As India expands water-intensive industries like food processing, pharmaceuticals, nuclear energy and data centres, entrepreneur Nikhil Kamath has flagged growing concerns over mounting pressure on the country's most vital yet undervalued resource — water.
In a post on X, the Zerodha co-founder argued that India's "four biggest growth bets" are highly water-intensive industries that are increasingly being built in states already facing water stress. He claimed that the country's failure to adequately price and meter water has created a growing imbalance between demand and supply.
Supported by a chart, his post is making the case for treating water as an economic asset that requires effective pricing mechanisms, similar to other key resources like oil, electricity and carbon credits. It highlighted that despite growing scarcity, water has largely remained free or heavily subsidised across much of the world, leading to concerns over inefficient usage and long-term sustainability.
It notes that while crude oil futures began trading in 1983 and carbon credit markets emerged in 2005, the world's first major water futures contract was introduced only in 2020 by the CME Group, reflecting how late water has entered mainstream market discussions.
Kamath's graphic also points to countries that have adopted aggressive water-management strategies. Israel, for instance, charges consumers close to the full cost of water supply and has achieved one of the world's highest water-recycling rates, with around 90% of wastewater being reused.
Singapore, despite lacking natural freshwater resources, has built a self-reliant system through extensive recycling and desalination.
According to the chart, recycled water accounts for about 40% of the country's needs, while desalination contributes another 25%.
Chile's experience offers a different model. The South American nation privatised water rights in 1981, allowing select private entities to own and trade them. While the move improved allocation efficiency in some sectors, it also generated criticism over hoarding and unequal access.
The chart argues that water markets have struggled to develop across Asia because water remains a politically sensitive issue and because supply challenges are highly localised.
Unlike oil, which can be traded globally, water availability varies significantly from one region to another, making the creation of a unified market difficult.
However, signs of change are emerging. Kamath's infographic points to pilot programmes in China involving water-rights trading across river basins, while the World Bank has supported water-accounting frameworks in states such as Andhra Pradesh and Telangana.
Against this backdrop, Kamath believes India is approaching an inflection point. With water-intensive industries expanding rapidly and urban centres already grappling with periodic shortages, he argues that metering, pricing and efficient allocation of water will become increasingly important. "The resource isn't priced. The metering is just starting," he wrote.
In Kamath's view, the gap between soaring demand and limited supply is no longer just an environmental concern-it is an economic challenge that could shape India's next generation of businesses.
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