Transmission Sector to Witness INR 5–6 Trillion Capex Between 2026–27 and 2031–32, Says ICRA

Transmission infrastructure in India is set for a multi year investment cycle, with capital expenditure of INR 5–6 trillion expected between 2026–27 and 2031–32, according to ICRA.

The investment will be driven by the Government's plan to evacuate power from more than 900 GW of non fossil fuel generation capacity by 2035–36, including around 548 GW of solar and wind projects.

ICRA said that the planned investments will focus on strengthening the existing transmission network, expanding evacuation capacity and developing new transmission corridors to support upcoming power generation projects. To meet the targets outlined in the National Electricity Plan II, the country will need to add about 20,000 circuit kilometres of transmission lines and 120 gigavolt amperes of substation capacity every year.

Ankit Jain, Vice President and Co Group Head at ICRA Ltd., said that  the transmission sector presents an investment opportunity of at least INR 5–6 trillion over the six year period. He noted that the planned expansion is essential for integrating the large pipeline of renewable energy projects expected over the next decade.

The report noted that outstanding orders and order inflows for major transmission equipment suppliers more than doubled in 2025–26 compared with 2021–22, reflecting the growing demand for transmission infrastructure. While this is expected to support healthy order inflows for equipment manufacturers, ICRA cautioned that limited manufacturing capacity and shortages of skilled manpower could delay project execution unless capacities are expanded.

Execution challenges continue to remain a major concern for the sector. According to ICRA, transmission projects frequently face delays due to land acquisition issues, right of way challenges and regulatory approvals. Most projects awarded through the tariff based competitive bidding route by central nodal agencies have missed their scheduled commissioning dates.

Among the transmission projects commissioned by March 2026 under the tariff based competitive bidding route, only around 12 percent were completed within the scheduled timeline. The remaining projects were commissioned after delays ranging from two months to three years, with the median delay exceeding 10 months. According to ICRA, these delays increase the risk of inadequate power evacuation for renewable energy projects and contribute to grid curtailment.

The rating agency also highlighted the growing impact of transmission bottlenecks on renewable energy generation. In regions with high renewable energy penetration where evacuation infrastructure is yet to become fully operational, developers have experienced significant capacity curtailment since the previous fiscal year.

ICRA said that out of the recently commissioned 54.8 GW of renewable energy capacity, around 33 percent was being evacuated through the Temporary General Network Access (T GNA) route at the all India level as of May 2026. Curtailment under the T GNA mechanism remained particularly high during solar generation hours, ranging between 50 percent and 60 percent during the same period.

The report stated that such curtailment has been more pronounced in Rajasthan and Gujarat, while the southern region has witnessed relatively limited curtailment even during peak solar generation hours.

Looking ahead, ICRA noted that around 107 GW of projects across solar, wind, hybrid, hydro, pumped storage and thermal technologies, which have already received connectivity approval, are scheduled for integration into the Interstate Transmission System network between 2026–27 and 2030–31.

However, the agency warned that delays in commissioning the required transmission infrastructure remain a significant risk. Any slippages in transmission project timelines could slow renewable energy capacity additions or prolong grid curtailment, materially affecting the returns of renewable energy projects.