On 16 September 2026, the Indian government said it is working to ensure that new data centres consume negligible freshwater, addressing environmental concerns as the country's digital infrastructure footprint expands ET Datacenters. A senior official told the outlet that worries over data centres draining local supplies stem from older evaporative cooling setups, not the closed-loop systems now being specified.
Visakhapatnam, where Google and Microsoft are building capacity, will see facilities draw on treated sewage, industrial wastewater or dedicated desalination rather than potable supply ET Datacenters. The Union Budget for 2025-26 introduced a tax break running to 2047 for data centre investment, and AWS, Microsoft and Google together have committed roughly $67.5 billion to India ET Datacenters.
Key takeaways
- New Indian data centres will be specified to use negligible freshwater, with closed-loop air and direct-to-chip liquid cooling driving the shift ET Datacenters.
- Visakhapatnam hubs for Google and Microsoft will source water from treated wastewater and dedicated desalination, backed by existing Godavari and Polavaram industrial allocations ET Datacenters.
- India added 387 MW of data centre capacity in 2025 and ranks seventh globally by facility count as of June 2025 ET Datacenters.
- The data centre investment pipeline is around $90 billion, up from $13-15 billion deployed between 2020 and 2024 ET Datacenters.
- A tax holiday until 2047, announced in the Union Budget for 2025-26, is being used to pull hyperscale build-outs into India ET Datacenters.
What happened
The government framed the 16 September 2026 briefing as a direct response to public concern that a build-out on the scale of the reported $90 billion pipeline would strain municipal water systems ET Datacenters. A senior official said that "concerns about data centres draining local water supplies are based on outdated evaporative cooling technologies, not modern systems," and that new builds are being pushed toward closed-loop air cooling and direct-to-chip liquid cooling, where the same water recirculates internally ET Datacenters.
In Visakhapatnam, where hyperscalers are anchoring capacity, the senior official said industrial water demand will be met from existing Godavari and Polavaram allocations rather than new freshwater draws, and that facility-level supplies will come from industrial wastewater, treated sewage effluent or dedicated desalination plants ET Datacenters. Five cities — Mumbai, Hyderabad, Delhi-NCR, Bengaluru and Chennai — already account for nearly 65 per cent of installed capacity, and the wider pipeline is being courted through a 2025-26 Union Budget tax break that runs to 2047 ET Datacenters.
Specification read
Visakhapatnam is being positioned as a hyperscale cluster, with Google and Microsoft as anchor tenants and an aggregate of new capacity tied to existing Godavari and Polavaram industrial allocations rather than municipal supply ET Datacenters. The headline investment pipeline reported for the wider Indian data centre sector is around $90 billion, against $13-15 billion deployed between 2020 and 2024, and 387 MW was added in 2025 alone ET Datacenters. The source does not give a per-facility water flow, so a buyer-side sizing range of a few hundred to a few thousand cubic metres per day per large hyperscale hall is a general industry range, not from the sources.
Because the policy explicitly points operators at treated wastewater, treated sewage effluent and dedicated desalination, the relevant treatment train runs screening → primary clarification → biological treatment (typically MBR or MBBR for the high-strength, variable industrial wastewater streams the report describes) → tertiary polishing (often high-recovery RO where blowdown has to be minimised) → disinfection, with brine or concentrate handling where RO recovery is pushed hard. For a plant operating in this bracket — flows in the order of a few hundred to a few thousand m³/day, industrial wastewater with BOD/COD in the typical mixed-industrial range of a few hundred to a few thousand mg/L, serving a hyperscale data centre customer under pressure to demonstrate near-zero freshwater draw — the procurement signal is clear: buyers should be looking at Water Purification trains that can take treated sewage or industrial effluent to cooling-tower make-up quality, and at the brine question raised in our ZLD vs High-Recovery RO for Data Center Cooling Tower Blowdown: 2026 Brine Mandate Verdict brief.
FAQ
What does the September 2026 Indian government statement actually change for data centre water use?
The government said new data centres will be designed for negligible freshwater draw, leaning on closed-loop air cooling, direct-to-chip liquid cooling, and alternative sources such as treated wastewater and desalination ET Datacenters. The practical effect is that the cooling-water brief now explicitly allows, and effectively prefers, non-potable feed.
How big is the data centre build-out this affects?
The source reports a roughly $90 billion investment pipeline, 387 MW added in 2025, and aggregate commitments of about $67.5 billion from AWS, Microsoft and Google ET Datacenters. That is a large enough pipeline to reshape cooling-water specifications across multiple Indian states.
What water sources are named for the Visakhapatnam cluster?
Visakhapatnam facilities will primarily use industrial wastewater, treated sewage effluent, or water from dedicated desalination plants, with the total industrial demand met from existing Godavari and Polavaram allocations ET Datacenters. From a procurement standpoint that points buyers at plants configured for tertiary polishing and RO, not at raw-water intakes.
What treatment stages should a supplier expect to be asked about?
Expect enquiries around MBR or MBBR for the biological step, followed by high-recovery RO and ZLD or brine-handling options where blowdown disposal is constrained — broadly the train covered in our ZLD vs High-Recovery RO for Data Center Cooling Tower Blowdown: 2026 Brine Mandate Verdict piece. Specific flow, recovery and brine targets are project-dependent and sit outside what the source reports.
