India's AI Data-Centre Market to Reach $90 Billion by 2035: Policy Framework Needed

The context is critical: Global AI advancement increasingly depends on massive computational infrastructure requiring enormous electricity consumption and cooling resources. India, positioning itself as a global AI hub alongside its traditional IT services strength, faces a choice—develop data-centre infrastructure responsibly or risk repeating environmental degradation and inequality patterns seen in other infrastructure booms. Current policy gaps mean data-centre development proceeds without comprehensive regulation addressing energy consumption, e-waste management, land use, and data security protocols specific to India's context.

Key facts: Current market size $5.5 billion, projected 2035 size $90 billion; current capacity 1.6 GW, projected capacity 12-14 GW. This 16-fold capacity increase will require substantial electricity generation—India's existing energy infrastructure may face strain. Responsible data-centre regulation must address: energy efficiency standards, renewable energy integration requirements, water consumption management (data-centres require significant cooling water), data localization policies, cybersecurity standards, and e-waste handling. The regulatory framework should balance growth incentives with sustainability requirements.

For examinations: UPSC tests understanding of technology policy, infrastructure regulation, and environmental implications of economic growth. This connects to India's digital sovereignty agenda, climate commitments, and competitive positioning with China and US in AI technology. Prelims: What is India's AI data-centre market projection for 2035? Mains: Discuss how India can balance rapid AI infrastructure growth with environmental sustainability and data security requirements.