Key Details
CII’s Data Centers: The Future Economy of Telangana distinguishes the State’s substantial project pipeline from capacity already operating and sets out proposals for supporting growth more sustainably.
Capacity: About 300 MW is operational and 2 GW is under development; the State’s target is 5 GW by 2029. More than 11 GW is covered by memoranda of understanding, which are not commissioned capacity.
Policy proposal: Notify a Data Center Policy 2.0, review it every three to five years and establish a State-level committee to monitor progress annually.
Green incentives: Link tiered benefits and faster approvals to the CII–Indian Green Building Council (IGBC) Green Data Center Framework and verified operating performance.
Shared infrastructure: Pilot data centre parks at Bharat Future City and Aloor with reliable power, treated-water supply and multiple fibre routes.
Resource use: Replace the 2016 policy’s one-third limit on renewable-energy open access with a progressive clean-power requirement; set water-use benchmarks and favour treated wastewater over drinking water for cooling.
A Large Pipeline Raises the Stakes for Infrastructure Planning
Telangana’s data centre push builds on Hyderabad’s IT industry, cloud services and planned development at Bharat Future City and Aloor. But a signed project agreement does not establish when a facility will be built—or when the electricity, cooling water and fibre connections it needs must be ready.
CII therefore recommends tracking projects from land allocation and approvals through construction and commissioning. That sequence would allow grid upgrades and shared utilities to be planned around facilities likely to operate, rather than the full volume of announced capacity.
The Existing Policy Does Not Measure Green Performance
Telangana’s Data Centres Policy 2016 offers infrastructure and business support, including dual power connections and renewable-energy open access for up to one-third of a facility’s requirement. CII argues that the next policy should set clearer sustainability expectations and link benefits to results.
Its proposed incentives could vary with IGBC certification level and sustained reductions in power usage effectiveness(PUE), a measure of how much electricity a data centre uses beyond the power delivered to its computing equipment. Certification would assess design and construction; operational reporting would show whether efficiency is maintained after opening.
Power, Water and Heat Need Different Responses
Data centres require electricity around the clock. CII calls for renewable procurement backed by storage and grid infrastructure, noting that solar power alone does not cover night-time demand. The report also favours treated wastewater for non-domestic needs, water-use reporting and restrictions on groundwater use for cooling in stressed areas.
The report’s environmental concern extends beyond resource supply. Large facilities release heat into their surroundings, so it recommends considering local heat conditions when choosing sites and testing waste-heat reusenear suitable industries. These are proposals for Telangana’s next policy, not requirements already in force.
Policy Relevance
Investment and public infrastructure: Project-by-project commissioning information would help Telangana match power, water and connectivity spending to credible demand.
Incentive design: Linking concessions to measured energy and water performance would give the State a clearer basis for assessing what public support delivers.
Regional opportunity: CII also proposes incentives for smaller “edge” data centres in cities such as Warangal, Karimnagar and Nizamabad, alongside a green data centre centre of excellence for research and skills. This would broaden the policy beyond Hyderabad’s largest campuses.
Follow the Full Report Here: CII, Data Centers: The Future Economy of Telangana