Kohli of the Startup Policy Forum said Malaysia’s decision underscores the risks of expanding too quickly without coordinated infrastructure planning.
“The lesson isn’t to slow down,” she said, “but to plan and execute smartly”.
She added that Indian authorities are already moving in this direction: “A national data centre policy is under discussion, and states such as Tamil Nadu and Maharashtra have embedded green and sustainability norms early.”
“With the right coordination across power, water, zoning and governance, India can set a global benchmark for scaling digital infrastructure responsibly and durably,” said Kohli.
She also pointed to innovation emerging from within India’s tech ecosystem.
“Indian startups, such as Vigyan Labs, are already developing intelligent energy optimisation solutions, paving the way for low-carbon digital infrastructure and greener data centres.”
Water management, however, remains a major challenge. While the use of non-potable water is expected to become standard for data centre cooling, it may not be sufficient to meet growing demand.
This is where desalination could play a critical role.
Chennai currently operates three desalination plants, with a fourth expected to be completed this year. Mumbai, meanwhile, announced in December 2025 that it will build its first desalination plant.
Energy presents an equally pressing issue.
Making renewable electricity a mandatory source for data centres would significantly reduce their environmental footprint, but doing so would require India to rapidly scale up its renewable energy capacity to meet rising demand.
Kawoosa said the sector has “long term potential for growth in India”, but added that how effectively concerns over resource constraints and environmental risks are managed remains to be seen.
https://www.channelnewsasia.com/asia/india-ai-data-centre-water-power-environment-5894041
