Next big business? Why Nikhil Kamath sees opportunity in India’s growing water scarcity 

As India races to build the industries expected to power its next phase of economic growth, a less visible constraint is emerging beneath the surface: water. 

In a recent post on X (formally twitter), Zerodha co-founder and investor Nikhil Kamath pointed to a striking reality. India's four major growth engines — food production, nuclear energy, pharmaceuticals and data centres—are all heavily dependent on water, even as many of the states hosting these industries are already facing mounting water stress. 

“Food, nuclear, pharma, data centres. India’s four biggest growth bets are all water-intensive, being built in states that are already running out of it. The resource isn’t priced. The metering is just starting. Somewhere in that gap is a company worth building,” Kamath wrote. 

The world’s most important resource remains underpriced 

The argument begins with a simple observation: water is arguably the only resource required by every household, business, city and farm every day. Yet unlike commodities such as grain, oil or carbon credits, water remains largely outside formal market structures in most parts of the world. 

The infographic shared alongside Kamath’s post notes that while grain futures emerged in the 19th century and oil futures became a major global market in the 1980s, water pricing mechanisms remain limited. The first major water futures contract was launched in the United States only in 2020, and large parts of Asia still lack formal water markets. 

The result, proponents argue, is that water scarcity often fails to send economic signals that could encourage conservation, investment and efficient allocation. 

Lessons from around the world 

Countries that have experimented with water pricing have seen sharply different outcomes. 

Israel, which charges users close to the actual cost of water, has become a global leader in water reuse, reportedly recycling around 90% of its wastewater. Singapore, despite having limited natural freshwater resources, has built a diversified supply model combining recycled water and desalination. 

Chile offers a cautionary tale. Its highly privatized water-rights system faced criticism for enabling concentration of water access and rising public concerns, leading to reforms that strengthened the treatment of water as a public good. 

The broader lesson is that pricing water alone is not enough; governance and regulation matter just as much. 

Asia’s water challenge 

Asia is home to roughly 60% of the global population but holds only about 28% of the world’s freshwater resources. Despite this imbalance, water markets remain rare across the region. 

Experts point to several obstacles. Water is widely viewed as a public good, making pricing politically sensitive. Water availability is also highly localised, meaning a pricing system that works in one river basin may not apply elsewhere. In addition, many countries lack the metering, monitoring and exchange infrastructure needed to support large-scale water trading. 

Still, change may be underway. China has piloted water-rights trading programmes in several river basins, while governments across Asia are studying models such as Australia’s water markets. 

India’s growth ambitions meet water stress 

The challenge becomes particularly significant when viewed through the lens of India’s economic ambitions. 

Agriculture consumes the vast majority of India’s groundwater. States such as Punjab and Haryana continue to extract groundwater faster than it can be replenished. 

Meanwhile, India plans a major expansion of nuclear power capacity, an industry that requires substantial volumes of water for cooling.

The pharmaceutical sector, another strategic growth area, is also water intensive. Data centres — fuelled by AI adoption and digital infrastructure investments — are emerging as an additional source of demand, with many facilities being built in already water-stressed urban regions such as Chennai, Bengaluru, Hyderabad and Mumbai. 

As demand rises and supply becomes increasingly constrained, investors and entrepreneurs are beginning to see water not just as an environmental issue, but as an economic one. 

Business opportunity in scarcity 

Kamath’s post hints at what could become a major investment theme over the next decade: technologies and businesses that help measure, monitor, recycle, trade and manage water more efficiently. 

From smart metering and leak detection systems to industrial recycling technologies and water-accounting platforms, the opportunity may lie in creating the infrastructure needed to value water properly before scarcity turns into crisis.