NITI Aayog’s Frontier Tech Hub has released the Data Centre Evaluation Framework during October 2026 to help States plan for sustainable growth of data centres. Introduction India’s data-centre capacity has grown from about 375 MW in 2020 to approximately 1.5 GW currently, driven by the growing demand for Artificial Intelligence (AI), cloud computing, high-performance computing and data-intensive digital applications. As India accelerates its AI and digital transformation, data centres are emerging as critical infrastructure underpinning the country's technological and economic ambitions. While this presents a significant opportunity, data centres at increasing scale also place substantial demands on electricity, water, land, connectivity and local infrastructure. The focus therefore needs to move beyond attracting investment to ensuring that projects are developed in locations where the necessary infrastructure and resources can support them over the long term. The Government of India has taken important steps to create an enabling environment for data-centre investments, including a tax holiday until 2047 for eligible foreign cloud service providers leveraging India-based data-centre infrastructure. As investments grow in scale, effective State-level planning and investment readiness will be critical to ensuring sustainable growth of the sector. About the Data Centre Evaluation Framework The Framework, developed with inputs from industry, MeitY, Ministry of Power and DPIIT, provides State governments with a practical approach to planning, evaluating and facilitating data-centre investments. It helps them assess infrastructure readiness, safeguard critical resources and maximise long-term economic and strategic value. A Framework for Investment-Ready and Sustainable Data Centre Growth The Framework is structured around five pillars: Power and Energy; Water and Cooling; Siting and Environmental Sustainability; Economic and Strategic Value; and Policy, Governance and Implementation. To ensure resource sustainability, key recommendations include assessing grid readiness and net grid draw, promoting renewable energy and storage-backed power, and evaluating basin-level water stress and public-supply impacts. The Framework also calls for rainwater harvesting, on-site water treatment and storage, and lifecycle plans for e-waste, batteries and other hazardous waste. To maximise economic value, the Framework recommends identifying suitable data-centre zones, distinguishing colocation from active compute services, linking State incentives to measurable outcomes, and promoting Make in India across IT and non-IT infrastructure. These measures are supported by time-bound approvals, clear accountability and monitoring of project commitments. The Framework is intended to serve as a decision-support tool for State governments, enabling them to evaluate investment proposals against infrastructure availability, environmental sustainability, economic value and implementation readiness. By identifying potential constraints early and providing greater clarity on project requirements, it seeks to improve investment decisions, reduce implementation risks and facilitate sustainable growth of India’s data-centre ecosystem. The Framework seeks to help States plan better, move faster and convert the next wave of data-centre investment into sustainable capacity and lasting economic value. Source : NITIFrontier Tech Hub - Data Centre Evaluation Framework to Help States Plan for Sustainable Growth