India’s green energy sector to pull over Rs 31 lakh crore in investments

India’s green energy sector is poised for a transformative leap, with an anticipated investment of approximately ?31 lakh crore (US$ 358.2 billion) by 2030, according to a report by Crisil Intelligence. This aligns seamlessly with the country’s ambitious push toward renewable energy. However, the report highlights a concerning dip in investment potential for certain sectors, notably electric vehicles (EVs), signaling the need for a more robust policy and market push to sustain momentum.

India is anticipating a sharp surge in investments in its green energy sector, according to a report by Crisil Intelligence, which expects an influx of around Rs 31 lakh crore (US$ 358.2 billion) by 2030. While it synchs well with India’s push for green energy, the report asserets that some sectors, particularly EVs, require a stronger push, as they have witnessed a fall in investment potential.

Investments in the electric vehicle (EV) ecosystem have declined in 2024 by around 4% YoY, while mining also registered a 6.2% decline. On the other hand, investment potential in power transmission and renewable energy has risen by 2.6% and 2.7% respectively.

Renewable energy and storage (Rs 19 lakh crore, US$ 219.5 billi0n) is expected to attract the maximum investments. It is followed by the transport and automotive sectors (Rs 4.1 lakh crore, US$ 47.4 billion), and oil and gas (Rs 3.3 lakh crore, US$ 38.1 billion), led by a push towards green hydrogen and smarter refining.

The report also cautions that sectors like green hydrogen and carbon capture will need further support and push from the government, unlike solar and wind that have access to sufficient debt financing, including green bonds, green revolving funds and green credit schemes.

CRISIL also emphasises on the need for collaboration between the private sector, government and international funds. It will be crucial to developing green bond markets and explore innovative financing structures like blended finance to address the funding gap.

In contrast to the investment potential, however, EV sales in India leapt by 27% YoY to close at 19,49,114 units. The surge was led by two wheelers (up by 33%), passenger vehicles (up by 22%) and three-wheelers (up by 18%). Moreover, automakers based in India are planning a slew of launches, many in the premium market, with longer driving ranges and faster charging times, to attract buyers.