Power boost: What can Asia gain from India's energy transition?

India is among the largest and fastest growing economies in the world. But India’s development ambitions are still heavily reliant on coal, which it has extensive reserves of, to meet its energy needs. This could change as India is looking to establish itself as a key player in the global energy transition, leading to a shift not just domestically, but also in the region.  

The country has made strong progress in installing renewables. In a decade, it has expanded its renewable energy (RE) capacity from just 15 GW in 2014 to over 160 GW in 2024. India’s goal is to install 500 GW by 2030 as part of its commitment to reduce carbon emissions and transition to a low-carbon economy. It aims to meet 50% of its energy requirements from renewables by 2030 and reduce its economy’s carbon intensity by 45% that same year. In 2024, according to a report, the country had already become the world’s third-largest producer of electricity from wind and solar. Between March 2024 and March 2025, India almost trebled its solar cell production capacity. 

Steady progress 

The Indian government is driving large-scale domestic manufacturing of solar panels, wind turbines, and battery storage systems, among other technologies, to provide a solid foundation for its renewables goals.  

While motivated by energy independence, India's transition will likely have a wider impact across Asia. Local manufacturing can strengthen regional supply chains and potentially bring down costs for similar developing markets through trade agreements. That would significantly increase the sharing of technologies, including to South Asian countries that are highly vulnerable to climate impacts.  

Along with China, India’s RE expansion has the potential to decisively tip the balance in favour of Asia, creating new jobs, market and trade opportunities along the way.  

India’s recent announcements, including the expansion of solar energy infrastructure at the household level through government schemes, indicate that a focus will remain on RE in the coming years. Three of the world’s largest solar parks are being built at Bhadla, Pavagada and Kurnool. India also aims to be a major producer and exporter of Green Hydrogen, and its derivatives (ammonia). The Indian government has allocated US $2 billion in incentives for this early-stage technology. At the same time, through its push for international initiatives like the International Solar Alliance (ISA) and the Biofuel Alliance, the country aims to be a major player in energy diplomacy. 

Rising energy demand and India’s vulnerability  

While the progress in RE development is significant, India’s energy demands are rapidly rising too due to industrialisation, urbanisation and population growth. As a result, India continues to be a major emitter of greenhouse gases (GHG), contributing to 8% of global emissions – though its per capita carbon emissions remain low at one-third of the global average. 

The need to fulfill rising energy demands and simultaneously minimise emissions requires a balancing act. India has the potential to become a leader in the global energy transition, but its success depends on tackling key challenges, including: 

• Its dependence on fossil fuels: India's energy security is closely linked to its coal reserves, with the country holding 10% of the world’s coal. Coal met 72% of the country’s electricity needs in 2022. Despite an emphasis on RE, India’s use of coal for electricity generation is likely to continue in the medium term, with government focus on improving the efficiency of existing power plants.
• Lack of alternative clean energy sources to support the transition: Since wind and solar energy are largely dependent on weather conditions, natural gas has been used by developed countries to provide power supply when renewables cannot. India doesn’t have enough natural gas to balance this variability in renewable energy and relies on coal for grid stabilisation.
• Aging and inadequate infrastructure: India’s electricity grid infrastructure is not robust enough for renewables - transmission lines are old, electric transformers are overloaded, and control systems are worn. 
• Need to decarbonise hard-to-abate industries with supportive policies and technology: India’s heavy industries, such as cement, steel, fertilisers and paper, are some of the biggest energy consumers and carbon emitters in the country. Shifting them to renewables requires access to technology and a continuous supply of renewable electricity, which have to be facilitated by government policies.  
• Limited access to climate finance: The transition requires substantial financial investment, which is a challenge for a developing economy like India. There is a need for increased foreign and domestic investment in clean energy research, infrastructure, and technologies. At COP29, India called out developed countries for lacking in ambition of climate finance goals. It has repeatedly said that developing nations cannot be expected to meet high-stake climate goals without financial and technical support. 

India’s energy transition holds transformative potential for its own economy and climate goals and for Asia. However, to realise this, the country needs to overcome its challenges, including coal dependency, modernising infrastructure, decarbonising heavy industries and unlocking climate finance. That requires collective action, bold policy shifts, and stronger collaboration across sectors.  

To chart this path, Climate Group’s Asia Action Summit on 8 May in Singapore will convene key decision-makers and business leaders to explore solutions and accelerate Asia’s role as an economic and green powerhouse – with a clear path to net zero.  

We look forward to seeing you in Singapore, charting a way forward for the energy transition in Asia.