The southern Indian state of Telangana is working to establish its first dedicated data center city, on 1,500-acres at Aloor village in Chevella mandal. The data center city will be located around 55km from Hyderabad which is a leading destination for co-location and hyperscale facilities.
In June Telangana Chief Minister A Revanth Reddy instructed state officials to prepare a detailed report on the water, electricity and connectivity requirements for the proposed 1,500-acre city. The location of this project has already been selected according to The Times of India.
This is just one of several projects Telangana has in the pipeline, with an expected 11 GW of data center capacity planned in the state based on signed Memorandums of Understanding. Among those is an MoU with UPC-Volt to build a 100 MW AI data center at Bharat Future City in Hyderabad and an MoU with NTT Data and Neysa Networks to establish an AI data center cluster in the city.
Cognisant of the pressure these data centers will have on utilities, the state government is starting work on a project where industrial hubs will be supplied with treated waste water. The project will be implemented through a public-private partnership and will include two pipelines to deliver treated water to data centers in Chandanvelly and Bharat Future City.
By creating an enabling environment, the Telangana government is encouraging long-term growth in this market. As reported by Mordor Intelligence, the Hyderabad data center market size is expected to grow from 859 MW of installed IT load in 2025 to an estimated 4,640.8 MW by 2032. By investing in other parts of the state, Reddy and the government can attract more players to the market and achieve the goal of establishing Telangana as a digital infrastructure hub.
This week Reddy met with Bharti Enterprises Chairman Sunil Bharti Mittal to discuss expediting the Chandanvelly Data Centre Project and to consider establishing a data center and AI infrastructure campus in the state. Further to this, Reddy also said that Airtel should expand its digital, cloud, cybersecurity, and artificial intelligence operations in Hyderabad.
Mittal applauded the Telangana government’s efforts to encourage forward-looking initiatives through its policy decisions and noted that Bharti Enterprises is committed to expanding its data center capacity and fiber connectivity in the state, a signal to others that the state is worth investing in.
The prospect of a data center city may be the key to attracting more data center operators and infrastructure providers to other areas in Telangana. The road to that city is long and depends on support from the government, especially as regards water, power and land provisions, but if successful, the state could become a vital part of India’s digital infrastructure economy.