Minister Hardeep Singh Puri Highlights Energy Demand Surge from Data Centre Incentives

India’s Minister for Petroleum and Natural Gas, Hardeep Singh Puri in an interview with CNBC TV18, has stated that the Union Budget’s incentives for data centre development will significantly increase national energy demand. He noted that the sector’s rapid growth is already generating renewed interest in India’s closed gas-based power plants.

The Minister explained that major global firms now operate extensive digital infrastructure in India, driving unprecedented consumption needs. He highlighted that the government’s long-term measures are aligned with the country’s expanding role as a global technology hub.

Data Centres Expected to Drive Electricity Demand

The Minister said that data centres are emerging as one of India’s most energy‑intensive industries. He explained that the rapid expansion of Global Capability Centres has created substantial demand for uninterrupted and scalable power.

According to him, the sector’s growth represents a structural shift requiring new electricity planning and supply strategies. He added that the importance of data as a national asset further underscores the need for reliable energy security.

Long-Term Tax Incentives for Data Infrastructure

Puri highlighted the government’s introduction of a 20‑year tax holiday for data centres, describing it as an unprecedented step. He said that the measure is intended to position India as a global destination for high‑capacity digital infrastructure.

The Minister stated that long‑duration incentives help investors plan capital‑intensive projects with greater confidence. He also emphasised that the Budget’s provisions are aligned with the country’s ambition to build robust cloud and digital ecosystems.

Expanding Natural Gas Supply to Support Energy Needs

The Minister said natural gas availability will increase substantially beginning this year, with a peak expected in FY 2027–28. He cited expanded supplies from Qatar and the commissioning of a $10 billion project in Mozambique as key contributors.

He also referenced a long‑term agreement between HPCL and the UAE to secure 4.5 MMTPA of LNG for the Indian market. According to him, the growing supply pipeline will help address rising energy requirements across industrial sectors, including data centres.

Impact On Gas Prices and Market Reforms

Puri projected that increased natural gas inflows will lead to lower prices nationwide. He said historical pricing gaps existed due to fields allocated on a nomination basis, requiring producers to sell under the Administrative Price Mechanism.

He noted that the government has now introduced a floor‑and‑ceiling pricing structure to resolve these discrepancies. The Minister expects the new framework to stabilise gas prices fully within the next 2 years.

Read More: Finance Minister Nirmala Sitharaman Clarifies Tax Holiday Eligibility for Data Centres and GCCs.

Conclusion

The Minister’s remarks indicate that the Union Budget’s data centre incentives are expected to reshape India’s energy landscape. Growing digital infrastructure will require significant increases in electricity and gas availability.

Long‑term supply agreements and pricing reforms have been positioned to support this transition. India’s push to become a global data hub will therefore rely heavily on sustained energy security and investment readiness.

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