India is on track to become a major clean energy force, but it must significantly ramp up investment to meet soaring power demand and climate goals, according to a new report from U.S.-based think tank Rocky Mountain Institute (RMI).
The report, released Monday, projects that India’s energy demand could triple by 2050. This surge will be driven by rapid economic growth, increased urbanization, a growing middle class, and higher demand for air conditioning.
RMI highlights India’s unique opportunity to build its energy system with clean technologies from the outset. Unlike the United States and Europe, most of India’s mid-century building infrastructure has not yet been constructed. This offers a chance to avoid the costly and carbon-intensive retrofits faced by developed nations.
However, the report also warns that India currently accounts for only 4% of global clean energy investment. Without a major financial boost, the country risks falling short of its ambitious climate and energy targets.
“If financing keeps pace, India could avoid more emissions by 2050 than Europe and North America combined,” the report said, adding that the country could become a model for clean energy transitions in emerging economies.
But the gap between ambition and action remains wide. India invested $13.3 billion in renewable power generation and transmission in fiscal year 2024 — a 40% increase from the previous year. Still, it falls far short of the $68 billion in annual investment needed to reach 500 gigawatts (GW) of renewable capacity by 2030 and over 600 GW by 2032, according to clean energy think tank Ember.
To meet those goals, India will require a total capital flow of $300 billion by 2032. Without it, the country could miss a critical chance to lead the global clean energy shift and meet its own climate commitments.