India, the world’s third-largest energy consumer, stands at a critical juncture in its economic and environmental journey. With a rapidly expanding economy projected to grow at over 7% annually, the nation faces the dual challenge of meeting soaring energy demands while reducing its carbon footprint. The question is not just whether India can shift to green energy, but if it can do so without compromising its impressive growth trajectory. This article explores India’s current energy landscape, policies driving the transition, its heavy reliance on imported fossil fuels, the role of refined product exports, and the sources of its renewable energy equipment.
India’s Current Energy Mix: A Coal-Dominated Portfolio with Growing Renewables
India’s energy mix remains heavily reliant on fossil fuels, particularly coal, which powers the bulk of its electricity generation. As of 2025, coal accounts for approximately 71% of the country’s electricity mix, with hydropower at 9% and solar at 8%.
In the first half of 2025, clean energy generation—including renewables, hydro, and nuclear—reached an average share of 25%, up from 21% in the same period of 2024, marking a new peak in sustainable output.
For the fiscal year 2024-25, India generated 1,824 terawatt-hours (TWh) of power, with 25% coming from non-fossil sources.
The total installed power capacity hit 495 gigawatts (GW) by August 2025, bolstered by the addition of 25 GW of new solar capacity alone.
In the first half of 2025, India added a record 22 GW of renewable energy capacity, a 57% increase from the previous year.
Despite these gains, fossil fuels still dominate, reflecting the challenges of transitioning a system built around coal for baseload power. Natural gas plays a smaller role but is expected to grow by 60% in access and usage as part of diversification efforts.
Energy Policies: Ambitious Targets Amid Financing Hurdles
India’s energy policies are increasingly geared toward a green transition, with a strong emphasis on renewables to achieve energy security and climate goals. The government has set an ambitious target of 500 GW of non-fossil fuel capacity by 2030, as pledged at COP26, and the Ministry of New and Renewable Energy (MNRE) is actively pursuing this through incentives and investments.
The Union Budget for 2025-26 highlights a push for nuclear energy as part of the long-term strategy, alongside renewables, to diversify the mix.
Policies like stable incentives for clean energy and efficiency have driven recent improvements, positioning India as a leader in energy efficiency gains.
In 2025, India invested US$62 billion in its energy transition, focusing on renewables, electric vehicles, energy storage, green hydrogen, and related infrastructure.
The budget also emphasizes long-term energy security and domestic manufacturing to reduce import dependencies.
However, challenges persist: over 50 GW of renewable capacity remains stranded due to lagging transmission infrastructure as of June 2025.
The government warns that achieving these goals requires massive international financing, estimated at $13 trillion, to avoid sacrificing economic growth.
Power demand is forecasted to peak at 370 GW in 2025, an 8% rise from the previous year, driven by urbanization and industrialization.
Oil and Gas Imports: High Dependency on Foreign SuppliesIndia’s economic growth is fueled by imported energy, with an 89% dependency on oil and gas imports costing $143 billion annually.
Crude oil imports rose by 4.2% to 242.4 million metric tons (MT) in FY25.
Russia has emerged as the top supplier, accounting for 37% of imports in 2024, up from less than 1% before the Ukraine conflict, followed by Iraq and other Middle Eastern nations.
In 2024, Russian crude held a 36% market share.
For liquefied petroleum gas (LPG), imports totaled significant volumes from the Middle East and the US: 8.1 MT from the UAE, 5 MT from Qatar, 3.4 MT from Kuwait, and 3.3 MT from Saudi Arabia in 2024.
Natural gas consumption is projected to grow, with imports playing a key role in meeting demand.
U.S. crude imports to India hit 11.2 million barrels in May 2025, the highest since August 2024, signaling diversifying sources amid geopolitical tensions.
This import reliance exposes India to global price volatility, with crude at around $71 per barrel.
Refined Products Exports: A Key Revenue Stream
Despite heavy imports, India is a major exporter of refined petroleum products, leveraging its refining capacity of 256.816 million metric tons per annum (MMTPA) as of 2024, the fourth-largest globally at 5.17 million barrels per day.
In FY2024, exports reached 62.44 MMT, with transportation fuels comprising 84% of the total.
For the first nine months of FY2024-25, exports stood at 47.5 MMT, up 1.5% year-over-year.
Key destinations include Singapore, the United States, and the Netherlands, with 2023 exports valued at $55.8 billion.
Exports to Europe surged 26% in July 2024 to 266,000 barrels per day, hitting a record in November 2024.
Petroleum products are among India’s top 10 exports, contributing significantly to foreign exchange earnings.
This export strength helps offset import costs but underscores the need for a balanced transition to avoid disrupting refining jobs and revenues.Sources of Renewable Energy Equipment: Shifting Toward Self-RelianceWhile India is self-sufficient in renewable energy generation potential, it has historically relied on imports for equipment like solar panels and wind turbines.
To promote domestic manufacturing, the government imposed Basic Customs Duty (BCD) on imported solar PV cells, modules, inverters, and glass in 2025.
China remains the dominant supplier for solar equipment, though policies aim to reduce this dependency. India is poised to become the second-largest solar module manufacturer by 2025, with FY23 exports reaching $1 billion in PV modules.
Solar module exports to the US and Europe are expected to peak in 2025 before potentially declining from 2026.
For wind energy, suppliers include global players from Denmark (e.g., Vestas), Germany (Siemens Gamesa), and increasingly domestic firms. Installed solar capacity stands at around 67 GW (older data, but growing), while wind reached 51.6 GW by FY2024-25, with 4.15 GW added that year.
The renewable equipment market in India was valued at $13.6 billion in 2024, projected to grow to $27.87 billion by 2033 at a CAGR of 8.3%.
Conclusion: A Feasible but Challenging Path Forward
India can indeed transition to green energy while sustaining economic growth, but it requires overcoming infrastructure bottlenecks, securing international funding, and accelerating domestic manufacturing. The 500 GW non-fossil target by 2030 offers a roadmap, but with coal still dominant and imports fueling 89% of oil needs, the shift must be gradual to avoid energy shortages. By leveraging its refining export prowess and renewable potential, India could emerge as a global leader in sustainable development. Success hinges on policy execution and global cooperation—proving that green growth is not just possible, but imperative for the world’s fastest-growing major economy.
Several key issues. If India can take over manufacturing from China, they will be able to build their own solar and wind products without the cyber threat of bugs and spy backdoors.
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