Can India afford data centres? Follow the water.

Visakhapatnam · August 2026

₹3,000 for a tanker

In August, one of Vizag's drinking-water reservoirs, Mudasarlova, dried up completely. In some neighbourhoods, piped water came once every two or three days.¹

The city's municipal corporation fixes the price of a 5,000-litre tanker at ₹900. Tanker owners were charging ₹3,000, and an official in the city's own water department admitted as much.¹

This wasn't a bad week. In one year, the average groundwater level under the city fell by almost four metres, from 7.65 metres below ground to 11.51.² Brokers in one neighbourhood say tenants now ask about water before they ask about parking.³

Tarluvada, outside Vizag

Meanwhile, on a hill outside the city

In April, a foundation stone was laid in the village of Tarluvada for what is expected to be Google's largest data centre outside the United States.⁴

$15 billion over five years, built with the Adani Group. One gigawatt to start, growing to several. State officials say it could create 1.88 lakh jobs.⁵ The government's own order cites about 6,000 direct jobs and 30,000 indirect ones.⁶ For scale: a Virginia audit found a typical data centre runs on about 50 full-time workers once it is built.⁷

To win it, Andhra Pradesh approved about ₹22,002 crore in incentives.⁶ One of them is a 25% discount on the price of industrial water, for 10 years.⁸ A local group says the state has also promised the project guaranteed water for 20 years.⁹

By August, children were marching through Vizag holding banners that read "We cannot drink DATA".⁹

So the obvious question: is this what's draining Vizag?

The disclosures

The number nobody filed

You'd expect a $15 billion project in a water-short city to come with one clear number: how much water it will use. Instead there are three, and they don't line up.

Google's own campus, if it is air-cooled as promised, really does look light on water. But the state isn't planning one campus. It's planning a 6.5 GW cluster with several players. So we ran the state's own number against the city.

On the state's own estimate, the cluster would need more than half of what the entire city of 2.5 million receives today.

And air cooling has a catch. It swaps water for electricity. Air-cooled chillers can use around 20% more power, and most power plants are themselves cooled with water.¹⁵ One recent study modelled the switch: on-site water fell 97%, power use rose 32%, and total water still came down 44%.¹⁶ So air cooling helps. It just doesn't make the water disappear.

All of India

Zoom out: 10,000 drops

Now step back from Vizag to the whole country.

Every year, India pumps out about 247 billion cubic metres of groundwater.¹⁷ Picture all of it as the 10,000 drops below.

Most of the rest goes to farms. Agriculture accounts for around 80% to 90% of India's water withdrawals.¹⁹

But there's a twist. Data centres don't spread out. About 75% of India's sit in water-stressed regions, and Mumbai and Chennai alone took 70% of last year's new capacity.²⁰ Of Karnataka's roughly 32, nearly 30 are in Bengaluru.²¹

So if it isn't the servers, what is the biggest new claim on India's water? You've probably paid for some of it this week.

The fuel pump

The drinker in your petrol tank

Next time you fill up, look at the pump. India now blends its petrol to E20: one part in five is ethanol.

India hit that target five years early. Ethanol buying went from about 38 crore litres in 2013-14 to over 1,200 crore litres projected for 2025-26.²² It cuts oil imports, and that's a real win.

But ethanol is made from crops. This year's biggest source was maize, then rice from government stocks, then sugarcane.²³ And crops drink.

Numbers from a government study, shared by the Food Secretary: making one litre of ethanol from rice takes about 10,790 litres of water. From maize, about 4,670. From sugarcane, about 3,630.²⁴ The sugar industry disputes this. Its own study puts drip-irrigated cane at about 1,634 litres.²⁵

Even on the most generous assumptions we could build, the fuel needs more than 20 times the water of every data centre in India. On the government's own numbers, it's in the hundreds.

The water is also subsidised twice over. The Food Corporation sold rice to distilleries at ₹2,320 a quintal against an estimated economic cost of ₹4,173.²⁶ Maize planting jumped by about 9 lakh hectares in one season, much of it in states with stressed groundwater, while pulses and oilseeds shrank.²⁷ And in October, the 2026-27 ethanol tender shut out cane juice and sugar entirely, pushing even more of the load onto grain.²⁸

June to September 2026

Then the rain didn't come

Every promise so far, to a city, a crop or a data centre, was made assuming the monsoon shows up. In 2026 it mostly didn't.

The season ended at 87% of normal, India's weakest monsoon since 2015 and the fourth-lowest since 2001. El Niño formed in June and was strong by the end of the season.³⁰

The South, home to Vizag, Bengaluru, Chennai and Hyderabad, took the hardest hit. By mid-October, its big reservoirs held far less than they usually do at that time of year.

And forecasters aren't done. Researchers at the IRI warn El Niño may turn very strong by late 2026, which raises the risk for next year too.³¹

Bengaluru · 1973 to 2020

The city that paved its sponge

Where does rain go after it falls? In a living landscape, into soil, lakes and aquifers, where it waits for the dry months. In a city, it hits concrete and runs into a drain.

India is urbanising fast. About 600 million people, roughly 40% of the country, are expected to live in towns and cities by 2036. Cities already draw about 45% of their water from the ground, and treat only about 28% of the sewage they produce.³⁴

Here is what that looks like in one city. Drag through the years.

In 1973, about two-thirds of Bengaluru was green and 8% was built over. By 2020, 93% was built over. Vegetation was down to 3%.³⁵

The lakes went with it. Bengaluru's water-spread area shrank from 2,324 hectares in 1973 to 696 in 2023, and 98% of its lakes are encroached.³⁶ In one neighbourhood IISc studied, groundwater that sat at 100 feet while a lake existed dropped to 600 feet within six years of the lake being removed.³⁷

Forests

Is India getting greener? Both answers are true

Ask the government and the satellites the same question, and you'll get opposite answers.

How can both be true? India's official count treats any patch over one hectare with at least 10% tree canopy as forest, whoever owns it and whatever it's used for.⁴⁰ Plantations and orchards count. On paper, a cleared old forest and a new plantation can cancel out.

For water, that difference matters. Old forest above a reservoir works like a sponge; a young plantation doesn't. That's why the Vizag fight keeps coming back to land. The state's own expert committee noted that about 90% of the Tarluvada site lies inside a reserve forest,⁴² and another site sits next to the Kambalakonda sanctuary and the Mudasarlova reservoir, the one that ran dry in August.⁹¹

Six countries

The world already ran this experiment

India isn't the first place to ask whether it can afford thirsty data centres. Tap through what happened elsewhere.

See the pattern? Outside the US, resistance rarely killed a data centre. It forced redesigns, smaller footprints, disclosure, and rules on where they can go.

India's version has already started. In Thane, residents sent Amazon and the city a list of written questions about its planned campus.⁵⁵ Amazon answered on record: no water for cooling, and a permit of 0.01 million litres a day for its staff.⁵⁶ In Vizag, the High Court let construction carry on, but at the developer's own risk: money spent now won't count in its favour if the final ruling goes the other way.⁵⁷

The verdict

So, can India afford data centres?

Back to the question, now with the whole ledger in front of us. Here's how each common claim holds up.

Yes, India can afford data centres. What it can't afford is promising water it hasn't counted.

Karnataka's data centre policy promises uninterrupted water to data centres without saying who goes without in a drought.²¹ Vizag's project reportedly comes with a 20-year guarantee. The fuel mandate has no water audit. And cities keep building over the lakes that used to refill them. In a year when the rain fell 13% short, all of those promises draw from the same tank.

What you can take from this

Five things worth holding on to

1. Watch the ledger, not the logo.One campus is small. A 6.5 GW cluster, a national fuel mandate and a paved city are not.
2. Ask for the number.No major state policy makes data centres publish their water use.²¹ An RTI asking AP's environment authority or APIIC for the operating water figure is a real first step.
3. Water first, promises second.A 20-year supply guarantee should come after the Polavaram canal actually delivers, not before.
4. Audit the fuel, not just the servers.Map where ethanol crops are grown against where groundwater is falling, as researchers are now urging.²⁹
5. Treat lakes as infrastructure.A lake isn't empty land waiting for a building. It's the cheapest water storage a city will ever have.

India can afford data centres. It can't afford to keep promising water it hasn't counted.