Energy and Renewables

Hormuz disruptions highlight India’s exposure. Over 88% crude is imported, with about half via the strait. LPG risk is higher.

Nuclear offers reliable, low carbon scale. Reaching 100 GW by 2047 needs 4 to 5 GW annual additions, stronger fuel cycles, supply diversification and talent expansion.

Diesel prices may have a marginal effect, but the immediate concern is the fiscal deficit and its inflationary risks. Passing through costs is essential to signal demand correction and shield both consumers and industry.

Renewable energy stands out due to its immunity to crude price volatility. With over 50 GW added in the past year, faster renewable expansion can cut import costs and enhance energy security.

Ports can anchor India's green transition and unlock enterprise value.

• Large energy base enables rapid decarbonisation via electrification and renewables
• Scale hubs for hydrogen, ammonia, methanol, LNG and biofuels
• Critical interface aligning global shipping with domestic policy

By embedding sustainability at the core of port development, operations and investment, India has the opportunity to create ports that are efficient, competitive, resilient and globally relevant.

Energy security is now a strategic priority. As India’s per capita power use rises from ~1400 kWh today to ~4800 kWh by 2050, the grid must scale with reliability. Renewables and nuclear drive decarbonisation, but thermal power remains the backbone ensuring stability and affordability.

Coal demand shows no structural weakness yet. Power and industrial consumption remains strong. Inventory trends are key. Earlier stockpiling may now be cushioning demand as firms run down stocks instead of lifting output.

Circular economy depends on how everyday systems manage materials, waste and resources. The foundations of building a circular economy ecosystem in India have been underway for a few years now. However, without clear measurement, it becomes difficult to recognise the full value of these efforts.

Going ahead, we need improved mechanisms to track and quantify the environmental impact of circular activities. The challenge is to strengthen institutions and create reliable systems so that the environmental benefits generated can be clearly valued, verified and scaled.

Large infrastructure projects in major cities typically undergo robust ESG diligence aligned with environmental standards. The challenge becomes more complex in smaller cities, where projects such as water supply initiatives are often limited in scale. For these smaller projects, the cost of extensive project administration and compliance can be disproportionately high. There are also capacity constraints at the local level, across government agencies, private players, and advisors, particularly when it comes to having skilled resources to carry out consistent ESG diligence across multiple projects.

The absence of reliable data, established baselines, and mature models further adds to the complexity. In this context, automating diligence processes remains difficult until foundational data and capability gaps are addressed.

India’s development journey is entering a new phase, where the country’s growth story will be increasingly shaped by how efficiently we use our resources. The size of our population and the pace of economic activity are placing increasing pressure on natural resources, ecosystems, and waste management systems.

The circular economy offers an alternative to the 'take-make-dispose' model. The output of one industry becomes the input for another. As India works towards its net zero commitment by 2070, measurable environmental benefits become increasingly important. When emissions reductions from recycling, waste recovery, and resource efficiency are measured and recognised within credible carbon frameworks, they can also support economic value.

Our global energy mix is still far from the level of diversification that long-term resilience demands. However, the current geopolitical environment is likely to accelerate this shift. For countries with significant import dependence, this is an important moment to consider a deeper push toward building domestic strength across the full energy value chain, rather than focusing on isolated segments. Strengthening end-to-end capabilities will be essential for stability, competitiveness, and sustainable growth in the years ahead.

Technology, policy, and industry innovation will need to move in step to power India's cleaner fuel transition.

India’s ethanol blending mandate is more than a policy shift. It reflects a bold push to fully utilise the country’s growing ethanol production capacity, strengthen energy security, and cut import dependence.

As we look ahead, increasing blending levels beyond 20% will call for engineering upgrades in vehicles, since most models on Indian roads today are built to handle blends up to the 20% mark.

Market coupling for India's power market will likely increase trading volumes by aggregating bids across exchanges, creating a single clearing price. While this improves efficiency and transparency, it reduces individual exchange autonomy and may limit flexibility in price discovery for participants.

Snehasis Batabyal

Partner, C&O-Commercial-M&M
KPMG in India        

Rare Earth Elements and Permanent Magnet supply chains are central to electric mobility, renewable energy, and advanced technologies. To secure our future, there is an urgent need to scale domestic processing, build integrated industrial clusters and tighten industry–research collaboration. These actions are essential to reduce import dependencies and create strong, resilient supply chains that keep India ahead.

This is a very critical moment for India’s energy journey. As we move firmly on track to becoming the world’s third-largest economy, that growth is energy-hungry. Today, we are at around 500 gigawatts of installed capacity. By 2047, estimates suggest we could be looking at a grid of nearly 2,000 gigawatts. That is an extraordinary expansion, driven significantly by renewables, especially solar.

But renewables come with intermittency challenges. If we are to power an industrial-scale economy of the size we envision, we need reliable baseload generation. At the same time, the planet is warming, and the global call for decarbonisation grows stronger. Irrespective of geopolitical shifts, low-carbon or zero-carbon energy sources are not optional. They are essential.

Nuclear energy, once sidelined in global conversations, has returned to centre stage. In India, given the scale of our ambitions, it has become a key focus. We are currently at about 9 gigawatts of nuclear capacity, and over the next two decades we aim to scale this more than tenfold to 100 gigawatts. That requires not just ambition, but evolution in technology, supply chains, talent, land acquisition, and commercial frameworks.

A landmark legislation has opened the door to greater private sector participation, which the government recognises as necessary to achieve this scale. At the same time, India consumes nearly 20 percent of the world’s data but has only about 2.5 percent of global data centre capacity. The recent Union Budget’s thrust on data centres underscores the importance of data sovereignty, security, and building a resilient domestic ecosystem. All of this adds further pressure on our energy systems.

There are real questions we must address—on pricing and tariffs, on supply chains, on commercial mechanisms, and on trust. Even as nuclear returns to serious consideration, public confidence must be earned, especially when building at this magnitude. If we are to move beyond 2.5 gigawatts per annum and eventually exceed 5 gigawatts per annum post-2032, it demands coordinated action across government, industry, and society. The scale of the challenge is immense, but so is the opportunity.

India’s energy PSUs have delivered one of the decade’s strongest transformation stories, rebuilding themselves with purpose, speed, and a clear focus on national goals. They reshaped how households cook, how cities use power, and how the nation views clean energy, from expanding LPG access to integrating record levels of solar and wind. Their biggest shift is mindset. They chose both legacy and new opportunities and turned that into momentum. A decade on, their reinvention shows that large institutions can change at scale when purpose and people align.

EVs as climate catalyts: Accelerating India's path to net-zero mobility:

EVs become true climate catalysts when we integrate clean electrons, circular batteries, and bankable models, underpinned by interoperable standards. India's transition must have solutions that work for premium buyers, mass market users and public transport. A multi-pathway approach keeps the focus on abatement per rupee and energy security.

Secondary steel producers contribute more than 50% of the domestic steel production, and because of the scale, relevance and contribution without decarbonising this sector, India can’t achieve its net zero goals.

These producers use electric arc furnaces and induction furnaces; the latter tend to be more rudimentary operationally, with potential to address operational efficiencies and utilise greater renewables & scrap.