🧠 Food for thought

Implications, context, and why it matters.

Government policy is driving India’s data center investment wave

• STT Global Data Centres India’s potential IPO lines up with policy support meant to bring more money into the sector.
• A 2026 budget proposal offers a 20-year tax holiday to foreign cloud companies that use Ministry of Electronics and Information Technology (MeitY)-notified data centers in India 1.
• The same proposal says overseas firms would not be taxed in India on their global income, easing a concern for investors 1.
• The central government has also given data centers infrastructure status. Another proposal would label them an essential service to help keep them running during disruptions 2.

Fast growth is putting pressure on India’s power and water supply

• India’s data center buildout is adding pressure to electricity and water systems.
• Installed capacity has nearly tripled since 2020, reaching about 1.5 gigawatts (GW) by mid-2025. In 2024, data centers used about 0.5% of national electricity and around 150 billion liters of water a year 3.
• Demand is expected to more than double by 2030, leaving operators to secure dependable power and water, two factors that shape site selection 3.
• That creates a policy tension. States want investment, while regulators may need performance-based sustainability rules to limit the sector’s environmental footprint 3.