There is no question that India is taking a lead in the global energy transition, with rapid economic expansion and decarbonisation driving growth. As the world's fastest-growing major economy and a country where electricity demand continues to rise sharply across the residential, commercial and industrial sectors, India's approach to energy reform carries global significance.
Unlike many advanced economies, where the transition is primarily about replacement, India is expanding reliable energy access to support industrialisation, urbanisation and rising living standards, while also reducing emissions intensity and strengthening energy security. This scale makes India central to the trajectory of global energy markets over the coming decades.
Over the past decade, India has moved from incremental renewable deployment to systemic transformation. Installed renewable energy capacity has nearly tripled, rising from 76.37 GW in March 2014 to 263.2 GW in Jan 2026.[1] In 2025, India achieved 50% of its cumulative installed electric power capacity from non-fossil fuel sources, five years ahead of its 2030 Nationally Determined Contribution (NDC) target.[2] This milestone marks not only an early fulfilment of a climate commitment but also a structural shift in the country's power mix.
India's clean energy transformation is no longer defined solely by capacity addition. It now encompasses industrial strategy, supply chain development, green finance, technology innovation, and global partnerships.
Table of contents:
- Policies driving scale
- Record-breaking deployment and manufacturing depth
- Green Hydrogen and emerging low-carbon pathways
- Strengthening the next phase of transition
- Conclusion: A scalable model for the world
Policies driving scale
India's energy transition is anchored in long-term policy clarity. The country has committed to achieving 500 GW of non-fossil fuel capacity by 2030 and reaching net-zero emissions by 2070.[3] By November 2025, total non-fossil installed capacity had already reached 262.74 GW, accounting for 51.55% of the country's total installed electricity capacity of 509.64 GW.[4]
A blend of central schemes, market reforms and institutional de-risking mechanisms is driving this transition. The 'PM Surya Ghar: Muft Bijli Yojana', with an outlay of ₹75,021 crore, aims to enable rooftop solar installations in one crore households by FY 2026–27.[5] Between January and December 2025 alone, 14.43 lakh rooftop solar systems were installed under the scheme.[6]
The rapid uptake signals the increasing role of decentralised generation in India's energy architecture.
Similarly, PM-KUSUM is accelerating the solarisation of agriculture. Cumulatively, over 10,203 MW of solar capacity has been installed under the scheme, with 64% of that capacity added in 2025 alone.[7] By enabling farmers to adopt solar pumps and distributed generation, the programme integrates energy security with higher rural incomes.
An enabling investment regime further supports India's clean energy deployment. The country permits 100% foreign direct investment in renewable energy under the automatic route.[8] FDI in the non-conventional energy sector reached $23,879 million from April 2000 to September 2025.[9] In 2024, 83% of India's total power sector investment flowed into clean energy, underscoring the structural shift in capital allocation.[10]
India has also emerged as the world's largest recipient of development finance institution funding for clean energy generation in 2024, receiving approximately $2.4 billion.[11]
Aligning policy ambition with financial mobilisation has strengthened investor confidence and reduced execution risk across the renewable energy ecosystem.
Record-breaking deployment and manufacturing depth
India's clean energy expansion in 2025 marked a historic inflexion point. Between January and November 2025, the country added 44.51 GW of renewable capacity, nearly double the additions recorded during the same period in 2024. Total renewable installed capacity reached 253.96 GW by November 2025.[12]
Solar energy remains the principal growth engine. Installed solar capacity rose to 132.85 GW by November 2025, with 34.98 GW added in the same year.[13]
India has now emerged as the world's third-largest generator of solar power.[14] Meanwhile, wind capacity has also expanded to 53.99 GW, reinforcing portfolio diversification.[15]
Notably, in July 2025, renewables met 51.5% of India's total electricity demand, the highest-ever daily renewable share recorded.[16] This demonstrates growing grid integration capability alongside capacity expansion.
The transition is equally evident in domestic manufacturing. Solar module manufacturing capacity under the Approved List of Models and Manufacturers (ALMM) reached approximately 144 GW per annum in 2025.[17] Solar PV module manufacturing nearly doubled from 38 GW in March 2024 to 74 GW in March 2025.[18]
Beneficiaries under the Production Linked Incentive (PLI) scheme – launched in 2020 – installed around 11 GW of module manufacturing capacity and 5 GW of cell manufacturing capacity during 2025.[19] This manufacturing scale reduces import dependence, enhances supply-chain resilience and positions India as a competitive export hub for clean energy components.
Green Hydrogen and emerging low-carbon pathways
India's transition strategy extends beyond renewable electricity to hard-to-abate sectors. The National Green Hydrogen Mission, with an initial outlay of ₹19,744 crore, aims to produce at least 5 million metric tonnes of green hydrogen annually by 2030.[20]
As of 2025, incentives have been awarded 450,000 tonnes per annum of green hydrogen production, while competitive bidding has discovered a supply capacity of 724,000 tonnes per annum of green ammonia.[21] The weighted average discovered price of ₹53.27 per kilogram ranks among the most competitive globally, indicating cost leadership potential.[22]
The hydrogen ecosystem now includes refinery integration, steel sector pilots, hydrogen valleys, certification frameworks, and R&D investments. This diversified approach strengthens India's ambition to become a global hub for green fuel production and exports.
Strengthening the next phase of transition
As India deepens its energy transition, parallel reforms to grid infrastructure and distribution remain critical. While the country's cost of capital for grid-scale renewables is competitive among emerging economies, it remains higher than in advanced economies.
Distribution companies owed more than $9 billion in unpaid dues as of March 2025, and transmission bottlenecks have affected up to 60 GW of renewable projects.[23] Addressing these structural issues through grid modernisation, financial restructuring, storage deployment and digital integration will define the next phase of India's transition.
At the World Economic Forum 2026, India highlighted its model for delivering affordability, sustainability and rapid execution simultaneously. Solar tariffs have declined by nearly 80% over the past decade, and renewable energy integrated with storage is increasingly cost-competitive.[24] This combination of scale and price discovery is shaping India's role in global clean energy markets.
Conclusion: A scalable model for the world
With 262.74 GW of non-fossil capacity already installed and a clear trajectory toward 500 GW by 2030, India's clean energy transition is redefining both domestic energy security and global supply chains.[25]
For investors, India offers scale, policy continuity, deep manufacturing capabilities, and emerging leadership in green hydrogen and storage. For developing economies, it offers a replicable pathway that balances growth and sustainability. For global markets, it is one of the most consequential drivers of future energy demand and low-carbon capacity.
This article is written by Aanchal Singh
