India's Data Center Boom Exacerbates Water Scarcity in Bengaluru

India is positioning itself as a global hub for data centers, driven by lower operational costs and strategic location. The country hosts around 150 data centers with a projected capacity addition leading the Asia-Pacific region. However, this digital infrastructure expansion comes at a critical cost: water.

India faces extreme water stress, and a significant number of its data centers are located in these vulnerable regions. In Bengaluru, areas like Devanahalli and Whitefield are seeing rapid data center development. For instance, a new facility in Devanahalli has been allocated a daily water supply equivalent to the annual needs of approximately 5,000 people, in a region where groundwater extraction already exceeds permissible limits by 169%.

Local communities in these areas report worsening water scarcity, with borewells drying up and reliance on limited municipal supply or costly private water tankers. The Karnataka Data Centre Policy 2022, while promoting growth, is noted to be silent on sustainable water usage mandates. Claims by some companies about prioritizing water-saving technologies are not consistently corroborated by official statements or policy texts, and transparency regarding water permits and actual consumption remains a challenge.

Impact This situation poses a significant risk to local communities and the environment. For the Indian stock market, the rapid growth of the data center sector presents investment opportunities, but increasing environmental scrutiny and potential regulatory pressures regarding water usage could impact profitability and investor sentiment. Companies with strong ESG (Environmental, Social, and Governance) practices may gain an advantage. The crisis highlights the need for sustainable infrastructure development to balance economic growth with resource preservation. Rating: 7/10

Difficult Terms Data Centre: A facility that houses IT infrastructure like servers, storage systems, and networking equipment to store, manage, and process data. IT Load Capacity: The amount of electrical power that a data center's computing equipment requires, measured in watts (W), kilowatts (kW), or megawatts (MW). Water Stress: A situation where the demand for water exceeds the available amount of usable water, measured by the ratio of total water demand to renewable water supply. Groundwater Extraction: The process of pumping water from underground aquifers. KLD (Kilolitres per Day): A unit of measurement for water volume, indicating the number of kilolitres used per day. SHLCC (State High-Level Clearance Committee): A government committee responsible for approving large industrial and infrastructure projects. SLSWCC (State-Level Single Window Clearance Committee): A government committee that streamlines and approves medium-sized industrial projects. BWSSB (Bangalore Water Supply and Sewerage Board): The statutory body responsible for water supply and sewerage management in Bengaluru. KIADB (Karnataka Industrial Areas Development Board): A government agency that facilitates industrial development by acquiring land and providing infrastructure in Karnataka. RTI (Right to Information): An Indian law that allows citizens to access information from government bodies. Aquifer: An underground layer of permeable rock, sediment, or soil from which groundwater can be extracted.