India is poised to become a key Artificial Intelligence market in the world and Calcutta, according to a new report, could play a pivotal role in that transformation. Calcutta, Knight Frank India's India Data Centre Market Update 2025 report shows, is emerging as eastern India's data centre hub. The city's live data centre capacity has increased nearly six-fold over the past decade. That is not all. A data centre with a capacity of 13 megawatts is currently under construction; an additional 133.4 MW is either committed or in the early stages of development. Investments are flowing in, driven by demand. This, of course, is good news on the economic front. According to a recent PricewaterhouseCoopers estimate, India’s installed data-centre capacity could expand to 8.5 times its current level by 2035, creating a broader ecosystem opportunity worth $280 billion. Related sectors, ranging from construction and power systems to cooling technologies and networking equipment, also stand to benefit enormously. Calcutta’s strategic location, connectivity and relatively lower costs are an advantage when it comes to attracting businesses invested in digital infrastructure. The benefit, if it materialises, will be mutual. Calcutta’s rise as a prominent data centre could provide momentum to Bengal’s push to rediscover its industrial edge.
Yet, the government, investors and the public will do well to be mindful of a caveat. Data centres are not merely engines of economic growth; they are also voracious consumers of natural resources. They require continuous cooling and use large quantities of water: studies and industry reports have warned that rising temperatures will further increase cooling needs, driving up both electricity and water use. In regions already grappling with heat stress and water scarcity, managing the environmental footprint of these facilities would be a challenge. A study by Cambridge-led researchers found that land surface temperatures around AI data centres rise by an average of 2 degrees celsius, with some areas recording an even higher spike. These concerns have special significance for Calcutta. The city is among India’s most climate-vulnerable urban centres and faces such threats as rising temperatures, extreme rainfall, flooding, cyclones and sea-level rise. The biggest challenge for Calcutta would be to mine the economic advantage of data centres without raising the costs on the environment.