AI Data Centres May Add 26.3 GW to India’s Power Demand by FY32

It is evident that the demand for electricity from data centers related to artificial intelligence in India will see an increase in the coming six years with the government predicting an increase of 26.3 GW by 2031-32. The revised estimate was shared by the Ministry of Power in a written reply to Parliament, reflecting the rapid expansion of AI-led digital infrastructure.

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Minister of State for Power Shripad Naik informed Parliament that the additional demand is expected to be integrated into the national power grid and will be met primarily through renewable energy capacity. The latest estimate is almost twice the ministry’s projection released in March 2026, when electricity demand from data centres was estimated at 13.56 GW by FY32.

The government said it is strengthening transmission infrastructure in phases while expanding power generation capacity to support the expected increase in electricity consumption from AI data centres and other emerging industries.

Investments Accelerate AI Infrastructure Expansion

The higher demand estimate comes as both domestic and global companies step up investments in AI-enabled data centre infrastructure in India.

Recent announcements include HCLTech’s memorandum of understanding with Sarvam AI to develop a $1.5 billion AI data centre in Odisha. Global technology companies have also expanded their India plans, with Google developing a $15 billion AI data centre hub in Visakhapatnam, while Microsoft has committed $3 billion to strengthen its cloud and AI infrastructure in the country.

According to a recent Wood Mackenzie report, India’s data centre capacity is projected to increase to 12 GW by 2030, compared with 2.2 GW in 2025. The report further indicates that AI capacity will increase to 6,546 MW by 2030 from 275 MW in 2025 as a result of increased demand in the digital economy of the nation. It further projects India’s AI market to reach ₹11.7 trillion by 2032.

Peak Electricity Demand Expected to Climb

The Ministry of Power also cited the Central Electricity Authority’s (CEA) midterm review of the 20th Electric Power Survey, which projects India’s peak electricity demand to rise steadily over the coming years.

Peak demand is expected to increase from 289 GW in FY27 to 388 GW by FY32. The projections indicate year-on-year growth of 17.96% in FY27, followed by annual increases ranging between 5.5% and 6.6% through FY32.

The new projections emphasize the magnitude of the infrastructure that will be necessary for supporting the growing AI system in India. Apart from creating power, the Indian Government has also recognized the importance of increasing transmission capacity that will help the network to cater to the rising needs of electricity and renewable energy sources.