Water may unlock India's ₹20L cr opportunity

Published 30 June 2026 · india

For a pail of water, Jack fell down and broke his crown. In India though, there’s no need to break a crown or see Jill

For a pail of water, Jack fell down and broke his crown. In India though, there’s no need to break a crown or see Jill come tumbling after. In fact, a report projects the lack of water in India and the surging demand to unleash a big investment opportunity. India's worsening water scarcity is opening up a significant long-term investment opportunity across the water and wastewater infrastructure ecosystem, according to PL Capital's latest thematic report, Water Megatrend 2.0: Positioning for the Next Wave of Water-Led Investments. The report warns that India's water demand could be twice the available supply by 2030, creating an enormous infrastructure challenge. Bridging that gap may require investments of more than ₹20 lakh crore over the next decade.Also Read: The unquenchable AI thirst propelling water stocks up to 45%India's water crisis could unlock a ₹20 lakh crore investment opportunity"Water is becoming increasingly important as one of the top strategic resources in India. In contrast to other infrastructure-related trends, which may be associated with economic cycles, the investments in water security are structural, policy-driven, and mandatory for sustainable development," Vikram Kasat, Chief Business Officer-Advisory at PL Capital, said.Kasat said water is emerging as one of India's most critical strategic resources, with rapid urbanisation, industrial expansion and tighter environmental standards set to drive sustained demand for water infrastructure. He said the country is entering a prolonged investment cycle covering water purification, wastewater treatment, recycling, reclamation, desalination and water reuse facilities. In his view, the sector is moving into a phase of faster capital spending, creating a long runway for companies operating across the water value chain.The backdrop is becoming increasingly difficult to ignore. India accounts for nearly 18% of the world's population but has access to only around 4% of global freshwater resources, leaving the country with a structural water deficit that demands sustained investment across the entire water ecosystem.

Unlike many infrastructure themes that rise and fall with economic activity, water security has become a long-term national priority. 132088802Four structural forces are expected to keep demand rising. Urbanisation is increasing per-capita water consumption as more people move into cities. Groundwater depletion is forcing greater reliance on recycling, reuse and desalination. Rapid industrialisation, particularly in sectors such as semiconductors, electronics, chemicals and data centres, is creating fresh demand for industrial water infrastructure. At the same time, agriculture continues to consume the largest share of India's water resources, while the government's ethanol blending programme is adding further demand through water-intensive crops such as sugarcane, maize and rice.The government's spending plans reflect the scale of the challenge. The Jal Jeevan Mission continues to receive annual allocations of around ₹67,000 crore to expand rural tap-water connections. The Ministry of Jal Shakti has been allocated about ₹99,500 crore in FY26 for drinking water, groundwater management, river rejuvenation and water infrastructure, the report noted. AMRUT 2.0 carries an outlay of roughly ₹2.99 lakh crore for urban water supply, sewerage and wastewater treatment, while Namami Gange Phase II has an allocation of around ₹22,500 crore to strengthen sewage treatment and river-cleaning infrastructure across the Ganga basin.AI data centres, urbanisation and industry fuel India's water demandWater is also becoming increasingly important for the AI economy. Data centres that power artificial intelligence applications consume vast quantities of water for cooling and temperature control, creating fresh demand for treatment, recycling and efficient distribution systems. Moody's has already warned that the rapid expansion of data centres could intensify water stress, while India's fragmented water management framework could create fiscal and credit risks.Yet what looks like a crisis for policymakers is increasingly being viewed as an opportunity by investors. Water-focused stocks including Shakti Pumps, VA Tech Wabag, Jash Engineering, Enviro Infra and Ion Exchange have climbed by as much as 45% over the past month, bringing fresh attention to a sector that has largely stayed out of the spotlight.India generates more than 72,000 million litres of sewage every day, but has installed treatment capacity of only about 27,000 MLD.