A recent global analysis indicates a significant threat to India's burgeoning data center industry: extreme heat. The report, titled “2026 Global Analysis of Planned Data Centres for Physical Climate Risk and Resilience” by risk consultancy XDI, examined 2,595 planned data centers worldwide, including 41 new facilities in India.
The findings are stark: 12% of the planned Indian data centers are classified as high-risk properties. These facilities are projected to experience a staggering 269% increase in average damage risk associated with extreme heat between 2026 and 2100. This vulnerability directly impacts the estimated $7 billion in foreign investment channeled into these projects.
Vulnerable States Identified
Among the Indian states, Tamil Nadu, Telangana, and Karnataka feature prominently in the top 30 states globally with the highest modeled operational disruption risk linked to extreme heat. Specifically, Tamil Nadu ranks sixth worldwide, with Telangana and Karnataka following closely at seventh and eighth, respectively.
The report underscores that these regions face not only direct physical damage to infrastructure from climate impacts but also significant operational disruption due to escalating temperatures and indirect risks to surrounding critical infrastructure. This could increasingly challenge the long-term performance, insurability, and operational continuity of these vital digital hubs.
Global Context of Climate Risk
India is not alone in facing this challenge. The XDI report highlights that planned data centers in Brazil, Mexico, Indonesia, and Spain also show some of the most acute projected operational disruption risks from extreme heat globally. In these regions, 75% or more of the analyzed assets are at high risk, with this threat expected to intensify rapidly over time.
The implications are far-reaching, affecting long-term investment viability and the reliability of digital services reliant on these data centers. As climate change progresses, adapting infrastructure and operations to mitigate these escalating heat-related risks will be crucial for maintaining India's position as a growing hub for digital infrastructure.