Brepp Asia III Holdings. ₹Rs 2 lakh crore integrated green data center project with a capacity of 2 GW (Gigawatt). The company has received a letter of intent and is looking for land in the area.

Amazon Web Services has made an offer ₹Investment of Rs 65,000 crore for a large-scale facility in Taloja, Navi Mumbai. Other major projects include Adani Infra’s projects ₹Rs 1.2 lakh crore integrated green data center project with 2,000 MW capacity, also in Taloja; Yotta Data Services owned by Hiranandani ₹Rs 90,000 crore project with 2,200 MW capacity in Panvel; AdaniConneX projects in Navi Mumbai and Pune make sense ₹70,000 crore more ₹80,000 crore respectively; Lodha Developers’ ₹Rs 30,000 crore data center complex in Thane with 2,000 MW capacity; and JW Global India’s ₹The Rs 1.14 lakh crore project near Ujani Dam in Solapur, which has already received letter of intent.

Microsoft, NTT, STT Global, CtrlS, Princeton Digital Group and Digital Edge have also either announced investments or are expanding their presence in the state.

Water, power and environmental challenges

Although the investment story is promising, water availability has emerged as one of the most significant challenges in this expansion. The proposed data center ecosystem is expected to require approximately 856 million liters of water per day (MLD). Of this, 601 MLD will be required for projects currently under implementation, while another 255 MLD will be required for projects in the pipeline.

Taloja alone will require 140 MLD, Navi Mumbai will require 136 MLD and Panvel will require 108 MLD.

Rakesh Kumar, former mission director for national carbon capture, utilization and storage (CCUS) projects at the Council of Scientific and Industrial Research (CSIR), said the government should ensure that data center-led growth does not come at the expense of water and environmental sustainability. “Instead of focusing solely on data centers’ water consumption, policymakers must address the larger challenge of untreated sewage. More than 70% of wastewater still goes untreated. Data centers can be part of the solution by treating and reusing wastewater instead of drawing fresh water, thereby reducing pressure on rivers and other water bodies. This requires a clear policy framework, strict implementation and accountability.”

In the US, which hosts more than 4000 data centres, pressure is growing from people like Democrat representative Alexandria Ocasio-Cortez and renowned activist Erin Brockovich against water supply cuts and rising electricity costs.

energy demand

Even in the MMR, the projects collectively require thousands of megawatts of power, with many individual projects requiring between 1,300 MW and 3,000 MW. Industry experts believe that although Maharashtra currently enjoys a strong power infrastructure, substantial investment in transmission networks, substations and renewable energy integration will be necessary to support future growth.

A report by Delhi-based think tank Council on Energy, Environment and Water (CEEW) estimates that a 100 MW hyperscale data center running 24 hours a day consumes about 2.4 million kWh (units) of electricity per day and about 876 million kWh annually.

By comparison, according to the recent Household Energy Survey, an average Indian urban household consumes about 1,937 kWh annually. This means a 100 MW data center can consume as much electricity as about 4.5 lakh urban homes in a year. On a daily basis, the same facility uses enough electricity to power approximately 12,000–15,000 middle-class households for an entire month.

Environmentalist D. Stalin has urged the state government to publish a white paper detailing the estimated water and power requirements of the region and their impact on citizens. He said Mumbai and MMR are already facing groundwater stress, rising salinity and increasing pressure on potable water resources. “Promoting water-intensive data centers in a water-stressed region could exacerbate household and agricultural shortages, while significantly increasing electricity consumption. Farmers are struggling for irrigation water, yet substantial resources are being allocated to data center projects. The moment these centers become operational, there could be severe pressure on local water and electricity resources.”

Environmentalists also expressed concern over rising local temperatures and potential ecological impacts in areas surrounding large data center clusters. Questioning claims of large-scale job creation, Stalin pointed out that even the US, which is home to some of the largest data center clusters in the world, has not projected this industry as a major source of jobs. He warned that future water shortages could be used to justify additional dams, which would lead to the submergence of forests, displacement of communities and loss of agricultural land.

Speaking about concerns over power and water usage by these data centres, Chief Minister Devendra Fadnavis told HT, “The concerns are understandable, and sustainability is built into our planning from the beginning. On water, we are encouraging the use of treated waste water, recycling systems and advanced cooling technologies that significantly reduce fresh water consumption. Many modern data centers are moving towards highly water-efficient designs, and we are being proactive. It is important to note that in terms of power, we are adding substantial renewable energy capacity and building dedicated power to large industrial consumers by 2030. “As the data center sector grows, we will ensure that the needs of citizens, agriculture and industry are protected. Our objective is clear: to support digital growth without compromising essential services or resources.”

Amar Supte, retired principal scientific officer, Maharashtra Pollution Control Board (MPCB), said data centers do not pose significant environmental or security risks if they are located away from ecologically sensitive areas such as CRZ areas, earthquake-prone areas and other fragile ecosystems. “Modern data centers are built with robust security systems and multiple layers of backup. The key issues are proper site selection, environmental safeguards, and planning for water and power requirements. Compared to many other industries and the pace of urbanization, data centers require relatively limited land. The focus should be on scientific planning and sustainable infrastructure rather than directly opposing such projects.”

The state government is in the process of acquiring about 3,000 acres of land for data centers and supporting infrastructure in Taloja, Mahape and the proposed third Mumbai region. Officials said the compensation offered under land acquisition laws is much higher than the prevailing market rates, resulting in limited resistance from land owners.

As Maharashtra positions itself as the digital infrastructure capital of India, the success of its ambitious data center strategy may ultimately depend on how effectively it balances investment-led growth with long-term water, energy and environmental sustainability.