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AI Surge Drives Data Center Expansion, Sustainability Struggles Loom in India

By Manbir Sandhu , 19 April 2025
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As artificial intelligence adoption accelerates globally, a new industry report reveals that 94.5% of data center professionals anticipate a substantial rise in storage demand, posing mounting challenges to sustainability and operational efficiency. In India—a rapidly growing digital economy—this tension is particularly pronounced. While data storage needs expand exponentially, power efficiency improvements are lagging. The "Decarbonising Data" report by Seagate Technology underscores the urgent need for balance between digital growth and environmental responsibility. Despite broad awareness, environmental considerations remain secondary in procurement decisions, highlighting a widening gap between sustainability intent and execution in India’s data infrastructure landscape.

India’s Expanding Data Burden Amid AI Proliferation

India's data center ecosystem is undergoing a seismic transformation. The explosive rise in artificial intelligence workloads is fueling an unprecedented demand for data storage. According to the report, 63.3% of Indian professionals now manage data volumes between 500 petabytes and 5 terabytes—a scale unimaginable just a decade ago.

This growth is largely attributed to the widespread integration of AI across sectors, from healthcare and finance to retail and logistics. Yet, with rising data comes surging energy requirements, compounding the complexity of infrastructure expansion and carbon accountability.

Environmental Awareness vs. Execution Gap

Despite growing concerns over the environmental implications of large-scale data storage, the Indian market exhibits a striking disconnect between awareness and action. A full 90% of respondents express concern about the ecological footprint of their operations, but only a small fraction prioritize sustainability in their procurement strategies.

More than half identify high energy consumption as the primary concern, yet procurement still heavily favors performance and cost over long-term environmental impact. This suggests that while the dialogue around green data centers is advancing, tangible adoption of sustainability-first infrastructure remains sluggish.

Infrastructure Limitations and Cost Barriers

India’s data center landscape faces several unique barriers that hinder sustainability. Chief among them are space constraints, unreliable electricity sources, and the high capital costs associated with building green data infrastructure.

These structural challenges leave many data center operators in a bind—forced to prioritize uptime and scalability over energy efficiency and carbon reduction. Consequently, environmental innovation becomes a secondary objective, often delayed until core infrastructure needs are addressed.

Lifecycle Management: A Missed Opportunity

Globally, 92.2% of professionals recognize that extending the lifespan of storage equipment is critical to reducing e-waste and improving sustainability. However, only 15.5%—and just 13.3% in India—cite lifecycle extension as a priority when procuring new hardware.

This is a missed opportunity. Extending the operational life of storage assets not only reduces costs but significantly cuts down on the environmental toll of frequent hardware refreshes. The low prioritization of this factor suggests that many organizations continue to take a short-term view, favoring new installations over strategic reuse or refurbishment.

Global Perspective: Unified Action Required

The Seagate report aggregates insights from over 330 data center professionals across 11 international markets, including India, China, North America, and the United Kingdom. While many regions share similar concerns, India’s rapid digital growth trajectory makes its situation particularly urgent.

Jason Feist, Seagate’s Senior Vice President of Cloud Marketing, emphasized the dual imperative of cost optimization and sustainability, urging industry stakeholders to abandon the notion of these goals being mutually exclusive. He advocates for shared accountability and technological innovation to create a more resilient and eco-conscious data center ecosystem.

Conclusion: The Road Ahead for Indian Data Centers

India’s digital economy is poised for exponential growth, and its data centers are the backbone of this transformation. Yet, as AI-driven storage demands rise, the sustainability gap threatens to undermine long-term progress.

Closing this gap will require coordinated action—from government incentives for green infrastructure to industry-wide shifts in lifecycle management and procurement priorities. Without a deliberate and unified approach, the tension between innovation and environmental responsibility will continue to grow.

India stands at a pivotal moment: it can either lead the charge in sustainable data innovation or risk falling behind in the global movement toward greener tech infrastructure.

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