India’s push for more factories, semiconductor fabs and data centers could be constrained by the country’s limited freshwater resources. India has nearly 18 per cent of the world’s population but only about 4 per cent of global freshwater resources, making water availability a major issue for future industrial growth.

Industries such as thermal power, steel, chemicals, textiles, pharmaceuticals, electronics and semiconductor manufacturing require large volumes of water. Data centres also need significant water for cooling, while semiconductor fabs require ultra-pure water with no tolerance for supply interruptions.

The pressure is already visible. NITI Aayog has projected that India’s water demand could reach twice the available supply by 2030, potentially leading to a 6 per cent loss in GDP. The Central Ground Water Board’s 2025 assessment also found that 730 of 6,762 assessment units were over-exploited.

Experts say treated municipal wastewater could become one of India’s most scalable industrial water sources. Cities generate large amounts of sewage continuously, while industries need a reliable water supply, so the two can complement each other.

However, the gap remains large. CPCB data shows urban sewage generation of 72,368 million litres per day, while installed treatment capacity is only 31,841 MLD and actual treatment is around 20,235 MLD. This leaves a major untapped resource that could be used for industrial cooling and manufacturing.

The main barriers are economics and infrastructure. Freshwater, especially groundwater, is often underpriced, making recycled water appear expensive, while sewage-treatment plants are often located far from industrial estates. Experts recommend long-term reuse contracts, realistic freshwater pricing, better metering and water-balance planning for new industrial zones.