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Artificial Intelligence (AI) is poised to transform India’s economy and governance landscape. A Google report estimates that AI adoption could add ?33.8 lakh crore to India’s economy by 2030, contributing 20% to GDP and supporting the USD 1 trillion digital economy target by 2028. However, this growth is accompanied by significant environmental costs, particularly from the energy-intensive AI infrastructure and data centres.

Environmental Costs of AI Expansion

Data centres—the backbone of AI—consume massive electricity, primarily from fossil fuels. In 2024, global data centres consumed 415 TWh, projected to reach 945 TWh by 2030, surpassing Japan’s electricity usage. A single AI query uses 10x the energy of a Google search. According to the IMF, AI expansion could raise electricity prices by up to 9% in the U.S.

In addition, training large AI models can consume up to 700,000 litres of water (equivalent to producing 320 Tesla cars). AI infrastructure may soon consume six times Denmark’s water needs. The mining of rare earths for AI hardware also contributes to deforestation and soil degradation, while increasing e-waste with hazardous components like lead and mercury.

Economic and Social Gains from AI

Despite these costs, AI offers transformative benefits. In agriculture, tools like Microsoft’s Project FarmVibes boost productivity by 40%, reduce water use by 50%, and lower fertilizer costs by 25%. In manufacturing, firms like Tata Steel employ AI for predictive maintenance and quality control under the ‘Make in India’ drive. Financial inclusion is advancing through AI platforms like OnFinanceAI, aiding the unbanked using mobile data. Public services are being enhanced via initiatives like Bhashini and AI-driven Digital Public Infrastructure.

AI also supports environmental monitoring. Tools like IBM’s Green Horizon track pollution, while Google’s GenCast improves extreme weather forecasting. AI-driven satellite imagery aids forest and ocean conservation, with initiatives like Fishial.AI monitoring marine biodiversity.

India’s Policy Response and Renewable Integration

Recognizing the challenges, India’s IndiaAI Mission and NITI Aayog’s AI strategy emphasize sustainable AI development. At the AI Action Summit in Paris, India reiterated the importance of aligning AI growth with renewable energy use. The country is exploring small modular reactors (SMRs) and promoting solar and wind to reduce the carbon footprint of data centres.

Currently, only 44.72% of India’s installed capacity is from non-fossil sources. Intermittent renewable supply, weak grid infrastructure, high upfront costs, and lack of integrated policies remain challenges.

Way Forward: Sustainable AI Growth

• Expand Renewable Energy: Scale solar and wind under National Solar Mission and Green Energy Corridors.
• Green Backup Power: Replace diesel generators in data centres with hydrogen fuel cells and batteries under the Green Hydrogen Mission.
• AI for Energy Optimization: Develop AI-powered smart grids and promote energy-efficient chips and cooling systems.
• Policy and Incentives: Establish unified AI–clean energy policy frameworks and incentivize 100% green data centres.
• Support Innovation: Fund pilot projects and promote green tech in over 1,000 AI and clean energy startups.

Conclusion

India’s journey to becoming a global AI powerhouse must be anchored in sustainability. Balancing technological ambitions with the 2070 net-zero goal is not just an environmental necessity but also a strategic imperative for resilient, inclusive growth.