NITI Aayog has launched a Data Centre Evaluation Framework to guide states in assessing proposals for new data centres, focusing on long-term sustainability, infrastructure availability, and contribution to the local economy.
NITI Aayog on Wednesday launched a Data Centre Evaluation Framework to help states assess proposals for new data centres, identify infrastructure gaps and link incentives to measurable outcomes such as skills, innovation and sustainable resource use.
The framework aims to help states plan for the growing data centre industry while ensuring adequate availability of electricity, water and other infrastructure needed to support long-term expansion. Debjani Ghosh, Distinguished Fellow at NITI Aayog, in an exclusive conversation with ANI, said that states must evaluate data centre proposals by considering not only the investment they could attract but also their long-term sustainability and contribution to the local economy.
Evaluating Proposals for Sustainability
“What we have done is create a common set of criteria which can be used by states to evaluate proposals so that as they approve these proposals, they do it not just keeping in mind today's investment, but how sustainable this is and how much of value this can add to the local economy,” Ghosh said.
Global Opportunities and Challenges
She said the number of data centres being planned globally is increasing significantly, bringing substantial investment opportunities. However, countries and states could face challenges related to electricity and water availability if they approve projects without adequate long-term planning.
Power Demand and Clean Energy Advantage
Ghosh said global investments in AI-related data centres over the next few years are expected to cross USD 1 trillion, creating an opportunity for India to attract a significant share of the investment. She said India needs to plan proactively to ensure that sufficient infrastructure, water, power and skilled people are available to support this growth. According to Ghosh, global data centre power requirements could reach 90 gigawatts over the next three to four years, based on the ITU prediction she cited. She said the gap between power demand and available supply was around 50 gigawatts globally, which could fall to around 20 gigawatts if renewable energy is included. “Countries like India that can provide access to clean energy can gain tremendously and capture a large part of the AI value,” she said.
How States Can Use the Framework
NITI Aayog, in its report, said states could use the evaluation process to identify infrastructure and resource constraints at an early stage, compare projects on a consistent basis and determine the support and enabling measures needed for implementation. It also said states could link incentives and other support to measurable outcomes, including domestic industry participation, skills, innovation and sustainable resource use.
The framework is intended to support decision-making rather than prescribe a uniform approach or create an additional layer of regulation. States can apply the common assessment principles according to their priorities, resource availability and development objectives.
The report said the framework aims to help states move beyond competition for investment announcements towards competition based on investment readiness, infrastructure quality and sustainable economic value. It also seeks to support timely and predictable project implementation while ensuring that data centre growth contributes to long-term economic development and public interest.
Preparing for Future Demand
Ghosh said India could meet the emerging demand if states planned better and assessed future requirements in advance. She said the objective was to help states prepare for demand rather than face shortages after projects had been approved. (ANI)
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