India's Ministry of Power told Parliament on 27 July that artificial intelligence data centres will add 26.3 GW of electricity load by 2031-32. That is almost double the 13.56 GW the government projected only in March. On 24 September, policy and energy specialists used the new number to argue that the facilities must become flexible customers rather than another block of inflexible demand.
The timing matters because the resource India normally uses to handle sharp evening ramps, its gas-fired fleet, spent the spring and summer short of fuel after the conflict in West Asia cut deliveries of LNG under long-term contracts.
The new load number
According to The Indian Express, the 26.3 GW estimate is built from projects that states have received, and the ministry is consulting state transmission utilities, distribution companies and developers on supply, transmission and grid balancing. Officials told the paper that data centre load "could be very spiky and have sharp ramps". The ministry said the new load is expected to be integrated into the grid and served mainly by renewable capacity.
The Hindu BusinessLine reported that about 17 GW of connectivity applications have already been filed with State Transmission Utilities. It added that the extra data centre load could push national peak demand beyond 388 GW by 2031-32.
The base is small but growing fast. India had about 375 MW of data centre capacity in 2020 and around 1.5 GW by 2025, The Indian Express reported. Wood Mackenzie expects operational capacity to reach 12 GW by 2030, a compound annual growth rate of roughly 40 per cent, with AI-dedicated capacity rising from 275 MW to 6,546 MW over the same period. The consultancy also forecast that data centre electricity use will grow 20-fold by 2040 from 10 TWh in 2025, reaching 7 per cent of national demand. Other estimates are lower: BusinessLine cited a projection of 6 to 6.5 GW of capacity by 2030 and an industry pipeline of 3,860 MW through the end of the decade requiring nearly $29.9 billion of capital.
The spread between those forecasts is itself a planning problem. Transmission utilities have to decide which connection requests to back with substations and lines before anyone knows how many will be built.
The gas gap
The Hormuz disruption hit the part of the Indian system that copes with ramps. Central Electricity Authority data reported by The Indian Express showed that none of the country's 16 GW of gas-grid connected capacity received imported LNG under long-term arrangements in April. Domestic gas was also short. Of 30.18 million standard cubic metres per day allotted to that fleet, actual April supply was just 4.33 MMSCMD, and private plants received only 1.07 MMSCMD, all of it at a single station.
Gas is a small share of Indian generation, but the paper noted that around 10 GW of gas-fired capacity is typically relied upon during the summer peak, when solar output falls in the evening. Generators turned to the spot market to fill the void. Power sector purchases on the Indian Gas Exchange between 1 April and 26 May reached 4,467,850 MMBtu, 336.5 per cent more than in the same period of 2025 and nearly 140 times the 2023 level. In May alone through the 26th, purchases rose 392.7 per cent year on year to 2,899,900 MMBtu.
A year earlier the picture was different. In April 2025, gas plants met nearly 38 per cent of their LNG requirement through long-term import contracts, alongside spot buying. This year that contracted supply disappeared, and the replacement fuel was bought at prices inflated by the same disruption.
Why the two stories meet
The ministry's description of data centre load, spiky and with sharp ramps, describes the very job the gas fleet does. If AI campuses arrive at the pace the July forecast implies, the evening peak gets larger at exactly the hour solar output drops. A gas fleet that can be starved of imported fuel by a shipping disruption is not a dependable answer to that problem on its own.
That is the case specialists made at the 24 September webinar reported by BusinessLine. "Data centres have significant potential to provide demand-response services to the electricity grid, particularly as the share of renewable energy increases and demand becomes more variable," said Vishal Tripathi, a consultant at the Council on Energy, Environment & Water. "Instead of building additional generation capacity simply to meet peak demand, demand response can become an important part of the solution." Tripathi said states need regulatory frameworks for demand response and that distribution companies need green tariffs aligned with corporate renewable procurement and Scope 2 accounting.
The Indian Express also reported policy discussions about locating data centres away from urban centres to avoid transmission congestion, and some support for siting them near renewable sources. Most current capacity sits near IT hubs.
Mumbai shows the transmission side
Maharashtra offers a concrete example of how states are handling the wires. In an order reported by The Times of India on 1 June, the Maharashtra Electricity Regulatory Commission directed that a proposed 400/220 kV gas-insulated substation at Ambernath be taken up on priority to support the Mumbai, Navi Mumbai and Thane data centre corridor. The commission noted that the entire capital cost will be borne by Lodha Developers and will not be claimed in MSETCL's Aggregate Revenue Requirement, so the spending does not reach consumer tariffs.
That developer-pays structure mirrors the debates in the United States, where regulators in Texas, Ohio and the PJM region have spent 2026 deciding how much of the grid cost of large loads should fall on the companies that cause it.
What to watch
Three questions will shape how the two pressures interact. The first is whether the 26.3 GW forecast holds once states screen the 17 GW of connection applications for projects that are real. The second is whether long-term LNG deliveries to the power sector return before the 2027 summer peak, or whether generators again lean on spot cargoes. The third is whether any state regulator adopts the demand-response rules and green tariffs that specialists are calling for, which would let data centres reduce load during the evening ramp instead of adding to it.
For now the arithmetic is simple. The government expects a new block of demand nearly twice as large as it assumed in March, and the plants it would normally call on to balance that demand spent the spring running with almost no contracted fuel.