In a landmark policy move aimed at strengthening India’s fast-growing digital infrastructure, the Maharashtra government has approved a new framework allowing data centres in Mumbai, Navi Mumbai, Thane, and nearby areas to generate and distribute their own renewable energy.

The state energy department, in an order dated 6 October, announced that data centre parks and individual units notified by the industries department can now establish captive renewable power generation and distribution systems. The clearance is restricted to green energy sources such as solar, wind, and hydro power.

Industry experts have hailed the decision as a potential game changer for the data centre ecosystem, which is heavily dependent on 24×7 uninterrupted electricity. Data centres, which host critical cloud, AI, and digital operations, are among the most power-intensive facilities, requiring continuous energy for servers and cooling systems.

The government’s notification stated, “It has become necessary to facilitate data centre park developers and their associates to develop and maintain power distribution infrastructure and procure power, which is a specialised activity for the entire park.”

Although Maharashtra is not a power-surplus state, it houses nearly 60 per cent of India’s data centres, with most located in Navi Mumbai. The state had earlier classified data centres as an essential service to ensure uninterrupted operations.

On 13 May, the industries department had notified 25 areas in Kurla, Chandivali, Marol, Thane, Navi Mumbai, and Panvel as designated data centre parks and units, granting them deemed distribution licences to utilise renewable power. This paved the way for the energy department’s new order.

A senior energy official explained, “Any interruption in power can cause massive financial losses for data centres. With the exponential growth of cloud computing, fintech, streaming, and AI, their power demand has risen sharply. Allowing captive green energy generation ensures reliable and sustainable operations.”

The new order also allows operators to distribute electricity within their designated zones, with the provision to sell surplus power to customers in the same area. However, sale beyond the notified zone is not permitted.

Data centre companies can apply for parallel distribution licences from the Maharashtra Electricity Regulatory Commission (MERC), following due regulatory procedures. All energy produced must be from renewable sources.

Under its Information Technology and IT-enabled Services (ITES) Policy, Maharashtra aims to transform Mumbai and Navi Mumbai into regional data centre hubs. With a robust power grid, multiple undersea cable landings, and a skilled workforce, the state hopes to make these Zone I cities a leading Asia-Pacific digital hub.

Chief Minister Devendra Fadnavis recently stated that Maharashtra accounts for around 60 per cent of India’s data centre capacity, most of which is concentrated in Navi Mumbai.

Leading developers operating in the notified areas include Amazon Data Services India, NTT Global Data Centers, CtrlS, Equinix India, Nxtra Data, Sify Infinit Spaces, and Princeton Digital Group.

A June 2025 report by Cushman & Wakefield ranked Mumbai sixth among 97 global cities in terms of under-construction data centre capacity, surpassing established markets such as London and Dublin.

Globally, Virginia (1,834 MW) leads in capacity under construction, followed by Atlanta (1,078 MW), Columbus (546 MW), Dallas (500 MW), and Phoenix (478 MW). Mumbai contributes 42 per cent of India’s total under-construction capacity, reinforcing its position as a regional powerhouse in digital infrastructure.

The report further ranks Mumbai as the seventh most established data centre market in the Asia-Pacific region, with 335 MW of capacity under construction by end-2024 — a 62 per cent increase from its existing operational base.