Water proximity must guide data centre projects: TERI expert at Urban Adda 2026

Data centre projects in water-stressed regions should be assessed against the natural carrying capacity of river basins and watersheds, rather than only project-level requirements, Anshuman, director, water resources at The Energy and Resources Institute (TERI), said on Tuesday, warning that growing industrial demand could deepen inequitable access to water

Data centre projects in water-stressed regions should be assessed against the natural carrying capacity of river basins and watersheds, rather than only project-level requirements, Anshuman, director, water resources at The Energy and Resources Institute (TERI), said on Tuesday, warning that growing industrial demand could deepen inequitable access to water.

The impact, he said, would be felt first by vulnerable communities, particularly in regions such as Delhi, Maharashtra, Tamil Nadu and Karnataka, where water stress is already a concern.

“Anything below 1,000 cubic meters per capita is scarce and we are adding another dimension to it,” Anshuman said at a panel during the Raahgiri Foundation’s annual event Urban Adda. “Data centres or the industries at higher level wouldn’t feel the pinch first. The pinch will be felt by the poor, the marginal people who do not have equitable access,” he said.

The warning comes as India rapidly expands its data-centre and AI infrastructure, with experts saying companies continue to place greater emphasis on power and connectivity than on long-term water availability.

“Yet, operators continue to focus primarily on other infrastructure requirements, with 75% prioritising network connectivity and 67% focusing on power reliability,” Lall said at the same panel.

The mismatch, he said, raises questions over whether water systems around new facilities can support them throughout their operating life. “We are literally fooling ourselves,” Lall said, warning that companies risk creating operational “white elephants” if water availability is not considered at the project-planning stage.

The issue also extends beyond the volume of water directly consumed by a data centre to its relationship with surrounding communities, Lall said. Corporate boards should therefore assess the complete water cycle before approving projects, rather than treating water as an operational issue after a facility is established.

He also contrasted water management with companies’ approach to carbon emissions, saying water cannot be addressed through an equivalent offset mechanism. “It’s easy to offset the carbon credits. I don’t think there is an offset for water credits,” he said.

The water footprint of data centres also extends beyond their cooling systems, Sangeetha Raghuram, partner (sustainable operations), India, at ERM, said.

She said Water Usage Effectiveness (WUE), commonly used to assess data-centre water consumption, did not capture the full footprint of the infrastructure. “The second much more major part of the consumption happens upstream... if it is a coal-based power source, your water footprint is much larger than what the WUE ratio would indicate,” Raghuram said.

She also flagged difficulties in securing treated wastewater for data centres. While companies increasingly discuss using treated wastewater, relatively few facilities have access to it, she said, adding that the cost of laying pipelines can cause “economic implications to go haywire”