# Data Centres: India Needs Right Terms

> India must welcome AI data centres but set clear terms to avoid resource strain.
- Title: Data Centres: India Needs Right Terms · mint | Shortify
- Summary: India must welcome AI data centres but set clear terms to avoid resource strain. India should prioritize resource efficiency over incentives for AI data…
- Keywords: data centres, india, niti aayog, power, water, renewable energy, cloud services, hyperscalers, union budget, news, Data, Centres
- Source: mint — https://livemint.com/opinion/online-views/nageswaran-poojari-data-centres-are-welcome-in-india-but-on-the-right-terms-11792946621498.html
- Author: V. Anantha Nageswaran,Akash Poojari
- Published: 2026-10-26T08:30:51+00:00
- Read time: 1 min
- Topics: data centres, ai, india, niti aayog, power, water, renewable energy, cloud services, hyperscalers, union budget, news
## Data Centre Resources
Emerging economies lack space for data centres due to scarce power, water and land.

> The resources that data centres need are largely spoken for in most developing economies
## Power and Water Constraints
Every unit of power for a data centre reduces availability for factories, irrigation or households.

> Every unit of power committed to a data centre is a unit not available to a factory, an irrigation pump, or a household still making its way up the energy ladder
## Financial Risks
Data centres create short-term commitments versus long-term grid and water investments.

> The building and its power supply will outlast the chips, but the tenant’s economics rests on the chips
## Local Data Concerns
Hosting data centres doesn't guarantee local data retention for citizens.

> Hosting a facility does not necessarily keep citizens’ data at home either
## Global Impact
Hyperscalers lease data centres with short-term obligations that risk domestic costs.

> In an emerging economy, the developer, its lenders and the distribution company that serves the facility are all exposed to a single tenant
## Policy Responses
India's states compete with electricity duty exemptions and tariff subsidies for data centres.

> Indian states, meanwhile, are moving the other way, competing to attract data centres with electricity duty exemptions of up to two decades
## Niti Aayog Framework
Niti Aayog's data centre evaluation framework ties approvals to verified resource readiness.

> It ties approvals to verified readiness of power, water and land at each stage of capacity addition
## Key Gaps
The framework lacks tenant exit plans and cost-reflective tariffs for power and water.

> It says little about what happens if the tenant leaves. Grid and water assets built for one customer on a short lease need minimum-offtake commitments
## Urgent Need for Terms
India must settle terms before committing resources to avoid long-term costs.

> Ajay Banga may well be right about most emerging markets. India is an exception, because the hyperscalers are coming
## Key takeaway

India should prioritize resource efficiency over incentives for AI data centres to prevent domestic costs while attracting global tech investment.