Andhra Pradesh is moving to make sustainability a central condition of its data-centre ambitions, with the state requiring that at least 70% of the power used by such facilities come from renewable sources, IT Minister Nara Lokesh said on Thursday.
The policy signal comes as the state positions Visakhapatnam as a major data-centre hub in its bid to attract large technology investments and build out digital infrastructure. But unlike many aggressive investment pitches that focus primarily on land, tax incentives and connectivity, Andhra Pradesh is framing its pitch around the environmental realities of the sector itself — especially the heavy demands data centres place on electricity and water.
Speaking at a fireside chat organised by the Public Affairs Forum of India (PAFI), Lokesh said the state was taking a "holistic approach" to data-centre development by planning for energy, water and other resource requirements together rather than treating them as separate issues.
"The first thumb rule is that a minimum 70% of the energy used by data centres must come from renewable sources," Lokesh said, referring to solar, wind, pumped storage and battery-based energy. The requirement, he suggested, is intended to ensure that the state's digital expansion does not come at the cost of its environmental commitments or local resource stress.
Data centres have become one of the most sought-after infrastructure assets in India's technology economy, but they are also among the most resource-intensive. Their servers and cooling systems require uninterrupted power, and their operations can consume large quantities of water, particularly in hot climates or in facilities that rely on water-based cooling. As states compete to host these projects, questions around sustainability, grid reliability and water security have become increasingly important.
Andhra Pradesh's answer is to tie the sector's growth to renewable energy availability and to plan water supply alongside industrial expansion. Lokesh said the state is developing a data-centre cluster in Visakhapatnam and is also planning to meet water requirements through the Polavaram Left Bank Canal.
According to Lokesh, the Polavaram project would help channel water that would otherwise flow into the Bay of Bengal, redirecting supplies towards Visakhapatnam to support the needs of data centres. The state is also encouraging companies to set up desalination plants, he said, adding that one company is already establishing such a facility.
That detail is significant because water availability has emerged as one of the most sensitive issues in the expansion of digital infrastructure. While data centres are often discussed in terms of cloud computing, artificial intelligence and global connectivity, their physical footprint can be substantial, and their cooling needs can place pressure on local water systems. Andhra Pradesh's effort to pair industrial growth with desalination and canal-based supply underscores the extent to which resource planning is now part of the competition for technology investment.
Lokesh's remarks also reflect a broader shift in how Indian states are trying to attract large-scale digital projects. Rather than offering only land and policy incentives, Andhra Pradesh is attempting to differentiate itself by promising a framework that addresses environmental concerns upfront. That approach may appeal to global technology firms facing increasing scrutiny over emissions, energy sourcing and water use in their data-centre operations.
Visakhapatnam, with its coastal location and emerging infrastructure base, is being positioned as the centrepiece of that strategy. The city's development as a data-centre cluster could bring new investment, jobs and ancillary services, but it will also require dependable power systems, water planning and long-term regulatory clarity.
Lokesh said Andhra Pradesh was seeking to take a "holistic approach" to data-centre development by addressing energy, water and other environmental requirements together. In a sector where scale often collides with sustainability concerns, the state is betting that a stricter, more resource-conscious model will make it more attractive, not less.
For Andhra Pradesh, the challenge now will be turning that pitch into infrastructure on the ground — and proving that a fast-growing digital economy can be built without ignoring the environmental costs that usually accompany it.