Centre To Roll Out Data Centre Policy Amid Power Cost Concerns

The Indian Centre is preparing a policy for data centres in response to rising electricity demand and concerns about the sector's impact on consumers' power bills, according to IT Minister of State Jitin Prasada. Prasada made the announcement at a Central Electricity Authority brainstorming session on making the Indian power sector AI-enabled, though the policy's specifics and timeline were not disclosed.

Prasada stated that India is a prime location for hyperscaler data centres, and the government aims to avoid situations where data centres extract power from consumers, causing higher electricity bills. This policy announcement follows Prasada's comments last month about balancing data centre growth with environmental safeguards.

He emphasized that India possesses the necessary land, talent, and resources to attract investments while ensuring environmental sustainability and responsible water consumption. Protests against proposed data centres in Maharashtra, such as Amazon's 422 MW project and Google's AI hub in Visakhapatnam, highlight concerns over electricity and water demand, noise pollution from backup generators, and tree removal.

These projects, though proceeding, have faced opposition from residents and civil society organizations. The Union Budget 2026-27 proposed a tax holiday for foreign companies providing cloud services through India-based data centres until 2047, aligning with global technology companies' efforts to expand their data center presence in India.