Hints Of Geo-Economics Shift As India Takes Green Energy Leap

Hosted by The Energy and Resources Institute (TERI), the World Sustainable Development Summit (WSDS) 2025, held in Delhi over March 5-7. underlined the vital need of global cooperation in hastening the change to a low-carbon economy.

Not only is India's ambitious increase of renewable energy a strategic geoeconomic navigation with major consequences for trade realignment, money flows, and energy security, but it also is a crucial environmental need.

An Expansive Vision

Targeting 50 per cent of its total installed power capacity from non-fossil fuel sources by 2030 and net-zero emissions by 2070, India has set high renewable energy ambitions.

The Ministry of New and Renewable Energy (MNRE) estimates that India's installed renewable energy capacity as of January 2025 is 165.20 GW, or 35.43 per cent of the country's total power capacity. With 100.33 GW, solar power leads this expansion and clearly shows a move towards photovoltaic energy generation.

Reducing greenhouse gas (GHG) emissions calls for this structural change. India is still dedicated to lowering emissions intensity of its GDP by 45 per cent relative to 2005 levels by 2030 and has already achieved a 36 per cent reduction between 2005 and 2020.

These activities support India's leadership in global climate governance projects such Mission Innovation and the Clean Energy Ministerial and line up with its responsibilities under the Paris Agreement.

Role Of Global Partnerships

WSDS 2025 highlighted the importance of strategic partnerships in facilitating the smooth transfer of technology and financial resources necessary for a green transition. A notable initiative is the INDGREEN Project, a collaboration involving CICERO (Norway), TERI SAS. 

This project seeks to evaluate India's changing role in global energy governance and examine the relationship between renewable energy policies and economic growth.

These international collaborations have enabled crucial investment flows and knowledge-sharing that are essential for enhancing renewable energy deployment. Bharat Petroleum Corporation Limited (BPCL) has pledged US$ 1.19 billion to develop 2 GW of renewable energy capacity by 2025, with an ambitious goal of reaching 10 GW by 2035.

International financial institutions like the World Bank and the Asian Development Bank (ADB) have been instrumental in supporting India's growth in renewable energy. They are using innovative financial tools, such as concessional loans and blended capital structures, to help reduce investment risks in new areas like offshore wind energy and green hydrogen.

Renewable Energy As Geoeconomic Catalyst

India’s shift towards renewable energy goes beyond just environmental concerns; it acts as a driving force for economic transformation and geopolitical shifts. From April 2000 to September 2023, Foreign Direct Investment (FDI) in India's renewable energy sector has totaled US$ 15.36 billion, showcasing robust confidence from global investors.

India’s role in the International Solar Alliance (ISA), which it co-founded with France, highlights its commitment to promoting solar energy worldwide, especially in developing countries. This initiative is vital for enhancing energy diplomacy with nations in Africa, Southeast Asia, and Latin America, positioning India as a key player in the global renewable energy supply chain. 

India is also building strategic energy partnerships with important trade allies like the European Union, Japan, and Gulf countries. The increasing focus on green hydrogen has resulted in new bilateral agreements, including collaborations with Germany and the United Arab Emirates to create integrated hydrogen supply chains. These efforts reflect India’s goal to become a significant clean energy exporter and strengthen its position in global energy trade networks.

Confronting Structural Challenges 

While India has made notable strides in its renewable energy transition, it still grapples with significant structural challenges. Upgrading grid infrastructure, ensuring energy security, and addressing the socio-economic impacts of decarbonising traditional industries require focused policy measures.

Projections suggest that without effective mitigation strategies, India could face a GDP loss of 24.7 per cent by 2070 due to climate-related disruptions.

The increasing demand for essential minerals — like lithium, cobalt, and rare earth elements — underscores the importance of building resilient supply chains. To reduce supply risks, India is boosting its domestic extraction and processing capabilities while also diversifying its sources for mineral imports.

Initiatives led by the government, such as the National Electric Mobility Mission Plan (NEMMP) and Production-Linked Incentive (PLI) schemes, are designed to strengthen domestic manufacturing for renewable energy components. 

The variable nature of solar and wind energy calls for improvements in energy storage technologies. The National Energy Storage Mission (NESM) is promoting research into large-scale battery storage options, including lithium-ion, sodium-ion, and new solid-state battery technologies, to improve grid stability and efficiency.

Strategic Pathways For Future

India’s shift towards renewable energy represents a significant economic and geopolitical transformation. The WSDS 2025 emphasised that ongoing multilateral collaboration, strong policy frameworks, and consistent financial support will be crucial for India to achieve its goal of becoming a global leader in clean energy.

In the coming decade, India’s success will depend on its capacity to enhance renewable energy infrastructure, invest in advanced technologies such as green hydrogen, and create secure supply chains for essential minerals.

By leveraging its renewable energy capabilities, India is set to not only lead in sustainability but also to become a key economic and diplomatic player in the changing global energy landscape.