INDIA’S ENERGY TRANSITION
India’s energy sector is undergoing a structural transformation, marked by rapid growth in renewable capacity, emerging clean technologies, and evolving policy frameworks. As of early 2025, non-fossil sources account for nearly half of the nation’s installed power capacity, signalling a decisive shift toward a low-carbon economy.
India’s Energy Transition – Path towards Sustainability
Driven by rapid economic growth, growing energy demands, and ambitious climate commitments India is at the forefront of energy transition, rapidly shifting its energy landscape towards a sustainable, low-carbon future. With a target of achieving 500 GW of non-fossil fuel power capacity by 2030 and reaching net-zero carbon emissions by 2070, India is making strategic investments in renewables, storage, and green hydrogen. However, coal remains a critical resource and therefore the country requires systemic policy support, grid upgrades, and social alignment to meet these goals in Sustainability.
- Renewable Energy
Bolstered by the surge in solar power, India’s non-fossil fuel power capacity reached 228 GW in 1Q 2025 including contributions from hydro, biomass, waste-to-energy, and nuclear power. This persistent focus is in line with the ambitious target of achieving 500 GW capacity by 2030.
- Electric Mobility
India’s commitment to energy transition extends to the transportation sector with a strong push for electric vehicles. The New Electric Vehicle Policy 2025, finalized in March 2025, aims to enhance domestic EV production, attract foreign investment, and lower import duties for a limited segment of EVs. The policy allows for lower import duties (15% instead of 70% or higher) on a limited number of fully built EVs for companies that commit to investing at least ₹4,150 crore (approx. USD 500 million) in local manufacturing facilities. These facilities should aim for 25% local parts production within 3 years and 50% within 5 years. The FAME (Faster Adoption and Manufacturing of Electric Vehicles) India scheme and PLI (Production Linked Incentive) scheme for automobile and auto components further support this transition.
- Green Hydrogen
Green hydrogen is emerging as a critical component of India’s long-term decarbonization strategy. The Government aims to make India the Global Hub for production, usage and export of Green Hydrogen and its derivatives. The National Green Hydrogen Mission, a flagship initiative, aims to establish 5 million metric tonnes (MMT) of annual green hydrogen production capacity by 2030. This is expected to attract investments of about USD 100 billion and generate over 600,000 new green jobs. The Ministry of New and Renewable Energy will also develop a suitable regulatory framework for certification of Green Hydrogen and its derivatives as having been produced from renewable energy sources.
While India’s energy transition is gaining momentum, challenges remain like the intermittency of renewable energy sources, the need for significant grid infrastructure upgrades, high initial investment costs, and the complex issue of land acquisition for large-scale projects. By leveraging its vast renewable energy potential, promoting domestic manufacturing, and embracing innovative technologies like energy storage and smart grids, India aims to not only transform its own energy landscape but also position itself as a global leader in the sustainable energy future. The coming years will be crucial in sustaining this momentum and addressing the hurdles of achieving a truly green and resilient energy system.
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