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India today stands at the most pivotal moment in its energy and industrial transition since the early 1990s. What the reforms of 1991 did for manufacturing, today’s renewable and clean-industry shift aims to do for the next era of economic competitiveness—define India not just as a low-cost production base, but as a global leader in future-ready green industrial capacity. Yet the new data emerging from the “clean-industry sunbelt” reveals a paradox: India is moving fast, but not fast enough to convert ambition into bankable, scalable outcomes.

According to Reuters, India currently has 53 clean-industry projects under development, tying Australia for the highest number globally in this emerging industrial geography. This would normally signal an ecosystem sprinting toward decarbonised manufacturing—green hydrogen installations, low-carbon cement, renewables-driven metals processing, and advanced battery ecosystems. But only two projects reached final investment decision (FID) in 2025, underscoring the structural bottlenecks that persist behind headlines of progress.

India’s Energy Shifts Have Always Been Political-Economic Projects

India’s renewable transition did not begin yesterday.

The National Solar Mission (2010) was the first major policy catalyst that scaled solar power across states like Gujarat and Rajasthan.

The second turning point came post-2016, when solar tariffs crashed below coal, marking a structural tipping point that made clean energy economically viable, not just environmentally desirable.

The third phase began after 2020, when global investors, supply chain realignments, and India’s own PLI schemes pushed the country into clean manufacturing—electrolysers, green hydrogen, energy-efficient materials, battery storage, and EV ecosystems.


But unlike 2010 or 2016, 2025 presents a different challenge: India is not simply trying to add renewable capacity—it is attempting to redesign entire industrial supply chains to run on clean energy. That requires capital, policy clarity, risk underwriting, and institutional coordination at levels the country has not historically achieved.

Financing: The Biggest Bottleneck in the Emerging-Market Green Transition

High financing costs have always been a structural hurdle for emerging economies, but for clean industries—which require long payback periods—the challenge is even sharper. Capital flows into green hydrogen, carbon-capture technologies, low-carbon cement, or industrial electrification demand patient capital and robust risk guarantees. In India:

Interest rates remain higher than OECD benchmarks.

Long-term infrastructure financing is thinly spread.

Commercial banks remain hesitant to lend to untested industrial technologies.

Green-bond markets are expanding, but not yet large enough to fund deep industrial decarbonisation.


This is why outsized announcements do not automatically translate into FID-ready projects. The mismatch between ambition and bankability reflects an ecosystem still evolving to absorb clean-industry risks.

Regulatory Delays: The Hidden Cost of Outdated Frameworks

Clean manufacturing needs fast, adaptive regulation—but many sectors continue to operate under legacy frameworks:

Cement and steel industries lack modernised regulatory mechanisms for low-carbon technologies.

Environment-clearance structures are slow, inconsistent, and state-dependent.

Grid integration rules for renewable-powered industries remain fragmented.

Land approvals continue to be a major choke point for utility-scale renewables, battery storage parks, and industrial clusters.


This regulatory friction is not new. Historically, India’s power sector reforms—from Electricity Act 2003 to open-access battles—took years to stabilize. Clean-industry regulation now faces a similar multi-layered transition, but the pace of global competition leaves little room for delay.

Renewable Power: The Bright Spot in the 2025 Outlook

Amid these friction points, India’s renewable energy output remains a major growth engine. H1 2025 saw a 24.4% jump in renewable power generation—an indicator of strong momentum in solar, wind, hydro, and hybrid systems. This growth matters because:

Clean power is the backbone of clean industry.

Lower marginal costs of renewable energy improve India’s cost competitiveness in green manufacturing.

Export markets—especially the EU—will increasingly demand low-carbon supply chains.


In the long run, India’s renewable base could become the country’s strongest geopolitical asset, comparable to how oil shaped Middle Eastern economic power in the 20th century.

A Futuristic Outlook: The Next Five Years Will Define India’s Green Industrial Leadership

Globally, the clean-industry race is accelerating at unprecedented speed. The shift is not just about energy—it is about industrial repositioning:

The US is deploying massive capital through IRA-linked incentives.

The EU’s Carbon Border Adjustment Mechanism (CBAM) is restructuring global trade.

China is doubling down on clean-tech dominance in solar, batteries, and critical minerals.

Gulf economies are investing billions to diversify away from hydrocarbons.


India’s 53 clean-industry projects represent both opportunity and urgency. Over the next five years, success will depend on:

1. Reducing the Cost of Capital

Through sovereign green funds, blended finance, and catalytic state support.

2. Regulatory Modernisation

Fast-tracking approvals, digitising compliance, creating technology-specific regulatory sandboxes.

3. Grid & Storage Investments

Strengthening transmission networks, expanding battery manufacturing, and integrating smart-grid systems.

4. Industrial Clusters for Clean Manufacturing

Co-located renewable energy, logistics, research institutions, and global supply chain anchors.

5. Public-Private Financing Partnerships

Similar to the early highway sector reforms that unlocked PPP-led expansions.

India Has Momentum—but Ecosystem Readiness Will Decide the Outcome

India’s rise as a clean-industry hub is real, but incomplete. The intent is strong, investor interest is visible, and renewable power growth is undeniable. Yet financing and regulatory structures remain the critical levers that will determine whether India becomes a global clean-manufacturing powerhouse or a country with many announcements but slow execution.
The next phase of India’s green transition must therefore focus not on adding more projects to the pipeline, but on unblocking the pipeline itself.
Only then will India convert today’s momentum into tomorrow’s competitiveness—and shape the future of the global low-carbon economy.

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