Sustainability in the Cloud: Indian Startups Redefining Green Data Centres

India’s data centre market is preparing for its most transformative phase yet. Driven by explosive growth in cloud consumption and AI workloads, the country’s installed data centre capacity has reached approximately 1.3 GW, more than tripling since 2019. But with this scale comes a parallel responsibility: addressing the energy, carbon, and water footprint of digital infrastructure. Over the last six months, the industry conversation has matured—capacity expansion is no longer enough; sustainability is now a core engineering and procurement priority.

Environmentally intelligent data centre design is rapidly proving to be both operationally scalable and commercially profitable, and a new generation of Indian startups is playing a decisive role in this shift.

Key drivers behind the transition

Three major forces are reshaping the sustainability narrative:

1. Rising rack power densities
   With AI and hyperscale deployments demanding higher power densities, traditional thermal management approaches are hitting their limits, pushing operators toward next-generation cooling systems.
2. Demand for quantifiable sustainability outcomes
   Investors and enterprise clients now expect real-time, verifiable metrics—energy efficiency, water savings, renewable utilisation, and carbon reduction—before making procurement decisions.
3. Policy alignment and renewable expansion
   National policies, incentives, and the rise of renewable-backed hyperscale projects are enabling stronger local ecosystems in cooling, energy procurement, and sustainable facility design.

These shifts are now influencing engineering decisions across the full data centre lifecycle—from site selection to vendor evaluation.

Where startups are making the difference:

Indian startups are entering the sustainability space through four high-impact innovation pathways:

1. Advanced cooling technologies

Liquid and immersion cooling providers are delivering higher thermal efficiency and up to 40–60% reduction in cooling energy. With dense GPU clusters pushing air cooling to its limits, direct-to-chip liquid cooling and single-phase immersion systems are increasingly being adopted for both new builds and retrofits.

Industry insights from mid-2025 reveal that Indian operators are steadily transitioning to liquid cooling to reduce PUE and conserve water, especially in AI-dedicated data halls.

2. Localised hardware manufacturing

Domestic production of cooling and power systems is reducing reliance on imports, cutting supply-chain emissions, and sharply lowering costs.

3. Energy-optimisation AI software

Startups are building intelligent orchestration platforms that:

• flatten peak electricity demand,
• shift non-urgent workloads to periods of high renewable generation,
• predict thermal hotspots,
• and provide transparent sustainability reporting.

This software layer is becoming essential for operators seeking auditable, real-time sustainability metrics.

4. Modular & Edge infrastructure

Smaller, decentralised data centres are reducing environmental impact by:

• avoiding water-intensive cooling plants,
• integrating on-site solar and batteries,
• and optimising power conversion systems.

This architecture helps reduce both operational emissions and grid transmission losses.

The Raipur advantage: Why it matters for India’s green DC future

Among emerging data centre destinations, Raipur is quickly gaining strategic relevance. Its advantages align strongly with the sustainability-first direction of the industry:

1. Special Economic Zone (SEZ) benefits

Raipur’s SEZ status supports data centre development through:

• faster clearances,
• simplified compliance frameworks,
• and access to incentives for export-orientated digital services.

This reduces administrative overhead and accelerates project timelines.

2. Significant cost reduction

Raipur offers up to 18% reduction in operational and infrastructure costs, driven by:

• lower land pricing
• reduced construction and labour expenses
• cheaper logistics and manufacturing inputs

For startups building hardware or modular systems, Raipur becomes a cost-efficient manufacturing hub.

3. Strength in local manufacturing & industrial clusters

Raipur has a strong industrial ecosystem, supporting:

• fabrication
• thermal engineering components
• metal enclosures
• precision manufacturing

This directly reduces costs and strengthens the domestic hardware value chain for cooling, power, and server systems.

4. Power and energy readiness

The region offers:

• Stable grid availability,
• Competitive electricity tariffs,
• Growing renewable energy integration,
• And upcoming solar corridor projects enabling long-term green PPAs.

This supports both hyperscale and edge operators looking for predictable, green-aligned power supply.

5. Government Incentives and Subsidies

State and central government initiatives are enabling sustainable data centre development through:

• capital subsidies for renewable energy integration,
• incentives for high-efficiency cooling and power systems,
• GST benefits within SEZs,
• and subsidies for local manufacturing under Make in India.

This policy environment significantly improves the lifecycle economics of sustainable data centres.

The Growing business case for sustainability

Renewable-backed hyperscale announcements are sending strong demand signals throughout the ecosystem. When major cloud providers commit to solar PPAs or captive green energy for new data halls, startups benefit through:

• long-term contracts
• predictable demand cycles
• and accelerated commercialisation of cooling, power, and software innovations

Lower PUE, reduced water usage, waste heat recovery, and local supply chains result in substantial long-term cost savings, reinforcing the economic viability of sustainable design.

Practical challenges and the need for engineering leadership

Despite momentum, operators face hurdles:

• grid variability necessitating hybrid strategies with batteries
• integration complexities for immersion and liquid cooling
• the need for tighter collaboration between mechanical, electrical, and IT engineering teams
• and the requirement for new procurement frameworks

Strong engineering leadership is essential. Organisations that embed sustainability into site selection, equipment procurement, design reviews, and vendor systems achieve long-term resilience and differentiation.

India’s data centre boom can expand responsibly—balancing performance, cost, and environmental goals. By innovating in cooling, power integration, and operational intelligence, startups are redefining what green cloud infrastructure looks like.

For B2B decision-makers, the question is no longer whether sustainable design is possible. The real question is how quickly engineering, procurement, and operations can adapt to capture the long-term efficiency and value that green innovation offers.