March 2023 / India

March 21 2023

Exploring the Rise of Green Energy in India: Investment Opportunities for a Sustainable Future


India has witnessed a tremendous rise in energy consumption in recent years, driven by rapid economic growth and a growing population. To address this demand and balance the pillars of profitability and sustainability, India has set ambitious targets to increase the share of renewable energy in its energy mix, with the goal of achieving 450 GW of renewable energy capacity by 2030. Renewable energy capacity in India increased by 250% between 2014 and 2021, with the non-conventional energy sector receiving FDI inflow of US$ 12.57 billion between April 2000-June 2022. This rise of green energy has created significant investment opportunities for businesses and investors looking to tap into the growing demand for green energy solutions in India.

Sustainability as a way of life is integral to India’s cultural ethos. An eco-conscious global partner gearing to touch the $10-trillion mark by 2035, India is focused on creating a sustainable and inclusive future. The deployment of renewable energy in India is primarily aimed at advancing economic development, enhancing energy security, facilitating access to energy, and mitigating the impact of climate change.

With some parts of the country receiving over 300 days of sunshine every year, India’s natural location along the equator lends it a strategic advantage in solar energy production. This advantage extends to wind energy projects, with India’s 8,000-kilometre coastline. Additionally, India's vast hydropower potential is estimated at over 100,000 MW. These natural bounties have provided India with a unique opportunity to lead the way in renewable energy production and create a green economy.

India has a total installed generation capacity of 408.71 GW, of which the share of renewable energy is 42.26%. The 172.72 GW of capacity from non-fossil fuel sources installed in the country includes 119.09 GW RE, 46.85 GW Large Hydro and 6.78 GW Nuclear Power capacity.

A recent report by the Institute for Energy Economics and Financial Analysis revealed that India witnessed a record-high investment in renewable energy in FY22, with a whopping $14.5 billion invested, depicting a significant increase of 125% from the previous year. Furthermore, this represents a 72% increase from the pre-pandemic period of FY 2019-20. The country is poised to attract over $ 20 billion in renewable energy investments in the year 2023 alone.

Government Policies and Initiatives

In accordance with the five nectar elements, the ‘Panchamrit’ of India’s climate action, the nation seeks to pursue an inclusive and sustainable growth trajectory by ensuring responsible consumption and sustainable resource management. As chair of the G20, India will discernibly push for the provision of finance and technology as critical enablers for achieving the climate goals set by the Paris Accord.

India is set to achieve energy independence through clean technology by 2047, given the push from the Make in India initiative that spans a massive renewable capacity addition. Investors are keeping a keen eye on the sectors of battery storage, EVs, and green hydrogen. The Government has permitted foreign direct investment (FDI) up to 100% under the automatic route in the renewable energy sector to shape the global narrative in favour of decarbonisation and encourage green energy.

The waiving of inter-state transmission system charges for inter-state sale of solar and wind power, and the declaration of a trajectory for renewable purchase obligation up to the year 2029-30 reflect significant strides towards promoting green energy. To facilitate solar project developers to set up projects expeditiously, the initiative for the development of Ultra Mega Renewable Energy Parks has been undertaken. Industry players are bidding for financial incentives offered by the government to expand domestic manufacturing of solar panels and improve supply chain resilience, as part of the production-linked incentive (PLI) scheme.

The government’s recent approval of the National Green Hydrogen Mission is a step ahead in the vision to make India a global hub for the production, utilisation, and export of Green Hydrogen and its derivatives. Enhancing flexibility for investors, investments in this sector can be made via the Foreign Venture Capital Investor (FVCI) route. Adoption of green hydrogen can enable India to abate 3.6 gigatonnes of CO2 emissions cumulatively between now and 2050  and reduce industrial coal imports by 95 per cent.

New energy trading platforms specifically for the renewable energy market i.e., Green Term Ahead Market (GTAM) and Green Day Ahead Market (GDAM) have been introduced for selling off the power by the renewable developers in the open market without getting into long term Power Purchase Agreements (PPAs). India, currently, is the only large electricity market in the world to implement a GDAM exclusively for renewable energy. The Indian Energy Exchange (IEX) traded 341 million units (MU) of renewable energy in February 2023 alone.

India's commitment to sustainable development is demonstrated by the country's gradual decoupling of economic growth from greenhouse gas emissions. The Net Zero Emissions target by Indian Railways alone will curb emissions by 60 million tonnes annually. The UJALA LED bulb campaign is transforming the energy landscape and reducing emissions by a staggering 40 million tonnes annually. The Indian economy is already about 25-28% less emission intensive now, in comparison to the 2005 baseline. Present projections show a roughly 45-50% reduction of emission intensity by 2030, compared to 2005 baseline, in line with the enhanced targets announced at Glasgow. The country's per capita CO2 emissions (1.8 tonnes per capita) are significantly lower than the global average, rendering it a testament to India's sustained efforts to reduce emissions and promote sustainable development.

India is promoting the outreach and potential of its initiatives in the climate change and disaster risk reduction spheres as envisaged in the International Solar Alliance and Coalition for Disaster Risk Initiative projects. On the domestic front, India has implemented the National Action Plan on Climate Change (NAPCC) which includes eight missions focusing on various sectors such as solar power, energy efficiency, sustainable habitats, and more. These initiatives showcase India's commitment to fighting climate change and promoting sustainable development globally and domestically.

Recently, the Sweden India Business Council signed a memorandum of understanding (MoU) with the Maharashtra government to collaborate on waste to energy, sustainable infrastructure and transportation, defence manufacturing, and investment. Under the U.S.-India Strategic Clean Energy Partnership (SCEP), both sides have expressed their support for the development and deployment of hydrogen technologies and the launch of a new Energy Storage Task Force. The Indian Minister of Commerce expressed interest in increasing U.S. collaboration in solar power, battery storage, and offshore wind turbines, and is set to welcome the planned Clean Energy and Environmental Technology Business Development Mission to India in 2024.

The government is, also, targeting its first indigenously designed and built hydrogen train to roll out in December 2023. In the sphere of the Indian semiconductor segment, investments are progressing, with the first few announcements expected in the coming weeks.

Role of the Private Sector

Indian power producers are transitioning towards carbon neutrality and investing heavily in renewable energy. Tata Power has pledged to not build new coal-fired projects while JSW Energy is investing in solar, wind, and hydropower plants to become carbon neutral by 2050. Reliance has acquired REC Group of Norway and invested in German solar wafer manufacturer NexWafe GmbH to expand its solar capabilities. Private companies such as Greenko and ReNew Power are offering on-demand energy solutions and storage services. Independent power producers (IPPs) are partnering with companies with technological prowess to develop decarbonisation solutions, presenting opportunities for global strategic investors to collaborate and invest in local players.

The innovation industry has become an emerging player in the sector. The Government of India has recognized over 4600+ startups under the sustainability sectors as of November 2022. These startups are working in the domains of nuclear energy, solar energy, clean technology, electric vehicles, etc. India has recognized over 2,212 startups in the renewable energy sector, 1903 startups in the green technology sector, and 504 startups in the waste management sector.


India's commitment to sustainable development is evident in its ambitious goals to increase green energy capacity and decrease greenhouse gas emissions. The country's abundant natural resources, including its potential for solar, wind, and hydropower energy, provide a unique opportunity for India to lead the way in renewable energy production and create a green economy. The government's policies and initiatives demonstrate India's unwavering dedication to promoting decarbonization and encouraging green energy. The recent surge in renewable energy investment in India, a staggering 125% increase from the previous year, underscores the growing demand for green energy solutions in the country. Ultimately, India aims to achieve energy independence through clean technology by 2047, with a strong emphasis on promoting sustainability and inclusivity.

Source: Invest India

March 29 2023

Infrastructure Development in India

An economy's infrastructure is pivotal in propelling its progress and setting the stage for its future development possibilities. Infrastructure development is crucial to achieve the India 2047 vision for a $ 40 trillion economy and be reclassified from a developing economy to a developed economy. In the aftermath of COVID-19 and the digitisation of the world, the focus rests not only on physical infrastructure, but on digital and social infrastructure as well.

India is undertaking ambitious infrastructure projects such as the Chenab Bridge in the state of Jammu and Kashmir, one of the tallest arch railway bridges in the world, which is built at one of the highest altitudes with a broad-gauge Indian Railway line throughout its entire span. This bridge showcases the immense talent that Indian engineers possess and is proof that with the right leadership, this talent can create innovative and sustainable infrastructure for the growth of India.

The Indian government focuses on India’s infrastructural needs and has developed various schemes and policies in this regard. The National Infrastructure Pipeline (NIP), introduced in 2019 emphasizes social and infrastructure projects including energy, roads, railways, and urban development projects worth INR 102 lakh crores. The Centre and States have nearly equal contribution (39% and 40%) while the private sector has a 21% share. NIP is complemented by the PM GatiShakti Master Plan which is dedicated to improving India’s logistics network. In India Budget 2023-24, the Indian government emphasized the need for increased spending in the infrastructure sector and nearly trebled its infrastructure spending to 3.3% of GDP compared to its spending in 2019-20. The Budget has allocated INR 75000 crores for 100 projects deemed critical to improving the overall multimodal logistics infrastructure.

For better coordination between state and centre, the central government has extended the tenure of 50-year interest free loans to state governments to help them undertake infrastructure investments and incentivise complementary policy actions in infrastructure development. The government announced that an Urban Infrastructure Development Fund (UIDF) will be established through use of priority sector lending shortfall to create urban infrastructure in Tier 2 and Tier 3 cities with an outlay of INR 10000 cr per annum. The central government has encouraged state governments to utilize resources from the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF.

Infrastructure development requires the involvement of multiple stakeholders for the overall growth of the society. Thus, the Indian infrastructure sector primarily utilises the Public-Private Partnership (PPP) approach. As per the Department of Economic Affairs, India has taken a systematic approach to create a robust PPP program for “delivery of high-priority public utilities and infrastructure.” With “close to 2000 PPP projects in various stages of implementation, India’s program is one of the largest in the world according to the World Bank.” Under PPP, infrastructure is developed under the “Build-Operate-Transfer (BOT)” model and the private sector is incentivised to build and maintain the infrastructure effectively so that more and more people use it which would provide revenue to the private sector.

The government has advised and provided financial resources to over 16 different ministries to create infrastructure under PPP. The goal is to create a seamless supply chain for the movement of goods and services. The National Logistics Policy (NLP) announced in 2022 formalizes this approach and aims to reduce the logistics cost in India to under 10% and be one of the top 25 countries in the world in the Logistics Performance Index ranking. Under NLP, the government has launched the Unified Logistics Interface Platform (ULIP) to provide all digital services related to the transportation sector into a single portal creating a single-access point for all.

Railways, one of the most important segments of India’s overall infrastructure development, has been allocated INR 2.4 lakh crores for the development of new semi high-speed Vande Bharat trains that are aimed at enhancing connectivity and for the upgradation and maintenance of railway tracks to allow for high-speed travel. This allocation to the railways sector is nearly nine times the allocation compared to a decade ago. The Ministry of Railways is in the process of developing 2 dedicated freight corridors – Eastern Dedicated Freight Corridor (EDFC) and Western Dedicated Freight Corridor (WDFC) with over 1724 km of track commissioned till date at an expenditure of over INR 97000 crores. These freight corridors will connect important sectoral manufacturing hubs like Ludhiana and Mumbai with important ports allowing freight to be transported on these dedicated lines, thus freeing up passenger train network and reducing congestion resulting in improved on-time performance of the railways.

The government has prioritised transport infrastructure in its overall spending. Alongside Railways, Ministry of Transport and Highways allocation in the Budget increased by 36% over the previous year to develop new expressways. Many new expressways such as Delhi Mumbai expressway—with recent launch of the Dausa-Lalsot section—Bengaluru-Mysuru expressway, Agra-Lucknow expressway have been developed under the Road Connectivity scheme which has allowed for cities to be interconnected with lower travel times.

Highlighting the role of interconnected infrastructural development, many departments have partnered to launch convergence schemes. One such scheme is KRISHI- UDAN which has been launched to help farmers transport their perishable goods. Airports Authority of India (AAI) provides full waiver of Landing, Parking, Terminal Navigational Landing Charges (TNLC) and Route Navigation Facility Charges (RNFC) for Indian freighters and P2C (Passenger-to-Cargo) Aircraft. Complementing this scheme is the aviation sector-specific RCS-UDAN which incentivises airlines for providing air connectivity to low traffic routes, which were otherwise unserved. The private sector has partnered with the government for construction and operations of newer airports resulting in projected total number of airports to be 200 by end of 2024. These airports are serving upcoming commercial centres in India increasing utilisation of air cargo transport facility and empowering farmers under KRISHI-UDAN.

Likewise, Ministry of Shipping under the SagarMala scheme is developing inland waterways network throughout the country under the PPP model to promote shipping and facilitate trade. As per the latest progress report Standing Committee on Transport, Tourism and Culture, almost 56 port connectivity projects have been completed and 69 are under implementation along with completion of 33 port-led industrialisation projects.

The government has also made great strides in implementing progress in digital infrastructure through various schemes such as Digital India scheme and Telecom Technology Development Fund. There has been a 200% increase in rural internet subscriptions between 2015 and 2021 vis-a-vis 158% in urban areas. This is evidence that rural and urban connectivity is catching up. Between 2019-2021, 95.76 million internet subscribers were added in rural areas vis-a-vis 92.81 million in urban areas.

Cumulatively, the collective development of India’s infrastructure propels India’s economic growth. With increased demand for labour, goods and capital expenditure on infrastructure, there is an increase in industrial growth. Studies by the Reserve Bank of India and the National Institute of Public Finance and Policy estimate that for every rupee spent on infrastructure, there is a 2.5 to 3.5 rupee gain in GDP. Trade benefits as logistics and connectivity improve and the public benefits from a better quality of life with improvement in critical infrastructure and an overall increase in per capita income. India can thus truly realize its vision of becoming a developed nation by 2047.

Source: Invest India