Karnataka must measure its data centre ambitions not just in gigawatts, but also in how sustainably they use water and other vital resources
Published Date – 28 October 2026, 11:51 PM
Illustration: GuruG
By Dr Anuradha P S
Karnataka is making efforts to attract the next generation of digital infrastructure. The State’s newly approved Sustainable Data Centre Policy 2026-31 aims to meet a cumulative data centre IT load of 1 GW by 2031, accounting for 10-12 per cent of India’s total data centre IT load. The policy has a budget of around Rs 1,300 crore and explicitly includes renewable energy, advanced cooling, water management and water-resource efficiency.
This matters because the next wave of the digital economy will involve more than software and servers. It will be powered by electricity, land, connectivity and, increasingly, water. But the question is not whether Karnataka should attract data centres. It is how the State will ensure that its digital vision does not exacerbate its water vulnerability.
Invisible Resource
All searches, cloud services, streaming platforms and AI applications rely on physical computing infrastructure. Servers generate heat, making cooling essential. Depending on the technology and operating conditions, cooling can require significant quantities of water. The issue is becoming increasingly significant with the rise of AI and demand for high-performance computing.
The Ministry of Electronics and Information Technology says India’s data centre capacity increased from 375 MW in 2020 to over 1,500 MW by 2025. Newer technologies, such as direct-to-chip liquid cooling, immersion cooling and adiabatic cooling, are also being emphasised by the government as a means to save water and energy.
No single number can accurately reflect the water footprint of all data centres. Water consumption depends on factors such as climate, cooling technology, server density, and how they are used. A new metric gaining importance is Water Usage Effectiveness (WUE). Karnataka’s new policy proposes monitoring WUE and Power Usage Effectiveness (PUE). That’s a good start. However, for these metrics to be meaningful, they must also inform decisions about where and how the data centres are built.
Karnataka’s Dilemma
The timing matters. Karnataka is simultaneously striving for accelerated digitalisation and grappling with recurring water stress. Reports indicate that the State has issued its 17th drought declaration in 25 years, underscoring the persistent water concerns across several areas. This is a planning problem that cannot be solved by asking the data centres to use less water. A facility could be highly water-efficient yet still be located in a water-stressed area. By contrast, a site that has more available water resources, renewable energy resources and connectivity could present a more sustainable long-term option.
Water-aware site selection, efficiency benchmarks, treated wastewater use, resilience standards and updated water-resource maps can help Karnataka balance digital expansion with water security as it targets 1 GW of data centre IT load by 2031
That is why location should be an integral part of sustainability policy. To enable site selection, the new policy proposes mapping resource availability, including land, electricity, water and connectivity. It also envisages the development of sustainable data-centre zones and parks. If implemented in an open and fair manner, this could prove to be one of the most critical components of the policy.
Beyond Resource Blindness
Karnataka government’s push to diversify data centres beyond Bengaluru provides a chance to reimagine the conventional patterns of data centre expansion. Changing location should not be a mere transfer of congestion from one city to another. Instead, it should encourage development in emerging locations such as Mysuru and Mangaluru. Location should be based on a broader resource matrix that considers water availability, groundwater conditions, renewable energy potential, grid capacity, connectivity, climate risk and the needs of surrounding communities. This is particularly relevant given that a recent study by WRI India found that more than half of India’s data centres are located in areas facing water stress.
Karnataka is one of the five States that account for 75 per cent of the country’s total data centres. The lesson is not that data centres should be excluded from States facing water stress. Rather, infrastructure planning must be flexible and sensitive to local resource conditions.
Water a Condition
Karnataka could go a step further with its new policy.
- First, land allocation should be preceded by an assessment of water availability. Before approving a major data centre project, the State should consider the water balance, groundwater status, competing demands and climate risks.
- Second, WUE should become a performance metric. Incentives should be tied to water efficiency, not just to the technology that is promised.
- Third, the use of treated wastewater should be prioritised wherever practicable. Data centre cooling does not always require freshwater. Recycling and reusing water can reduce pressure on groundwater reserves and municipal water supplies.
- Fourth, Karnataka could introduce water-resilience norms for large data centre projects. For projects that exceed a certain threshold, requirements could include investments in wastewater recycling, groundwater recharge or other locally relevant water-resilience measures.
- Finally, the proposed resource map should be dynamic. Water availability is not a constant geomorphic feature. A district that appears suitable today could face greater stress as the climate changes and population and industrial demands shift. Site-selection maps should, therefore, not be treated as one-time investment tools but updated regularly.
The Economic Opportunity
Developing sustainable water-based cooling systems, reusing wastewater, managing heat, and designing low-carbon data centres could become areas of specialised expertise for Karnataka. The State could develop a niche environment for ‘green digital infrastructure’, consisting of technology companies, engineering firms, universities, startups and public utilities. That would turn a constraint into an opportunity for innovation.
The future of data centres in Karnataka is not simply about building servers but about specifying the infrastructure of the economy based on AI. The State need not choose between digital growth and water security. But it must recognise that the two are connected. The true measure of a sustainable data centre policy will not be the number of gigawatts. It will be whether the State can demonstrate that every new gigawatt is supported by the resources needed to operate it sustainably. The invisible water bill is no basis for the future of digital Karnataka.
(The author is a senior Professor in the Department of Commerce, Christ (Deemed to be University), Bengaluru)
