India’s Clean Power Capacity to Exceed 60 Percent by 2028, Says Report

India has achieved its target of deriving 50 per cent of installed power capacity from non-fossil fuel sources five years ahead of schedule, but challenges remain in electric vehicle adoption, coal dependence and rising electricity demand, according to BloombergNEF’s India Transition Factbook 2026.

The report examines India’s progress in renewable energy, electric mobility, clean hydrogen and economy-wide decarbonisation, while highlighting emerging energy demand from data centres.

India was the world’s second-largest market for annual solar and wind capacity additions in 2025, behind China. The country is expected to retain its position as the second-largest solar market in the foreseeable future, supported by rising electricity demand and falling equipment prices. 

India attracted USD 72 billion in energy-transition investment in 2025, equivalent to around 1.7 per cent of its gross domestic product (GDP), making it the world’s fifth-largest market for such investment. The wind and solar sectors will require an estimated USD 123 billion to USD 163 billion in capital through 2030, measured in real 2025 dollars.

India added 51 GW of solar capacity, measured in direct current, in 2025, 55 percent more than its previous record in 2024. The country overtook the United States to become the largest solar capacity addition market outside China. BloombergNEF expects India to add another 52 GW in 2026 and retain its position as the world’s second-largest solar market.

Rooftop solar has emerged as the fastest-growing segment, supported largely by capital expenditure subsidies. The government is also supporting decentralised agro-photovoltaic projects, although the segment remains relatively small. Co-locating energy storage with solar plants could improve project economics by shifting electricity supply to evening peak-demand hours.

Non-fossil fuel technologies accounted for 80 per cent of the new power generation capacity added to India’s grid over the past decade. These sources met one-third of the country’s electricity demand during the first seven months of 2026. However, coal continues to supply the majority of India’s electricity.

The country is also the world’s fourth-largest market for grid investment. Its transmission expansion plans aim to connect 336 GW of renewable energy capacity by the first quarter of 2032, requiring infrastructure additions equivalent to roughly twice the capacity of the existing UK grid.

BloombergNEF projects that non-fossil fuel sources will account for more than 60 per cent of India’s installed power capacity by 2028, seven years ahead of the revised target under its Nationally Determined Contribution (NDC).

India’s revised NDC also targets a 47 per cent reduction in the emissions intensity of GDP by 2035 from 2005 levels. BloombergNEF said that this goal could be achieved under its base-case scenario for the evolution of the country’s energy sector.

The energy transition could also improve India’s energy security by reducing dependence on imported fuels. Under BloombergNEF’s economics-led scenario, even without additional supportive policies, energy imports could decline from 5.3 per cent of GDP in 2025 to 3.1 per cent in 2035 and fall further to 1.5 per cent by mid-century.

India is emerging as a major supplier of clean hydrogen and green ammonia. Indian companies signed binding contracts during the first four months of 2026 to supply 0.3 million metric tonnes of clean hydrogen annually, including volumes exported as green ammonia. This placed India third globally in cumulative contracted volumes.

Competitive renewable electricity prices, subsidies and auctions have helped Indian producers achieve low green ammonia prices, attracting overseas buyers. Indian companies have signed three major binding offtake agreements to export more than one million metric tonnes annually.

Despite increasing electric vehicle sales, India is likely to miss most of its 2030 adoption targets, BloombergNEF said. The government aims for EVs to account for 80 per cent of two- and three-wheeler sales, 70 per cent of commercial vehicle sales and 30 per cent of private car sales by 2030.

Lower ownership costs, a wider range of models and sustained policy support are helping drive adoption. However, BloombergNEF modelling suggests that three-wheelers are the only category likely to meet the targets. Higher fuel costs linked to the conflict in the Persian Gulf could improve EV economics, but additional measures will be needed to achieve the broader goals.

India’s data centre electricity demand could rise from 11 terawatt-hours in 2025 to 636 terawatt-hours by 2050, equivalent to approximately 11 per cent of the country’s total electricity consumption by then.

With coal currently supplying about 68 per cent of India’s electricity, much of the initial growth in data centre demand could be met by a carbon-intensive grid.

BloombergNEF said that data centre operators could reduce their exposure to emissions by procuring renewable electricity through third-party contracts, captive and group-captive projects, onsite solar installations and power exchanges.

The report concludes that India’s clean energy expansion offers opportunities to reduce emissions and fossil fuel import dependence, but achieving its longer-term transition goals will require continued investment in renewable generation, transmission infrastructure, clean transport and low-carbon electricity procurement.