According to Amazon Web Services, responsible data centre development can help make utility bills more affordable, not less. Last week, Indiana Michigan Power proposed cutting residential base rates by 5% and then freezing residential rates for the next three years. The utility company attributes this cost reduction to revenue from large customers like data centres helping reduce costs for everyone else. This development challenges the narrative that data centres are primarily water-intensive and costly for utilities.
According to Business Standard, data centres are being unfairly singled out as the primary cause of India's water crisis despite their relatively modest water usage compared to other sectors. A 100MW data centre can draw roughly 2 million litres of water a day in conventional cooling conditions, but this represents a small fraction of India's total freshwater withdrawals. The criticism has intensified with President Donald Trump staking political capital on water issues in the United States, creating a public policy dispute around what was previously an engineering footnote.
As reported by Business Standard, agriculture accounts for around 90% of India's freshwater withdrawals by most standard estimates. The analysis highlights that India continues to encourage crops and trade patterns that export enormous quantities of virtual water—the hidden water embedded in rice, sugar, cotton, livestock products and other commodities. India's rice exports often exceed 20 million tonnes annually, which can translate into tens of billions of cubic metres of embedded water leaving the country annually, primarily drawn from stressed groundwater belts in Punjab, Haryana and parts of Telangana.
According to the report, various sectors within the water economy operate differently in terms of water usage. Rice, sugar, cotton, textiles, leather, mining, metals, steel, chemicals, pulp and paper all withdraw water for different purposes—irrigation, washing, cooling, dilution, slurry transport, boilers, bleaching or effluent treatment. The analysis notes that public outrage is far more likely to gather around a data-centre campus than around the slower, dispersed and politically familiar overuse of water elsewhere in established industrial sectors.
As outlined by Business Standard, the expert recommends a comprehensive water policy approach that includes transparent water accounting for all large users, stricter permitting rules for high-stress basins with mandatory recycled water for new industrial loads, and incorporating a virtual-water lens in trade and subsidy policy. The framework would require farm policy to move away from rewarding water intensity and encourage crop choices aligned with local water endowments, with millets, pulses and oilseeds replacing paddy and cane as real incentives.
