India’s AI data centres will require 26.3 GW of power by FY32, marking a significant revision in the country’s electricity demand outlook as artificial intelligence adoption accelerates across industries. According to the Union Ministry of Power, AI-driven data centres are expected to add an additional 26.3 gigawatts (GW) of electricity demand by 2031-32, nearly doubling the government’s earlier estimate of 13.56 GW released in March this year. The projected demand highlights the rapid expansion of AI infrastructure in India, fuelled by billions of dollars in investments from domestic conglomerates and global technology giants.

The government has indicated that most of this additional power requirement will be met through renewable energy while strengthening the national grid to support future digital growth.

AI Infrastructure is Expanding at an Unusual Pace

In a written reply to Parliament, Minister of State for Power Shripad Naik stated that the projected 26.3 GW additional load from AI data centres will be integrated into the national grid and will primarily rely on renewable energy sources. The revised estimate reflects the growing demand for high-performance computing facilities as businesses increasingly deploy AI models, cloud services and advanced digital applications.

Major investments announced over the past few months demonstrate the scale of this transformation. HCLTech recently partnered with Sarvam AI to establish a $1.5 billion AI data centre in Odisha, while Google is developing a $15 billion AI data centre hub in Visakhapatnam. Microsoft has also committed $3 billion to expand its AI and cloud infrastructure across India.

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India’s Digital Economy Driving Higher Electricity Demand

The rapid rise in AI adoption is directly influencing India’s energy planning.

• According to Wood Mackenzie, India’s total data centre capacity is expected to increase from 2.2 GW in 2025 to 12 GW by 2030, representing more than a five-fold expansion.
• AI-specific capacity alone is projected to surge from 275 MW in 2025 to 6,546 MW by 2030.
• The report also estimates that India’s AI market could reach ₹11.7 trillion by 2032, making reliable electricity infrastructure a critical requirement for sustaining future growth.

As AI data centres will require 26.3 GW of Power by FY32, policymakers are accelerating investments in both power generation and transmission infrastructure.

Key Projections at a Glance

Government Strengthens Power Infrastructure

To support rising electricity consumption, the Ministry of Power is expanding transmission infrastructure under the National Electricity Plan (2022-32), which envisages an investment of ₹9,16,142 crore. The government is also modernising the grid through technologies such as Battery Energy Storage Systems (BESS), Static Synchronous Compensators (STATCOMs) and synchronous condensers to improve grid flexibility and renewable energy integration.

Alongside renewable expansion, thermal generation will continue to play an important role in maintaining grid stability.

• The government estimates thermal power capacity requirements will rise to approximately 3,15,000 MW by FY36, compared with 2,11,855 MW installed as of March 2023.
• Since April 2023, around 21,080 MW of thermal capacity has already been commissioned, while 47,545 MW remains under construction and contracts for an additional 16,000 MW have been awarded.

India’s revised projections underline how AI is becoming a major driver of electricity demand. As investments in digital infrastructure continue to rise, ensuring reliable, sustainable and scalable power generation will be essential to supporting the country’s next phase of technological and economic growth.

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