India’s Data Centres Need A Resilience Upgrade To Face Climate Change

Looking at operational and planned data centres globally, based on their exposure to hazards like flooding, storms, forest fires, and soil movement, India’s projected risk rise is sharp for facilities exposed to surface water and riverine flooding, which are becoming more frequent and intense due to monsoon variability and urban sprawl.

Uttar Pradesh ranks second worldwide in the proportion of high-risk facilities, with nearly 62 per cent of its data centres projected to face frequent, severe weather disruptions by 2050. 

This comes even as the state positions itself as a major digital infrastructure hub with its Data Centre Policy 2021 (amended in 2022), which offers incentives like interest subsidies, land and electricity support, and relaxed building norms to attract domestic and global investors.

With ambitious targets of attracting Rs 30,000 crores in investment and establishing state-of-the-art data centre parks in hubs like Noida, UP is aggressively pushing to lead India’s digital economy, but its exposure to climate hazards may undercut this momentum.

Tamil Nadu follows closely, with more than two-thirds of its facilities considered moderately at risk.

“Climate risks are not a distant future concern — they are already affecting data centre viability today,” the report warns.

With India’s data infrastructure expanding rapidly, driven by cloud computing, AI, and data localisation mandates, the research warns that this growth is happening without sufficient protection against climate extremes like flooding, storms and heatwaves.

The Hidden Cost Of Uptime

Introducing some jargon, a data centre is classified as high-risk when the maximum-to-date value at risk (MVAR) exceeds 1 per cent of the building’s replacement cost. This makes insurance prohibitively expensive or unavailable. 

Moderate-risk centres, with MVAR between 0.2 and 1.0 per cent, may still find cover, but at rising premiums. For operators, this translates into higher costs and operational strain. 

“Cooling is already our biggest pain point. Every summer, we push our systems harder and our bills spike during power cuts,” a senior executive at a data centre firm with facilities across India told The Secretariat on condition of anonymity.

“We’re investing in retrofits like elevating equipment floors and waterproofing cable shafts, but it’s reactive, not strategic. There’s no regulatory push for resilience,” they said.

Extreme heat, though not factored into the structural risk rankings, remains a growing concern. The report notes that while heat may not directly damage infrastructure, it can lead to productivity loss due to power outages, posing a serious challenge to uninterrupted digital services.

Insurers Taking Note

With climate-related catastrophes leading to US$ 135 billion in global insurance losses in 2024 alone, insurers are reevaluating their models. While climate insurance is a nascent, growing area in India, insurance isn’t. 

Data centres that were once considered low-risk assets could see stricter terms and soaring premiums. “If this trend continues, financing new centres in coastal or low-lying areas may simply dry up,” the executive told The Secretariat. 

Experts say that effective upgrades to data centre fleets can be identified using climate risk analysis tools to assess vulnerabilities. These range from fire-retardant coatings, external sprinklers, flood barriers, and reinforced roofing to road access and big picture plans for relocation in case technology doesn't have solutions for adapting to the elements. 

XDI calculates that climate adaptation measures like improved drainage, flood-resistant materials, and strategic relocation can reduce the number of high-risk data centres globally by over 70 per cent. Spending just 3 per cent of total asset value on resilience would yield a positive return on investment.

The Missing Policy Link 

Despite India’s ambitions to become a global data hub with state policies offering land, power subsidies, and single-window clearances, climate resilience is not part of the policy playbook.

“India is betting big on data infrastructure, but climate adaptation is still treated like a technical afterthought,” a climate activist told The Secretariat. “Where is the environmental screening? Where is the water impact assessment? We can’t call this ‘infrastructure of the future’ if it’s going to collapse,” they said. 

As cloud adoption, AI, and financial services deepen their dependence on always-on digital infrastructure, the stakes are growing.

The report cautions against over-reliance on technical fixes. “Even if a facility is designed to withstand flooding or storms, it can’t operate if the grid fails, fuel supplies are cut off, or staff cannot safely access the site,” it notes. 

In short, resilience must extend beyond the data centre to the broader systems that sustain it.