'Data centres must be seen as strategic infrastructure': Niti Aayog report

Niti Aayog said that data centres must be treated as strategic infrastructure rather than just investment projects

In a report titled 'Data Centre Evaluation Framework to Help States Plan for Sustainable Growth', the Aayog said common standards, templates and guidance from the central government could support the sector's growth across states. It called for a practical guide to enable data-centre growth while protecting local systems, securing measurable public value and maintaining clear accountability throughout the project lifecycle.

The report recommended identifying readiness gaps, assigning responsibility and setting completion dates, along with preparing lifecycle and decommissioning plans for data-centre projects. Releasing the report, Niti Aayog CEO Anurag Jain said all states were coming up with policies to attract data centres. "To my understanding, nine or 10 states have already shown initial interest," Jain said. He added that India was among the countries that had taken the path of sustainable development.

India's growing data-centre sector presents an opportunity to attract investment, strengthen the country's expanding artificial intelligence (AI) economy and build domestic technological capabilities, the report said. However, data centre projects also require significant amounts of electricity, water and land, along with supporting infrastructure. States need a structured approach to assess these requirements alongside the economic benefits of proposed investments, it said.

Goldman Sachs projects that AI capital expenditure will more than double from $765 billion this year to $1.6 trillion by 2031, taking cumulative spending across computing, data centres and power to $7.6 trillion.

The framework rests on five pillars: adequate power and energy availability; water and cooling; environmental sustainability; economic and strategic value; and state-level policy, governance and implementation.