India’s AI Data Centres EC Rules do not require environmental clearance for artificial intelligence data centres by default, according to information shared in the Rajya Sabha. However, environmental approval becomes mandatory when such facilities are developed as part of large building or township projects covered under the Environmental Impact Assessment (EIA) Notification, 2006, as amended. The clarification was provided by Minister of State in the Ministry of Environment, Forest and Climate Change, Shri Kirti Vardhan Singh, in a written reply in the Rajya Sabha.
Under the existing framework, AI data centres proposed as part of a “Building and Construction Project” under Item 8(a) of the EIA Notification require prior environmental clearance if the built-up area exceeds 20,000 square metres. Similarly, AI data centres developed under a “Township and Area Development Project” covered by Item 8(b) require prior approval when the project area is at least 50 hectares or the built-up area is 1,50,000 square metres or more. In such cases, the environmental clearance is granted by the State Environment Impact Assessment Authority (SEIAA) of the respective State or Union Territory.
AI Data Centres EC Rules for Building and Township Projects
The government said that multiple environmental factors are examined during the appraisal process for granting clearance under the AI Data Centres EC Rules. Authorities assess the availability of freshwater, particularly in water-stressed regions, along with water balance reports, the generation of greywater and plans for recycling and reuse. Based on these assessments, environmental safeguards are prescribed as part of the approval process for eligible projects.
The use and discharge of water and greywater during both the construction and operational phases of AI data centres are regulated under the Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981. Compliance with standards related to water use and wastewater discharge is monitored by the concerned State Pollution Control Board (SPCB) or Pollution Control Committee (PCC), depending on the location of the project. The ministry said these agencies are responsible for ensuring that projects follow the requirements laid down under the two laws.
Groundwater extraction for infrastructure and commercial projects is governed separately under guidelines issued by the Ministry of Jal Shakti. These rules were notified through Notification S.O. 3289(E) dated September 24, 2020, and were later amended through another notification issued on March 29, 2023. The regulations apply to infrastructure and commercial developments, including projects involving AI data centres that rely on groundwater resources.
The Bureau of Energy Efficiency (BEE) has also issued the District Cooling Guidelines, 2023, which contain recommendations relevant to large cooling-intensive facilities such as data centres. The guidelines encourage the use of treated water as cooling tower make-up water wherever feasible in order to reduce dependence on freshwater resources and support sustainable water management. They also highlight the need for energy-efficient cooling technologies, optimisation of cooling system performance, the use of alternative water sources and the implementation of water conservation measures. According to the government, these recommendations can help improve energy efficiency, reduce water consumption and support the sustainable operation of cooling infrastructure.
The Ministry of Electronics and Information Technology has additionally informed that the “Resilience, Innovation & Efficiency” Working Group of the India AI Impact Summit has been established to examine issues related to energy efficiency, water management and environmental resilience in digital and AI infrastructure. The government statement reiterates that while standalone AI data centres do not automatically require environmental clearance, large projects falling under the EIA Notification, 2006, remain subject to the applicable approval and compliance framework under India’s environmental laws and regulations.
