Changing Cities: Indore Is Running Out of Water
But the city continues to build a thirstier future with an 80 MW AI data centre
The Indore protests on water are not simply about dry taps in the peak of summer. They are the consequence of years of groundwater depletion, unchecked urban expansion, and an ill-researched and executed development model that assumed water is infinite.
Residents across the city have staged demonstrations over erratic water supply as borewells and tubewells run dry. Videos from multiple neighbourhoods show people blocking roads and demanding drinking water from municipal authorities. The crisis has become severe enough for the Indore Municipal Corporation (IMC) to begin seizing illegal pumps, taking over private hydrants, and penalising buildings without functioning rainwater harvesting systems.
Indore is becoming a case study of how Indian cities quietly exhaust groundwater long before they publicly acknowledge a crisis.
A City Built on Invisible Water
Most urban residents do not think about groundwater because they do not see it. Water arrives through taps, overhead tanks, apartment pipelines, or tanker deliveries. The infrastructure creates an illusion of permanence. But beneath every growing Indian city is an invisible reserve being constantly extracted.
Indore’s growth over the last two decades has been explosive. The city expanded into new residential corridors, IT parks, educational hubs, warehouses, gated communities, and commercial districts. Real estate growth transformed the city’s geography.
Areas around Super Corridor became symbols of Indore’s aspirational future — smart infrastructure, investment zones, private universities, and technology campuses. But much of this growth depended on groundwater extraction. More importantly, all of these new areas simply concretised everything in sight. Central India (and the whole world) needs rainwater to recharge groundwater tables. But when everything is concretised, the groundwater is not recharged.
Borewells became the default solution whenever municipal supply fell short. Every new housing society drilled deeper, and commercial complexes and housing societies installed backup extraction systems.
For years, this appeared sustainable because groundwater decline happens slowly. Then suddenly, borewells started running dry as underground aquefiers fell empty. Over 50% of the government’s 6,500 borewells are now dry.
In hard-rock regions like much of Madhya Pradesh, groundwater recharge is already limited compared to alluvial river plains. Aquifers do not refill quickly. The result is what hydrologists call “groundwater mining” — taking water out faster than nature can replace it.
Indore is now confronting the consequences.
Why Rain Is Not Enough Anymore
Many Indian cities are facing shortages even after receiving significant rainfall. The reason is simple: modern urbanisation prevents recharge. Concrete is a water barrier.
Roads, parking lots, malls, gated housing, paved compounds, and flyovers reduce the amount of rainwater that can seep underground. Instead of replenishing aquifers, rainwater is rapidly channelled into drainage systems.
Traditional landscapes once slowed water movement naturally. Lakes absorbed overflow, open soil allowed infiltration, wetlands acted like storage systems, and seasonal streams spread water across floodplains.
Urban expansion erases these buffers. Indian cities often celebrate rainfall only as surface supply — reservoirs filling, dams rising, rivers swelling. But groundwater depends on something slower and less visible: percolation. Once depleted, recovery can take years.
The Data Centre Question
Now comes the most uncomfortable part of the story. Even as Indore struggles with worsening water scarcity, the city is positioning itself as a future digital infrastructure hub.
The company at the centre of Indore’s emerging data-centre push is RackBank Datacenters — an Indore-founded infrastructure firm that began as a regional colocation provider and is now repositioning itself as an AI infrastructure company. Its founder, Narendra Sen, has publicly framed Indore as an alternative to India’s traditional data-centre hubs like Mumbai, Chennai, and Noida.
In July 2025, The Economic Times reported that RackBank had secured land in Indore for a new AI-focused facility as part of its expansion strategy into tier-2 cities. The project involves an 18 MW campus on six acres in Indore, alongside a much larger project in Raipur. Sen told ET that moving into cities like Indore could reduce operating costs by “2–3x” compared to metro markets. (The Economic Times)
Land is cheaper, power costs are lower, regulatory clearances are easier, and the state governments is aggressively competing to attract digital infrastructure investment.
But the economic advantages of tier-2 cities also overlap with ecological vulnerabilities.
Unlike Mumbai or Chennai, Indore does not sit on a coastline. It is heavily dependent on groundwater and long-distance river supply systems from the Narmada. The city already faces recurring summer shortages, tanker dependence, and falling borewell reliability. Even official municipal planning documents now revolve around expanding Narmada dependence because local groundwater reserves are weakening.
This is the context in which RackBank’s expansion is taking place. According to infrastructure database Baxtel, RackBank’s upcoming “Central 2” facility in Indore is being designed as a multi-phase AI-optimised campus scheduled for 2026. The project is expected to support up to 60,000 GPUs and target extremely high-density AI workloads. (Baxtel)
Training and operating large AI systems requires dense compute clusters running continuously. That increases both electricity consumption and cooling demand. Cooling demand, in turn, determines water demand.
RackBank says the Indore campus will deploy its proprietary “Varuna” liquid immersion cooling and rear-door heat exchangers. The company claims these systems improve energy efficiency and reduce cooling overhead.
That is important because the company is clearly aware of the sustainability criticism already surrounding AI infrastructure globally.
But there is a major distinction between improved efficiency and low total consumption. Efficient systems can still consume enormous quantities of water and electricity when scaled up.
The city is already experiencing severe groundwater stress. Against this backdrop, even relatively conservative data-centre water estimates become significant.
Industry estimates vary widely depending on cooling architecture. A widely cited Deloitte estimate discussed in Indian infrastructure forums places daily water use at roughly 68,500 litres per MW for conventional evaporative cooling systems. Independent discussions around Indian data-centre expansion have increasingly focused on these numbers because of how rapidly AI infrastructure is scaling. (Reddit)
Applied conservatively, an 18 MW facility could therefore consume over 1.2 million litres of water per day under conventional cooling assumptions. That translates to roughly 450 million litres annually.
Madhya Pradesh is not planning a single isolated facility. The state government is actively positioning itself as an AI and data-centre destination. In 2025, the Madhya Pradesh State Electronics Development Corporation signed an MoU with Spain-based Submer Technologies to jointly develop up to 1 GW of AI-ready data-centre capacity in the state. The agreement specifically focused on cooling technologies and sustainable infrastructure. (The Times of India)
When Indore is facing intensifying water stress, the state is simultaneously competing for one of the most resource-intensive infrastructure categories of the AI era.
The proposed Indore–Pithampur Economic Corridor alone is projected to require 40 MLD of water. (The Times of India)
AI infrastructure is often presented as “clean growth.” There are no smokestacks or visible pollution plumes. But resource consumption remains hidden behind walls, cooling systems, substations, and server racks.
Indore and India will have to decide if the price is worth it.
Sources and Further Reading
Times of India — Water crisis protests in Indore:
https://timesofindia.indiatimes.com/city/indore/water-crisis-sparks-protests-in-several-wards-across-city/articleshow/131285057.cmsTimes of India — Groundwater depletion penalties:
https://timesofindia.indiatimes.com/city/indore/imc-to-enforce-penalties-amid-severe-groundwater-depletion/articleshow/131251445.cmsTimes of India — Water scarcity in premium townships:
https://timesofindia.indiatimes.com/city/indore/water-scarcity-hits-premium-townships-across-indore/articleshow/131251449.cmsTimes of India — IMC action against illegal extraction:
https://timesofindia.indiatimes.com/city/indore/imc-seizes-illegal-pumps-fines-errant-tanker-operators/articleshow/131285050.cmsCentral Ground Water Board / PIB:
https://www.pib.gov.in/PressReleasePage.aspx?PRID=2090573&lang=2®=3Groundwater assessment overview:
https://www.barc.gov.in/barc_nl/2025/2025030415.pdfMordor Intelligence — India data centre water consumption market:
https://www.mordorintelligence.com/industry-reports/study-of-data-center-water-consumption-in-indiaMongabay India — Data centres and water use:
https://india.mongabay.com/2026/05/india-bets-on-data-centres-even-as-water-energy-use-concerns-mount/ADRI India Water Facts:
https://www.adriindia.org/adri/india_water_facts