Key takeaways

1. India is set to play a central role in the global clean energy transition in the next decade. Now the world’s most populous nation, with over 1.4 billion people, and fourth largest by gross domestic product GDP, it is expected to be the largest driver of global energy demand through 2035. While it is the third largest emitter of GHG, India is already the fourth largest renewable market in the world.
2. 2025 already marked a turning point in India’s energy transition, even if coal remains the backbone of the country’s energy system. India reached its target of 50% of installed electricity capacity from non-fossil fuel sources, five years earlier than the set timeline of 2030. While coal still remains critical for energy generation, its role in India’s energy system is set to gradually decline with greater uptake of clean energy.
3. The combination of demand-side measures that make electricity demand more predictable with supply-side incentives focusing on scaling production are allowing private capital to enter earlier and at greater scale. Ambitious demand-side measures are strengthening the investment case for RE generation, electric mobility, and domestic manufacturing providing strong visibility of demand, while supply incentives are reducing costs and project risks. Rising electricity demand from electrification in India is likely to reinforce the long-term scale-up of renewable generation.
4. India’s momentum in capital mobilisation to support the transition is growing, focusing on clear business cases in renewable energies, grid upgrades, transport electrification and clean manufacturing. Over the last ten years, the ratio of investment flows for fossil fuel vs. non-fossil fuel capacity has progressed from 1:1 to 1:4. Alongside private capital raised domestically, Development Finance Institutions (DFIs), foreign investors, and domestic markets are playing an increasingly central role in scaling clean technologies in the country.

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