NITI Aayog's Frontier Tech Hub has released a Data Centre Evaluation Framework on 14 October 2026 to help Indian states plan for sustainable growth of data centers. The framework was unveiled in the presence of Prof. Abhay Karandikar (Member, NITI Aayog), Shri Anurag Jain (CEO, NITI Aayog), Ms Debjani Ghosh (Distinguished Fellow, NITI Aayog), and representatives from the Ministry of Power, Ministry of Electronics and Information Technology (MeitY), and Department for Promotion of Industry and Internal Trade (DPIIT).
The framework provides state governments with a practical approach to planning, evaluating, and facilitating data-center investments, helping them assess infrastructure readiness, safeguard critical resources, and maximize long-term economic and strategic value. India's data-center capacity has grown significantly from approximately 375 MW in 2020 to about 1.5 GW currently, driven by growing demand for Artificial Intelligence, cloud computing, high-performance computing, and data-intensive digital applications.
The framework is structured around five key pillars: Power and Energy; Water and Cooling; Siting and Environmental Sustainability; Economic and Strategic Value; and Policy, Governance and Implementation. Key recommendations include assessing grid readiness and net grid draw, promoting renewable energy and storage-backed power, evaluating basin-level water stress and public-supply impacts, implementing rainwater harvesting and on-site water treatment, and developing lifecycle plans for e-waste and hazardous materials.
To maximize economic value, the framework recommends identifying suitable data-center zones, distinguishing colocation from active compute services, linking state incentives to measurable outcomes, and promoting Make in India across both IT and non-IT infrastructure. These measures are supported by requirements for time-bound approvals, clear accountability, and monitoring of project commitments.
The Government of India has created an enabling environment including a tax holiday until 2047 for eligible foreign cloud service providers using India-based data-center infrastructure. The framework serves as a decision-support tool to help states evaluate investment proposals against infrastructure availability, environmental sustainability, economic value, and implementation readiness, aiming to improve investment decisions and reduce implementation risks.