NITI Aayog Launches Sustainable Data Centre Framework

NITI Aayog released a Data Centre Evaluation Framework on October 14, 2026 to standardise state-level assessment of data centre resource and infrastructure requirements. The framework aims to guide India's data centre capacity, projected to grow from 1.4 gigawatts to 8 gigawatts by 2030, towards sustainable development. NITI Aayog's Frontier Tech Hub developed the framework as a decision-support tool for state authorities. It provides common assessment principles without creating additional regulation. "Intended to support decision-making, not prescribe a uniform approach or create an additional layer of regulation," NITI Aayog said.

Key Assessment Criteria

The framework mandates evaluation of water stress, hazard exposure, land-use conflicts, grid capacity, and energy-water efficiency metrics against BIS standards. It proposes identifying high-risk areas for development restrictions. A single AI data centre could consume up to 20 lakh litres of water per day. NITI Aayog recommends a 20-30-year seasonal catchment water balance for long-term water assessments. States should validate water sources independently in high-stress locations. Recycled or treated water counts toward supply only when contracted and available from the commissioning stage. The framework also requires assessment of design-stage Power Usage Effectiveness (PUE), Water Usage Effectiveness (WUE), and Carbon Usage Effectiveness (CUE) against Bureau of Indian Standards, with post-commissioning measurement and reporting.

State Implementation Requirements

States must designate single-point approval authorities, publish digital approval matrices, and coordinate with power and water utilities for project readiness. Each state must name a nodal agency to coordinate approvals. They must publish a State-wise Data Centre Approval Matrix listing all clearances, issuing authorities, processing times, and escalation mechanisms. This matrix must be merged into one digital interface for coordinated submission, processing, and tracking. States are advised to prepare joint power-readiness plans with developers and utilities. Additional electricity load can only be approved after infrastructure is commissioned. Facilities requiring more than 20 MW must have automated demand-response readiness and telemetry integration with State Load Dispatch Centres.

Sustainability and Accountability Measures

The framework requires renewable energy sourcing, water recycling verification, and performance-linked incentives tied to measurable outcomes. States must weigh investment promises against local jobs, environmental risks, and public support requirements. They must assess economic value against public incentives like land concessions and electricity-duty relief. Incentives should be linked to outcomes such as commissioning milestones, renewable energy supply, efficient resource use, local hiring, and domestic procurement. The Centre must publish Net Economic Contribution and performance-linked incentive templates. The Bureau of Energy Efficiency must assess a Designated Consumer pathway for eligible data centres under the Energy Conservation Act, 2001.

Governance and Oversight

MeitY will lead central audits while states retain authority for implementing common parameters and monitoring compliance through digital interfaces. The Ministry of Electronics and Information Technology is designated as the nodal ministry for a centralised audit mechanism to verify operator compliance periodically. States retain responsibility for applying the framework’s common parameters and determining approval conditions. The Centre must maintain a national legal-responsibility matrix and compliance templates. It must also provide a model State notification for continuity treatment covering 24×7 operations and priority utilities. The framework is organised around five pillars: power and energy; water and cooling; siting and environmental sustainability; economic and strategic value; and policy, governance and implementation. For each pillar it outlines detailed criteria and the respective roles of central and state governments. The guidance links approvals to verified readiness of power, water, land and connectivity. It seeks to align investment promotion with long-term economic development and public interest. States must integrate the framework into their digital single-window systems for coordinated clearance processing.