Executive Summary
India has crossed a structural threshold: clean energy is no longer a climate choice; it is now economic statecraft. Handled strategically, it can halve economy-wide energy costs and halve fossil-fuel imports by mid-century, converting over US$200 billion per year currently spent on fuel imports into domestic capital formation and infrastructure investment. This would deliver a decisive boost to industrial competitiveness, energy security, and trade stability. Managed poorly, however, it risks remaining a fragmented sectoral transition, leaving India exposed to import volatility, fuel-price shocks, and stranded capital.
This report frames the current moment as a decisive economic opportunity. It identifies ten technologies and industrial platforms capable of translating India’s energy transition into tangible outcomes of lower energy costs, reduced import dependence, improved air quality, and high-value employment, while positioning the country for leadership in emerging global markets.
India’s position at this juncture is unique among major economies, combining four structural advantages rarely aligned at scale. First, solar-plus-storage prices have fallen to record lows, enabling near-24×7 clean power for under ₹4/kWh. At this price point, clean electricity extends beyond the power sector, making industrial and transport electrification economically viable while offering long-term tariff stability through 12–25-year contracts. Second, an integrated national electricity grid, together with open-access and captive procurement frameworks, allows large industrial consumers to directly source low-cost clean power, accelerating green manufacturing and electrification across sectors such as data centres, metals, and industrial heat. As carbon-linked trade measures—including the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM)—take effect, these low-carbon production pathways can unlock new export opportunities. Third, rising fuel imports—now approaching 4 percent of GDP—create a clear pathway for clean energy to strengthen energy security and macroeconomic stability. For example, electric freight trucks, already around 50-percent cheaper than diesel on a per-kilometre basis, offer a credible route to reducing oil dependence. Fourth, global capital is increasingly seeking scalable clean-energy platforms in emerging markets just as India is poised to become the world’s second-largest clean-energy market, supported by a strong manufacturing base and deep engineering talent.
Against this backdrop, India’s strategy should focus not on dispersing effort across many sectors but on deliberately cultivating a small set of high-impact technologies capable of delivering three simultaneous outcomes: rapid economic growth, large-scale job creation, and deep emissions reductions. The ten priorities identified in this report form a coherent growth strategy anchored in low-cost, firm clean electricity—positioning clean energy as a driver of competitiveness, investment, and trade rather than solely an environmental objective.
Rather than evaluating strategies through a narrow decarbonisation lens, the report applies an integrated economic and industrial framework. It prioritises areas where India’s structural advantages—low-cost power, domestic market scale, institutional credibility, and a growing talent base—intersect with expanding global demand. These opportunities share three defining characteristics: they are energy-intensive and benefit disproportionately from low-cost clean electricity; they are globally scalable with rapidly expanding markets; and global leadership has not yet been irreversibly established, creating a strategic window for India to enter and scale.
Strategic timing now matters as much as ambition. The ten priorities identified here focus on areas where clean energy can deliver large domestic dividends—halving energy costs and imports, improved air quality, and high-value employment—while positioning India for exports in rapidly expanding global markets. Crucially, these are sectors where global leadership is not yet locked in and where India’s comparative advantages—low-cost power, domestic market scale, institutional credibility, and a growing talent base—can shape outcomes.
The following tables provide a detailed analysis of each strategy, examining how India’s structural strengths translate into domestic economic benefits and emerging global competitiveness.
Table 1: Strategic Opportunity Matrix
| Strategies | Comparative Advantage | Domestic Dividend | Export Opportunity & Addressable Market | Policy Levers | |
| Deployment and Scale-Ready Engines | |||||
| 1 | Fast RE Deployment to Reach 1,000 GW by 2035 | Record-low solar + storage prices implying near 24×7 clean power at Rs 4/kWh ($45/MWh); integrated national grid and favourable open access and captive procurement framework; strong institutional capability and innovative auctions; robust electricity demand growth. | Reduce electricity cost by 15%; maintain grid reliably while offering a long runway to existing fossil capacity; new construction jobs; utilise domestic solar panel and battery manufacturing. | Double the RE deployment rate from ~40-50GW/year to 80-100 GW/yr, including storage; Create 50 RE zones of 20-30 GW each to integrate 1,000 GW RE by 2035. | Expand non-utility demand, co-locate RE with storage, and use surplus transmission interconnection at existing plants to double annual deployment to 80-100 GW/yr. |
| 2 | Electric Trucks | Strong auto manufacturing sector; capabilities; battery manufacturing is also increasing; strong economic and industrial growth implies a large freight truck market that can offer scale. | Imported crude oil substitution; reduce & inflation-proof freight transport cost. | Each year ~400,000 new freight trucks are sold in India with ~4 million globally. Electric truck sales are already ~10-15% of the new truck sales in China. | Implement technology-agnostic zero-emission vehicle (ZEV) sales mandates for trucks, paired with corridor charging infrastructure. |
| 3 | Advanced Grid Technologies | Strengths in manufacturing electrical equipment; strong domestic demand and power sector institutional capability that can offer scale to reduce costs. | Doubling grid capacity within existing right of way at low cost to integrate large amounts of RE in the grid. | Increasing global demand for critical grid equipment including advanced conductors and transformers from a trustworthy partner; Target building 100,000 circuit km of advanced conductors to integrate 1,000 GW of RE by 2035. | Mandate total-cost-of-ownership–based transmission planning and deploy advanced conductors and reconductoring as default options. |
| 4 | Data Centres and Digital Energy Infrastructure | Low-cost 24×7 clean electricity for data centres; global leadership & scale with UPI and Energy Stack; smart demand, distributed solar and storage. | Reduce energy costs and improve infrastructure utilisation; deepen energy markets | Green data centres can attract new FDI; new business models in energy markets enabled by smart financial technologies could be scaled globally | Create green data-centre enclaves with assured 24×7 clean power and enable new markets using energy-linked digital services built on India’s digital public infrastructure. |
| 5 | Advanced Cooling Technologies | Strengths in manufacturing; massive domestic demand of room ACs that can offer scale for cost reduction; strong standard-making institutions and momentum due to recent revisions; announcements at COP-28 and CEM of doubling energy efficiency by 2030 | Reduce consumer energy bills by 20-40%; help adopt to heat stress due to rising temperatures; make grid integration of solar energy more economical by lowering the electricity demand during non-solar hours | India’s room AC market is 14 million units/yr, doubling every 10 years. Efficient ACs could reduce 60GW of peak demand by 2035 or so. Global room AC market is ~150 million/yr, with nearly half in China. Significantly increasing room AC demand, especially from the global south. | Commit to an aggressive and long-term MEPS trajectory—2030 MEPS set at today’s best technology sold in India; 2035 MEPS set at today’s global best. |
| Market Building Platforms | |||||
| 6 | Green Steel and Fertiliser | Strong steel manufacturing capacity; seasonally consistent solar resources critical for continuous green H2 production; growing capability to manufacture low-cost electrolysers; large domestic demand providing scale (steel ≈140 MT/yr, doubling every decade; urea ≈ 25–30 MT/yr). | Substitute expensive coking coal and imported natural gas with domestic solar resources; inflation-proof steel and fertiliser production; reduce exposure to volatile fossil fuel imports; lower and stabilise fertiliser subsidy burden (≈$20 billion/yr). | Global steel market is ~2 billion tons/yr (~$1 trillion/yr); 50% produced by China. Demand for green steel rising due to net-zero goals & import policies like CBAM. Global urea market is $150 billion/yr, impacted by gas market volatility. Inflation-proof green fertiliser is a big opportunity. | De-risk first projects through long-term offtake guarantees and time-bound public procurement mandates with price caps. |
| 7 | Industrial Heat Electrification | ~50% of the final energy use in industrial processes is heat, offering robust domestic demand for scale. Open access and captive procurement makes low-cost clean electricity available to all large consumers. Strong heat battery manufacturing capability. | Electric heat pumps and thermal batteries can substitute imported oil gas used for industrial heat by clean electricity; give industries a global edge due to low & inflation-proof energy costs; large air quality benefit | Heat electrification tech would be a strong export market as countries face volatile fossil fuel markets and tightening climate regulations; clean electrified manufacturing clusters could unlock a new channel for FDI | Aggregate demand at industrial clusters, remove open-access barriers, and provide accelerated depreciation for high-capex electrification equipment. |
| 8 | Sustainable Aviation Fuel | Potential use of crop residue that is otherwise burned & causes air pollution; India is the third largest aviation market in the world | Imported crude oil substitution; potential commercial use of biomass/crop residue to boost farmers’ incomes and avoid biomass burning related air pollution | Global aviation fuel market is over $300 billion/yr and nearly doubling in the next decade. Most major airlines have SAF and net-zero goals. | SAF blending mandates at major airports; fiscal & offtake support for first few plants. |
| Frontier Technology Bets | |||||
| 9 | Storage Technologies Beyond Lithium | Strong manufacturing base: large auto and grid markets can offer scale to reduce the cost of new technologies | Diversify storage supply chains and leverage domestic mineral / material availability such as zinc or iron etc. Cross-seasonal grid balancing support requires long duration storage under $10-20/kWh. | Global battery demand is over 1,000 GWh/yr (auto, grid, and consumer electronics), doubling by 2030. 80% of the lithium-based battery supply chain is dominated / controlled by China. | Fund RD&D, pilots, and early procurement through VGF and tax incentives. |
| 10 | Electrolysers | Strengths in manufacturing; Green hydrogen mission targets 5 MT of green H2 by 2030; long-term green H2 demand from steel and fertiliser sectors offer scale to reduce costs; encouraging initial auction results | Reducing the cost of electrolysers under $300/kW is critical for economical production of green H2 (and thus green steel, fertiliser, and other products); reduce import dependence | PEM electrolyser cost in the US & EU is >$1000/kW. Very high global demand for good quality, low-cost electrolysers. Solar capital cost in India is half that in the US, which can be replicated for electrolysers. | Electrolyser manufacturing linked green hydrogen auctions and VGF support. |
Source: Authors’ own
Together, these strategies distinguish where rapid execution is possible today, where market design must unlock scale next, and where sustained innovation is essential for long-term competitiveness.
The combined effect of such clean energy strategies on India’s energy imports is illustrated in Figure 1. Under a Clean Energy Pathway, characterised by rapid deployment of low-cost clean energy, total fuel and critical mineral imports decline by more than 60 percent by 2047 relative to a Current Policies Pathway, which assumes continuation of existing policies and limited clean-energy uptake. Importantly, projected lithium and other critical mineral imports account for only about 10 percent of the avoided fossil-fuel imports through 2050.
Figure 1: Total Fuel and Critical Mineral Imports (in Nominal INR, Under Two Scenarios)
Source: Authors’ estimates based on Abhyankar et al (2023).[1]
Note: The two scenarios are: A Current Policies Pathway, assuming continuation of existing policies and limited clean-energy uptake, and a Clean Energy Pathway, assuming rapid deployment of low-cost clean energy enabled by the ten strategies outlined in this report.
These advantages, however, will not automatically translate into domestic economic gains or global export leadership. Markets can accelerate what already exists, but they cannot by themselves resolve coordination failures, manage transition and supply-chain risks, or create stable demand signals. The government’s role, therefore, is not to provide indefinite subsidies or shield legacy systems, but to shape markets, steer the transition, and reduce strategic vulnerabilities across supply chains. If executed well, this approach can position clean energy as a cornerstone of a resilient, competitive Viksit Bharat by 2047.
Read the report here.
All views expressed in this publication are solely those of the authors, and do not represent the Observer Research Foundation, either in its entirety or its officials and personnel.
Endnotes
[1] Nikit Abhyankar et al., Pathways to Atmanirbhar Bharat: Harnessing India’s Renewable Edge for Cost-Effective Energy Independence by 2047, IECC India Energy and Climate Center, UC Berkeley Goldman School of Public Policy, March 2023.
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