India’s digital thirst: How Bengaluru’s tech dreams are colliding with a worsening water crisis

In the first part of this series, Down To Earth (DTE) explored what data centres are, why they require vast quantities of water to operate, and how their rapid expansion into water-stressed regions such as Greater Noida is already affecting local communities struggling for access to clean water. This second part travels south to Karnataka, India’s Silicon Valley, to examine how the same pattern is unfolding in and around Bengaluru.

India’s data centres are emerging as one of the world’s most attractive destinations for global investment. The appeal lies in a combination of lower operational costs, competitive labour, and a strategic geographical position that allows companies to serve both domestic and wider South Asian markets efficiently.

A data centre is a facility that houses IT infrastructure such as servers, switches and routers, while also storing and managing the immense volumes of data generated by digital applications and services.

The country now has around 150 operational data centres with a combined IT load capacity of 1,200-1,300 MW spread across Tier-1 cities, according to Deloitte India’s 2025 report Attracting AI Data Centre Infrastructure Investment in India.

“India is steadily emerging as a key hub for data infrastructure in the Asia-Pacific, likely to record the highest capacity addition over 2024-26, more than projected for other APAC countries like Japan, Singapore, Korea, Australia, Hong Kong,” the report noted. The IT load capacity indicates how much computing equipment a data centre can support, measured in watts.

Source:  Deloitte India’s 2025 report Attracting AI Data Centre Infrastructure Investment in India”

But India’s growing digital infrastructure comes with a hidden cost. The country is also among the top 25 nations facing extremely high water stress each year, according to the United States-based global research organisation World Resources Institute’s Aqueduct Water Risk Atlas. Water stress measures the ratio of total water demand from domestic, industrial, irrigation and livestock to the available renewable surface and groundwater supplies.

A 2025 analysis by the United Kingdom-based non-profit Planet Tracker highlighted that China, India and Japan have the highest number of data centres in Asia. India ranks second after Indonesia, and as many as 50 of its data centres are located in “extremely high” water-stressed regions.

To understand the impact of this expansion, DTE visited two major data centre hubs — Bengaluru and Gautam Buddha Nagar (which we will look at in part 3) — to examine how these facilities consume water and how they affect local communities

Data centres in India’s Silicon Valley

If you were to search for Akkalenahalli Mallenahalli — a village in Devanahalli taluk, Bengaluru Rural district, Karnataka — on Google Maps, you might struggle to find it. Yet, this small settlement of about 250 people is undergoing dramatic change.

The village opens through a narrow lane lined with tightly packed houses that lead to a vast open ground. On one end lies a cordoned-off site buzzing with heavy construction. Akkalenahalli Mallenahalli is seeing a real estate boom, with real estate giants such as Birla, Godrej and Tata building residential complexes here. While prospective buyers and construction workers are a common sight, the arrival of a new proposed data centre is far less conspicuous.

The Karnataka government granted “in-principle approval” to a proposal by ETL Secure Space Ltd, a subsidiary of Chennai-based IG3 Infra Ltd that develops and manages secure business infrastructure, to establish a data centre facility in the village at an investment of Rs 490.5 crore, read a government order dated February 5, 2024. The order stated that the company must obtain environmental clearance either from the Union Ministry of Environment, Forest and Climate Change, or from Karnataka’s Department of Forest, Ecology and Environment.

DTE could not confirm whether construction of the data centre had begun, given the sheer scale of building activity in the area. None of the village residents interviewed knew what a data centre was. For now, they are fighting more immediate battles: basic access to land and water, and fear that new data centres and housing projects will worsen their struggle.

Venugopal, a long-time resident, recalls how his family was displaced some seven decades ago when land near their original homes was acquired by Mathikere Sampangi Ramaiah, an educator, philanthropist and industrialist. “My father tells me we lived peacefully then, with plenty of water from wells and a tank. One night, we were driven out and we lost everything,” he said. 

The displaced villagers resettled on the outskirts of the village. “We don’t have groundwater here. Every morning, we get water from borewells in the neighbouring village,” Laghumaya, a welder, told DTE.

The question now is whether there will be enough water for everyone. According to the government order, ETL Secure Space has been allotted 650 kilolitres per day (KLD) — about 237,250 kilolitres annually, equivalent to the yearly drinking and domestic water needs of roughly 5,000 people or 20 times the village’s current population. The supply will likely come from the Anneshwara Gram Panchayat, which provides borewell water to 11 villages, including Akkalenahalli Mallenahalli. The order does not specify whether the company has a permit for groundwater extraction.

Devanahalli, on Bengaluru’s northern outskirts, is one of the city’s fastest-growing regions, home to software, hardware, financial services and aerospace hubs, and increasingly, to data centres. A review of minutes from Karnataka’s State High-Level Clearance Committee (SHLCC) and State-Level Single Window Clearance Committee (SLSWCC) by DTE showed that at least eight data centres have been approved in Devanahalli between 2013 and 2025.

The SLSWCC evaluates projects worth between Rs 15 crore ($1.7 million) and Rs 500 crore ($56.4 million), while larger projects go to the SHLCC. But the area’s water situation is dire: Devanahalli has no perennial source of water, relying solely on groundwater. The stage of groundwater extraction or the percentage of water used relative to annual extractable resources, is 169 per cent, or 69 points above the permissible limit. This is the highest level in the entire Bengaluru Rural district, which includes Devanahalli, Doddaballapura, Hoskote and Nelamangala, according to the Report on Dynamic Ground Water Resources of Karnataka 2024 by the Ground Water Department and Central Ground Water Board. The report also notes that there is no net groundwater available for future use.

While Devanahalli is fast emerging as a new hotspot, Whitefield in Bengaluru Urban district is already a dense data centre hub. According to Data Center Map, a Denmark-based organisation maintaining a global data centre directory, Whitefield hosts six of Bengaluru’s 30 data centres. It is also Karnataka’s densest data centre cluster, home to over 5,500 IT companies, including several global cloud and internet giants.

DTE visited the Iron Mountain Data Center, an 80,000-square-foot facility supporting up to 4 megawatts (MW) of IT load in Pattandur Agrahara, Whitefield. The facility is operated by Web Werks, headquartered in Mumbai, in partnership with the US-based Iron Mountain Data Centers, a global data infrastructure platform.

Ashok, a small business owner who has lived in Pattandur Agrahara for more than five decades, says water scarcity has worsened dramatically over the past 10 years. “We ran out of borewell water five years ago. Even at 2,000 feet, there’s no water, especially in summer. We get water supply from the Rivet Cauvery only once a week, which is barely enough,” he says. To make up the shortfall, Ashok orders two to three private tankers each month.

Lakshman Kumar, born and raised in the area, has seen the region’s transformation from farmland to urban sprawl. “We had no problem five decades ago. It all began when industries started moving in, and people followed,” he said. Kumar now manages Shanders Springdale, an apartment complex with 100 homes. “The borewells have gone dry and Cauvery water comes just once a week. We need four or five tankers every day — at Rs 1,600 [around $18] per tanker,” he says.

Neither resident knew what a data centre was, or that the Iron Mountain facility was operating nearby, though both vaguely recall seeing the building.

Minutes from a 2022 meeting of SHLCC show that the operator sought 10 KLD of water from the Bangalore Water Supply and Sewerage Board (BWSSB), the autonomous body formed by the State legislature under Bangalore Water supply and Sewerage Board Act in 1964 for water supply and sewage disposal. At this rate, the facility’s annual requirement would total around 3,650 kilolitres.

To put that into perspective, using the government’s estimate of 135 litres per person per day for domestic use, a family of five would consume 775 litres a day (LPD) — or 246 kilolitres annually. The data centre’s annual water use would therefore equal that of roughly 15 families.

The SHLCC approved the project, stating that the water could be supplied either by BWSSB or “the company’s own source”. When DTE contacted BWSSB, officials confirmed that the agency does not supply water to the facility. This suggests the company is sourcing water independently — either through its own borewell, reused water or through some other arrangement.

Favouring data centers

Bengaluru has a lot going for it: A thriving IT ecosystem, robust connectivity to major South Indian cities, a skilled workforce, steady power supply, and investor-friendly government policies. These make it one of India’s most attractive destinations for data centres.

Karnataka’s Data Centre Policy 2022 aims to position the state as the “Destination of Choice” for futuristic data infrastructure, targeting domestic and foreign investments worth Rs 10,000 crore ($1.13 billion) by 2027 and the development of over 200 MW of data centre capacity by 2025.

The policy — implemented by the agency Karnataka Innovation and Technology Society (KITS) under the Department of Electronics, IT, and Biotechnology — introduced a single-window clearance system to streamline approvals, managed by Karnataka Udyog Mitra under the Department of Commerce and Industries. Once a company applies to establish a data centre, its proposal is reviewed by either the SLSWCC or SHLCC, followed by environmental clearance. KITS then issues a registration or provisional registration certificate.

The policy also promotes the creation of new technology clusters across Karnataka, extending beyond Bengaluru. So far, only one major project, NxtGen Data Centre and Cloud Technologies Pvt Ltd in Bidadi Industrial Area, Ramanagara, has materialised, spanning 10 acres with an investment of Rs 2,000 crore ($225.2 million).

The policy document mentions that the state would provide uninterrupted 24x7 water supply. It, however, is silent on the need for sustainable use of water, given the water-scarcity issues in Bengaluru. 

Yotta Data Services Pvt Ltd, headquartered in Mumbai, disputed the perception that state policies allow unrestricted freshwater use. “The assumption that state policies give datacenters unrestricted access to freshwater is incorrect. Karnataka’s policy prioritises air-cooled, hybrid, and closed-loop systems, reducing dependency on water-intensive cooling,” the company told DTE in November. Closed-loop cooling means water is continuously recirculated rather than consumed or discharged, and requires only minimal top-up.

The company further claimed that Karnataka has explicit clauses requiring data centres to use treated, non-potable water and build on-site recycling systems, and not draw from drinking water reserves. However, this statement is not corroborated by the text of the policy itself. BWSSB chair, Ram Prasath Manohar V, told DTE in an interview that there is no mandate for data centers in the state to use recycled water.

Interactions with state officials suggest a significant knowledge gap regarding these “water-saving mandates.” In August, DTE met with Rahul Sharanappa Sankanur, the chief executive officer of KITS — the very agency that drafted the operational guidelines for Karnataka’s Data Centre Policy 2022. “I do not know the nitty-gritty of the policy,” he stated, directing the reporter to a consultant who did not respond to queries despite multiple requests and reminders. 

Further, none of the government officials DTE spoke with mentioned that “the policy prioritises air-cooled, hybrid, and closed-loop systems when asked about water consumption”.

Tracing sources

Bengaluru depends on just two primary water sources, local groundwater and surface water drawn from the River Cauvery, which is pumped from nearly 100 kilometres away. The entire Bengaluru region, including Devanahalli, is officially classified as over-exploited — a designation applied when groundwater extraction exceeds 100 per cent of the annual recharge. By 2013, the whole of Bengaluru district had been ‘notified’ under this category by the state government, signifying over exploitation of groundwater reserves.

When data centre developers apply for project approvals, they must specify their proposed water source — whether from the BWSSB, the Karnataka Industrial Areas Development Board (KIADB), local municipal bodies, or private arrangements such as their own borewells. However, the minutes of SLSWCC and SHLCC meetings reviewed by DTE provide no clear indication of whether groundwater is among these approved sources.

BWSSB supplies water to industries at a rate of Rs 99 per kilolitre. Its records show that five data centres in Bengaluru collectively receive around 1.29 lakh litres (129,000 L) of water monthly. However, the agency acknowledges that for data centres located within larger buildings, water use cannot be precisely measured because the entire premises — often shared with multiple companies — is supplied under one connection.

All groundwater users, including industrial units, must obtain permits to drill new borewells and register existing ones, under Section 11 of the Karnataka Ground Water (Regulation and Control of Development and Management) Act, 2011 and accompanying Rules of 2012. A notification by the Karnataka Groundwater Authority declares the entirety of Bengaluru — both urban and rural districts — as a notified area. This means that every borewell requires prior permission.

No-objection certificates (NOC) for digging borewells can be obtained either from BWSSB or directly from the Ground Water Authority. For industries located in designated industrial zones, the Karnataka Industrial Areas Development Board (KIADB), a statutory body established under Section 5 of the Karnataka Industrial Areas Development Act, 1966,is responsible for supplying water.

To understand how water is allocated to data centres and whether they hold valid groundwater extraction permits, DTE filed Right to Information (RTI) applications with Karnataka Udyog Mitra, KIADB, and the Ground Water Authority. Karnataka Udyog Mitra disposed of the request without providing details, citing a lack of clarity in the queries, while replies from the other two bodies remain pending.

Based on publicly available documents, including minutes of government meetings between 2013 and 2025, as well as data from BWSSB, DTE estimates that Bengaluru’s data centres together have permissions to consume roughly 4.9 million litres of water annually (or around 49,27,240 litres per day) (See table below). However, this figure is only a rough approximation, as comprehensive data on actual consumption across all facilities remains unavailable.

Experts warned that the unchecked expansion of data centres could worsen the environmental stress on an already water-scarce city, especially after the severe water crisis Bengaluru faced during the summer of 2024.

“I don’t think it’s wise for new data centres or any water-intensive industries to come up in Bengaluru,” Khushbu Birawat, a full-time researcher at Paani Earth, a citizen-led think tank based in the city, told DTE. “If 10 such facilities are built in Devanahalli, how can we ensure they don’t deplete the aquifers further?”

The government must strictly monitor and meter groundwater extraction as proposed in a pending Bill and invest in aquifer recharge, she stated. “We have good laws on paper. The question is how we enforce them. Bengaluru’s geography simply isn’t suited for water-guzzling industries,” she said. “We should explore whether tier-2 and tier-3 cities can take on some of this pressure, which could also generate local employment. I’m not saying we don’t need AI — but we must balance the need for growth with the need for sustainability.”