As India’s data centre boom accelerates with AI and cloud growth, efficient cooling systems are emerging as critical infrastructure to ensure energy efficiency, reliability, and long-term sustainability in extreme climatic conditions.
India’s digital economy is expanding at a pace few infrastructure sectors have witnessed before. The rapid rise of AI, cloud computing, digital payments, OTT platforms and enterprise SaaS has dramatically increased the demand for computing power; and the data centres that enable it.
India’s operational data centre capacity has already crossed 1.4 GW of IT load, with another 1.4 GW under construction and close to 5 GW in various planning stages. Industry estimates suggest the country could see over $20–25 billion in new investments in data centre infrastructure by the end of this decade, potentially pushing installed capacity beyond 4 GW by 2030.
What is less frequently discussed, however, is the infrastructure that quietly determines whether these facilities operate efficiently, reliably and sustainably.
That infrastructure is cooling.
In modern data centres, managing heat is not just an operational requirement; it is central to uptime, energy efficiency and long-term viability.
The Real Estate Gold Rush Behind Data Centres
India’s data centre boom is no longer limited to technology companies.
The scale of investment has attracted large infrastructure groups, real estate developers and global investors, all looking to participate in what is emerging as a new asset class.
Major conglomerates such as Reliance Industries, Adani Group and Bharti Airtel have been heavily investing in data centre infrastructure. One key example of such activity is the announcement of the Reliance multi gigawatt AI centric data centre in Gujarat, which is potentially also going to be among the largest in the world.
Real Estate developers such as the Hiranandani Group, Anant Raj and RMZ group too are entering the sector with planned large-scale developments.
India’s total data centre footprint is expected to expand from roughly 16 million square feet today to nearly 50–55 million square feet by the end of the decade.
The valuation of data centre infrastructure today moves differently from the traditional commercial Real Estate. Away from square footage alone, the valuation is also impacted by power availability, network connectivity and thermal management.
Among these, thermal management is quickly emerging as one of the most complex challenges.
The Cooling Challenge of High-Density Computing
Modern data centres generate far more heat than their predecessors.
Traditional server environments typically operated at rack densities of 5–10 kW. Today, AI and high-performance computing clusters can generate 20–40 kW per rack, with some specialised GPU environments exceedingly even that.
At hyperscale campuses running thousands of such racks simultaneously, managing heat becomes an engineering challenge of enormous scale.
Cooling therefore represents one of the largest operational energy loads in a data centre, often accounting for 30–40% of total electricity consumption.
Poorly designed cooling systems have a direct and immediate consequences including higher energy consumption, reduced lifespan of equipment, reduced performance of servers and increased risk of downtime. All these not only increase the capital and operational investments, but also have serious macro-economic implications as even minutes of downtime has severe impact for global cloud providers and financial institutions.
Cooling Challenges unique to India:
Infrastructure and cooling in India come with its own sets of challenges rarely seen in temperate markets such as Europe and North America.
1. Higher Temperatures
A large portion of the country where these data centres are being made experience extreme temperatures, often in excess of 40°C for almost half of the year. Maintaining stable operating temperatures under such conditions requires far more robust cooling infrastructure.
2. Humidity Variations
In addition to high temperatures, data centre being built in coastal areas such as Mumbai and Chennai are subject to higher humidity levels as well. These increase the risk of condensation, corrosion and hardware damage thus requiring advanced environmental controls.
3. Energy Costs and Grid Pressure
Data centres by nature consume high amounts of energy to efficiently operate. Cooling systems form a significant portion of this consumption. As we move forward these systems not only need to be reliable in their core function, but also need to optimise power consumption to reduce operational expenses, and also reduce the pressure on the local power infrastructure.
Efficiency as Competitive Advantage
The global benchmark for measuring the efficiency of data centres is through metrics such as Power Usage Effectiveness (PUE). PUE compares the total energy consumption of the facility against the direct usage of power by the computing equipment. Cooling technologies can play a decisive role in achieving lower PUE values.
Modern facilities are increasingly adopting advanced solutions such as Precision air conditioning systems, Hot and cold aisle containment, Intelligent airflow management, Liquid cooling for high-density racks and AI-driven monitoring and thermal optimisation
At the scale at which the data centres currently operate and the massive growth potential we are witnessing, even small efficiency gains translate into substantial operational savings.
Cooling Must Be Designed, Not Retrofitted
One of the most important lessons emerging from global data centre markets is that cooling systems must be integrated at the design stage, not added later as supporting infrastructure.
Early collaboration between data centre developers, real estate planners, infrastructure engineers and energy specialists allows facilities to optimize airflow pathways, equipment placement and power distribution from the outset.
This design-led approach becomes particularly important for hyperscale campuses that may operate for 20–30 years and expand in phases over time.
Cooling Infrastructure of India’s Digital Future
India is on the fast track to become one of the world’s largest digital economies. The infrastructure critical for this growth needs to be designed not for the near term, but keeping in mind the long-term sustainability.
Global cloud providers and enterprise customers planning to operate data centres in India will look at reliability, energy efficiency and environmental performance which is at par with accepted worldwide benchmarks and cooling technology will play a crucial role in that decision making.
At the same time, the rapid growth of this sector presents an opportunity for India to develop locally engineered cooling and energy management solutions tailored to the country’s climatic and operational realities.
As the digital economy continues to scale, it is becoming increasingly clear that data centre cooling is no longer a supporting system; it is a strategic infrastructure layer that underpins the performance of the entire digital ecosystem.
For decision-makers across technology, infrastructure, real estate and procurement, the conversation around data centres must therefore expand beyond servers and connectivity to include the equally critical question of how we cool the cloud.
Author
By Arjun Rathi, Co-Founder and COO, Volks Energie