Study Report on Scenarios towards Viksit Bharat and Net Zero: An overview (Vol. 1)

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VOL. 1
Scenarios Towards Viksit Bharat 
and Net Zero: An Overview
A STUDY REPORT ON  
VOL. 2
MACROECONOMIC
IMPLICATIONS
SCENARIOS TOWARDS VIKSIT BHARAT AND NET ZERO
VOL. 11
SOCIAL IMPLICATIONS
OF TRANSITION
SCENARIOS TOWARDS VIKSIT BHARAT AND NET ZERO Copyright © NITI Aayog, 2026
NITI Aayog
Government of India,
Sansad Marg, New Delhi–110001, India
Suggested Citation
NITI Aayog. (2026). A Study Report On - Scenarios Towards Viksit Bharat and
Net Zero: An Overview (Vol. 1).
Available at: https://niti.gov.in/publications/division-reports
Disclaimer
1. This document is not a statement of policy by the National Institution for
Transforming India (hereinafter referred to as NITI Aayog). It has been prepared
by the Green Transition, Energy, Climate, and Environment Division of NITI Aayog
under various Inter-Ministerial Working Groups (IMWGs) constituted to develop
Net-Zero pathways for India.
2. Unless otherwise stated, NITI Aayog, in this regard, has not made any representation
or warranty, express or implied, as to the completeness or reliability of the
information, data, findings, or methodology presented in this document. While due
care has been taken by the author(s) in the preparation of this publication, the
content is based on independently procured information and analysis available at
the time of writing and may not reflect the most current policy developments or
datasets.
3. The assertions, interpretations, and conclusions expressed in this report are those
of the author(s) and do not necessarily reflect the views of NITI Aayog or the
Government of India, unless otherwise mentioned. As such, NITI Aayog does not
endorse or validate any of the specific views or policy suggestions made herein by
the author(s).
4. NITI Aayog shall not be liable under any circumstances, in law or equity, for any
loss, damage, liability, or expense incurred or suffered as a result of the use of or
reliance upon the contents of this document. Any reference to specific organisations,
products, services, or data sources does not constitute or imply an endorsement
by NITI Aayog. Readers are encouraged to independently verify the data and
conduct their analysis before forming conclusions or taking any policy, academic,
or commercial decisions. A STUDY REPORT ON
SCENARIOS TOWARDS
VIKSIT BHARAT AND NET ZERO:
AN OVERVIEW
(VOL. 1) Message ixScenarios Towards Viksit Bharat and Net Zero: An Overview
Authors and
Acknowledgement
Chairperson
Sh. B.V.R. Subrahmanyam
CEO, NITI Aayog
Leadership
Sh. Suman Bery
Vice Chairman, NITI Aayog
Dr. V.K. Saraswat
Member, NITI Aayog
Dr. V.K. Paul
Member, NITI Aayog
Dr. Ramesh Chand
Member, NITI Aayog
Dr. Arvind Virmani
Member, NITI Aayog
Sh. B.V.R. Subrahmanyam
CEO, NITI Aayog
Sh. V Anantha Nageswaran
Chief Economic Advisor, Govt. of India
Dr. Anil Jain
Chairperson, PNGRB
Sh. Alok Kumar
Ex-Secretary, MoP
Dr. Anshu Bharadwaj
Programme Director, Green Transition,
Energy & Climate Change Division,
NITI Aayog
Sh. Rajnath Ram
Adviser, Energy, NITI Aayog
Core Modelling Team
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Dr. Anjali Jain
Consultant G-II, NITI Aayog
Sh. Nitin Bajpai
Consultant, NITI Aayog
Authors
Sh. Venugopal Mothkoor
Energy and Climate Modelling Specialist,
NITI Aayog
Dr. Anjali Jain
Consultant G-II, NITI Aayog
Sh. Nitin Bajpai
Consultant, NITI Aayog
Ms. Divya Midha
Consultant, NITI Aayog
Ms. Srishti Dewan
Young Professional, NITI Aayog
Ms. Aastha Singh
Young Professional, NITI Aayog
Peer Reviewers
Sh. V Anantha Nageswaran
Chief Economic Advisor, Govt. of India Scenarios Towards Viksit Bharat and Net Zero: An Overview x
Authors and Acknowledgement
Smt. Chandni Raina
Advisor, Climate Change & Finance Unit,
Department of Economic Affairs
Sh. Sharad Sapra
Scientist- F, MoEF&CC
Ms. Shweta Kumar
Director, MoEF&CC
Ms. Aditi Pathak
Joint Director, Climate Change & Finance
Unit, DEA
Sh. Ajay Raghav
Scientist- E, MoEF&CC
Ms. Ritika Bansal
Deputy Director, Climate Change & Finance
Unit, DEA
Technical Editors
Smt. Rishu Nigam
Communication Specialist (Independent)
Working Group Members
Secretary, Department of Economic Affairs,
Ministry of Finance
Secretary, Ministry of New and Renewable
Energy
Secretary, Ministry of Petroleum and Natural
Gas
Secretary, Ministry of Power
Secretary, Ministry of Coal
Secretary, Ministry of Heavy Industries
Secretary, Ministry of Steel
Secretary, Ministry of Mines
Secretary, Ministry of Micro, Small and
Medium Enterprises
Secretary, Ministry of Environment, Forest
and Climate Change
Secretary, Ministry of Skill Development and
Entrepreneurship
Secretary, Department for Promotion of
Industry and Internal Trade, Ministry of
Commerce and Industry
Secretary, Ministry of Housing and Urban
Affairs
Secretary, Ministry of Agriculture and
Farmers Welfare
Chief Economic Advisor, Ministry of Finance
Communication and Research &
Networking Division, NITI Aayog
Ms. Anna Roy
Programme Director, Research & Networking
Sh. Yugal Kishore Joshi
Lead, Communication
Ms. Keerti Tiwari
Director, Communication
Dr. Banusri Velpandian
Senior Specialist, Research and Networking
Ms. Sonia Sachdeva Sharma
Consultant, Communication
Sh. Sanchit Jindal
Assistant Section Officer, Research and
Networking
Sh. Souvik Chongder
Young Professional, Communication
NITI Design Team
NITI Maps & Charts Team xiScenarios Towards Viksit Bharat and Net Zero: An Overview
Contents
List of Figures xiv
List of Tables xviii
List of Abbreviations xix
Executive Summary xxv
Introduction xxxvii
1. India’s Energy, Economy, and Climate-The Current Landscape...........................................1
1.1 Overview 2
1.2 Economic and Social Context 3
1.3 Energy and Emission Profiles 9
1.4 Policy Developments and Institutional Architecture 15
1.4.1 Policy Evolution 15
1.4.2 Sector-specific Policy Levers 17
2. Integrated Modelling Framework for Net Zero Pathways...................................................23
2.1 Modelling Approach and Tools Used 24
2.2 Designing India’s Pathway to Net Zero Emissions 28
3. Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways..................33
3.1 Harnessing India’s Strategic Endowments 34
3.2 From Aspiration to Action- Translating THE VIKSIT BHARAT VISION into Policy Pathways 35
3.3 Macroeconomic Blueprint: Demography and Economic Transformation 38
3.3.1 Demography: Population and Urbanisation 38
3.3.2 Macroeconomic Growth Trajectory 38
3.4 Sectoral Developmental Choices and Demand Drivers 40
4. India’s Transition Pathways......................................................................................................47
4.1 Final Energy Demand 48
4.2 Primary Energy Supply 50
4.2.1 Fuel Demand 52
4.2.2 Energy-GDP Decoupling 56
4.3 Electricity 58
4.4 Emissions 60
4.4.1 Pillars of Transition 60 Scenarios Towards Viksit Bharat and Net Zero: An Overview xii
Contents
5. Sectoral Transition Pathways...................................................................................................65
5.1 Power Sector 66
5.1.1 Installed Capacity 66
5.1.2 Electricity Generation 69
5.1.3 Per-capita Electricity Consumption 71
5.1.4 Challenges and Suggestions 72
5.2 Transport 78
5.2.1 Modal Shift 78
5.2.2 Transport Sector Electrification 80
5.2.3 Final Energy Consumption 80
5.2.4 Challenges and Suggestions 82
5.3 Industry 86
5.3.1 Industrial Production and Energy Demand 86
5.3.2 Challenges and Suggestions 89
5.4 Buildings 93
5.4.1 Commercial Buildings 93
5.4.2 Residential Buildings 94
5.4.3 Cooking Sector 95
5.4.4 Emerging Load: Data Centre Facilities 97
5.4.5 Challenges and Suggestions 97
5.5 Agriculture 101
5.5.1 Agriculture Non-Energy Services 101
5.5.2 Agriculture Energy Use 102
5.5.3 Challenges and Suggestions 105
5.6 Waste 108
5.6.1 Waste Generation and Emissions 108
5.6.2 Challenges and Suggestions 110
6. Financing Net Zero Pathways for India..................................................................................113
6.1 Background 114
6.2 Results 115
6.2.1 Investment Requirement for Net Zero 115
6.2.2 Availability of Investments 118
6.2.3 Assessing India’s Net Zero Financing Gap 120
6.2.4 Challenges and Suggestions 123
7. Macroeconomic Implications of Net Zero Transition.........................................................129
7.1 Background 130
7.2 Results 131
7.2.1 Impact on GDP 131
7.2.2 Impact on GDP components 132
7.2.3 Impact on Sectoral output and shares 135 Scenarios Towards Viksit Bharat and Net Zero: An Overview xiii
Contents
7.2.4 Impact on Investment 137
7.2.5 Impact on Electricity Price Trajectory 138
7.2.6 Impact on Government Revenue and Import Bill 138
7.2.7 Impact on Household Income and Consumption 140
7.2.8 Impact on the Labour Market 141
7.3 Challenges and Suggestions 143
8. Critical Minerals and Supply Chains......................................................................................149
8.1 Cumulative Domestic Demand for Critical Energy Transition Minerals (CETMs) 151
8.2 Supply Assessment of CETMs 155
8.3 Ecosystem Requirements for Circular Economy Solutions 159
8.4 R&D Requirements for Critical Mineral Processing and Recycling 162
8.5 Challenges and suggestions 164
9. Social implications of energy transition...............................................................................167
9.1 Land and Water Requirements 168
9.2 Employment and Migration: A Workforce in Flux 172
9.3 Health: Vulnerabilities, Regional Patterns, and Transition 175
9.4 Behaviour: Patterns, Barriers, and Opportunities for Change 178
10. Enabling the Net Zero Transition: Challenges and Opportunities..................................183
10.1 Reframing Development for Sustainable Growth: Leveraging India’s Civilisational
Ethos and Mission LiFE 186
10.2 Financing India’s Net Zero Transition: Mobilising Capital through Systemic
Financial Reform 188
10.3 Domestic Manufacturing and Supply-Chain Resilience in India’s Net Zero Transition 189
10.4 Building a Coherent and Trusted Energy Data Architecture 191
10.5 Innovation and Research & Development: Building India’s Low-Carbon
Technology Frontier 192
10.6 Governance, Regulation and Institutions: Aligning accountability 193
10.7 Mapping Vulnerability, Costing Resilience 195
References..........................................................................................................................................199 xivScenarios Towards Viksit Bharat and Net Zero: An Overview
List of Figures
Figure 1.1Real GDP growth rate of select countries (2015 – 2024)4
Figure 1.2Nominal GDP of select countries in USD Trillions (2000 – 2024)5
Figure 1.3Comparative share of primary energy mix of select countries between 2015
and 2024(BP, 2016; Energy Institute KPMG, & Kearney, 2025)
10
Figure 1.4Per-capita GHG emissions of select countries in 2023 (tonnes per capita) 12
Figure 1.5India’s GHG emissions trend for 2000 to 2020 12
Figure 1.6India’s final energy demand and sectoral share for 2014 and 2024 (Million
tons oil equivalent, Mtoe)
13
Figure 1.7HDI Correlation with per-capita energy use15
Figure 1.8Phases of policy evolution16
Figure 1.9Power sector policies and initiatives18
Figure 1.10Transport sector policies and initiatives19
Figure 1.11Industry sector policies and initiatives20
Figure 1.12Buildings sector policies and initiatives21
Figure 1.13Agriculture sector policies and initiatives22
Figure 2.1Modelling framework for transition pathways25
Figure 2.2Energy model structure (demand-supply balance)27
Figure 3.1Real GDP from 2026 till 2070 (estimated using long term growth model
tool) (up), structure of gdp (down)
40
Figure 3.2Floor Space Projections for residential and commercial buildings (2020-
2070)
41
Figure 3.3Person cooling degree days vs ownership of air conditioners for select
countries
42
Figure 3.4Per-capita commodity demand vs per-capita GDP43
Figure 3.5Projected industrial demand of select commodities- steel, cement,
aluminium (million tonnes) by 2047 & 2070
44
Figure 3.6Transport demand (Passenger kilometre per capita v/s GDP per capita), and
(Tonnes kilometre per capita v/s GDP per capita)
45
Figure 4.1Final Energy Demand Projections, Mtoe49
Figure 4.2Electricity’s share of final energy demand (in %) under Current Policy
Scenario (CPS) and Net Zero Scenario (NZS)
50 Scenarios Towards Viksit Bharat and Net Zero: An Overview xv
List of Figures
Figure 4.3Primary energy supply projections under Current Policy Scenario (CPS) and
Net Zero Scenario (NZS) for 2050 and 2070, Mtoe
51
Figure 4.4Projected coal demand under Current Policy Scenario (CPS) and Net
ZeroScenario (NZS) for 2050 and 2070, Million tonnes
52
Figure 4.5Projected Oil demand under Current Policy Scenario (CPS) and Net
ZeroScenario (NZS) for 2050 and 2070, Million tonnes
53
Figure 4.6Projected natural gas demand under Current Policy Scenario (CPS) and Net
Zero Scenario (NZS) for 2050 and 2070, Billion Metric Standard Cubic Metre
(BMSCM)
54
Figure 4.7Projected green hydrogen demand for various end-use sectors under
Current Policy Scenario (CPS) and Net Zero Scenario (NZS) for 2050 and
2070, Million tonnes
55
Figure 4.8Projected demand of select biofuels (Sustainable Aviation Fuel (SAF), and
Ethanol) under Current Policy Scenario (CPS) and Net Zero Scenario (NZS)
for 2050 and 2070
55
Figure 4.9Historical trends of energy and GDP decoupling for select countries and
comparison with India’s projections for period 2025-2050 under CPS and
NZS
57
Figure 4.10Projections of India’s energy intensity to GDP (Mega Joules per INR) (left)
and per-capita primary energy (Mega Joules per person) (right)
58
Figure 4.11Projections of electricity consumption (TWh) under Current Policy Scenario
(CPS) and Net Zero Scenario (NZS) for 2050 and 2070
59
Figure 4.12Key Levers to reduce GHG emissions from Current Policy Scenario toNet
Zero Scenario by 2070
60
Figure 4.13Projection of grid carbon intensity under Current Policy Scenario (CPS) and
Net Zero Scenario (NZS) for 2050 and 2070 (kgCO2/kWh)
61
Figure 4.14Net Zero Scenario share of scrap in steel and aluminium, and clinker to
cement ratio in cement production projections
62
Figure 4.15Projections of Residual emissions in Net Zero in 207063
Figure 5.1Projected electricity generation capacity for 2050 and 2070 in Current
Policy Scenario (CPS)
67
Figure 5.2Projected electricity generation capacity for 2050 and 2070 in Net Zero
Scenario (NZS)67
Figure 5.3Projected electricity generation mix for 2050 and 2070 in Current Policy
Scenario (CPS) using NITI (TIMES model) and CEA (ORDENA model)70
Figure 5.4Projected electricity generation mix for 2050 and 2070 in Net Zero Scenario
(NZS) using NITI (TIMES model) and CEA (ORDENA model)70
Figure 5.5Per-capita electricity consumption in different scenarios72
Figure 5.6Projections of modal share in transport-passenger and freight under Current
Policy Scenario (CPS) and Net Zero Scenario (NZS) for 2050 and 2070
79 Scenarios Towards Viksit Bharat and Net Zero: An Overview xvi
List of Figures
Figure 5.7Fuel consumption in transport sector for 2050 and 2070 under Current
Policy Scenario (CPS) and Net Zero Scenario (NZS), Million tonne of oil
equivalent (Mtoe)
80
Figure 5.8Drivers of lower energy use in Net Zero Scenario (NZS) by 207081
Figure 5.9Projected growth in industrial production for 2050 and 2070, in multiple of
2020 values
86
Figure 5.10Projected energy consumption in industry sector for 2050 and 2070 under
Current Policy Scenario (CPS) and Net Zero Scenario (NZS)
87
Figure 5.11Projected electricity consumption in commercial building sector by 2050
and 2070 under Current Policy Scenario (CPS) and Net Zero Scenario (NZS),
Terawatt-hour (TWh)
94
Figure 5.12Projected electricity consumption in residential building sector by 2050 and
2070 under Current Policy Scenario (CPS) and Net Zero Scenario (NZS),
Terawatt-hour (TWh)
94
Figure 5.13Projected fuel consumption in cooking sector by 2050 and 2070 under
Current Policy Scenario (CPS) and Net Zero Scenario (NZS)
96
Figure 5.14Projected electricity consumption in data centres, Terawatt-hour (TWh) 97
Figure 5.15Non-Energy emissions from agriculture sector under Current Policy Scenario
(CPS) and Net Zero Scenario (NZS) by 2050 and 2070 (Million Ton CO2e)
102
Figure 5.16Energy demand and fuel mix in agriculture pumping under Current Policy
Scenario (CPS) and Net Zero Scenario (NZS) by 2050 and 2070
103
Figure 5.17Energy demand and fuel mix in agriculture land preparation under Current
Policy Scenario (CPS) and Net Zero Scenario (NZS) by 2050 and 2070
104
Figures 5.18a
& 5.18b
Wastewater generation (domestic and industry) projections in India,
projected solid waste generation in India
109
Figure 5.19Projected emissions from waste sector by 2050 and 2070 under Current
Policy Scenario (CPS) and Net Zero Scenario (NZS)
110
Figure 6.1Estimates on cumulative investment requirements for Net Zero across
various studies
116
Figure 6.2Sector-wise estimates of cumulative and incremental
investmentrequirements for Net Zero by 2070
116
Figure 6.3(A) Total cumulative investment required (2025-2050) (B) Total cumulative
investment required (2025-2070)
117
Figure 6.4Projections of the sources and end use of finance supplyfor Net Zero (2026-
70, USD billion)
119
Figure 6.5Projections of total needs, availability and gap (USD trillion)121
Figure 6.6Power sector: Projections of total needs, availability and gap (USD trillion)121
Figure 6.7Transport sector: Projections of total needs, availability and gap (USD
trillion)
122
Figure 6.8Industrial sector:
Projections of total needs, availability and gap (USD trillion)123 Scenarios Towards Viksit Bharat and Net Zero: An Overview xvii
List of Figures
Figure 7.1(A) Real GDP levels (trillion INR) (MANAGE model) (B) Net Zero Scenario
GDP outcomes across financing channels (deviation from the CPS in %)
(MANAGE model)
132
Figure 7.2(A) GDP components (at constant 2012 prices) in the Current Policy
Scenario (MANAGE). (B) GDP components (% deviation from CPS)
(MANAGE) (C) Exports and imports as a percentage of GDP (MANAGE
model) (D) Current account balance (% of GDP, MANAGE model)
135
Figure 7.3(A) GVA sectoral composition in Current Policy Scenario (CPS) (constant
2012 prices, MANAGE model) (B) Sectoral value added (% deviation from
CPS, MANAGE model)
136
Figure 7.4(A) Sectoral investment in Current Policy Scenario (B, C) Net Zero Scenario
investment (%deviation from CPS) (MANAGE)
137
Figure 7.5Electricity price trajectories under Current Policy Scenario (CPS) and Net
Zero Scenario (NZS)
138
Figure 7.6(A) Projected total fossil fuel revenue (as % of GDP) (B) Projected fuel
import bill (as % of GDP) (C) Savings in import bill in Net Zero Scenario
compared to Current Policy Scenario as a % of GDP (D) Commodity-wise
change in imports in Net Zero Scenario compared to Current Policy Scenario
(CPS) in years 2050 and 2070 (Billion 2011 INR)
140
Figure 7.7Impact of the Net Zero transition on real household consumption(%
deviation from CPS, MANAGE model)
141
Figure 7.8(A) Current Policy Scenario employment rate (MANAGE model) (B) Net
Zero Scenario employment rate (% deviation from CPS (MANAGE model))
(C) Real wages in Net Zero Scenario (% deviation from CPS) (MANAGE
model).
143
Figure 8.1aCumulative mineral demand in Current Policy Scenario (CPS) & Net Zero
Scenario (NZS)
152
Figure 8.1bCumulative mineral demand in Current Policy Scenario (CPS) & Net Zero
Scenario (NZS)153
Figure 8.2India’s CETM demand as share of global demand in the Net Zero Scenario 155
Figure 8.3India’s import dependency of key minerals vs. geopolitical risk158
Figure 8.4Cumulative CRM recoveries from e-waste between 2025 and 2047 in
Current Policy Scenario
160
Figure 8.5Cumulative CETM recoveries from e-waste between 2025 and 2047 in
baseline scenario
161
Figure 9.1Land requirement (Mha) and water requirement (BCM) across Current Policy
Scenario and Net Zero Scenario till 2070
170
Figure 9.2Districts dependent on fossil-based economy173
Figure 10.1Delivery architecture for Net Zero197 xviiiScenarios Towards Viksit Bharat and Net Zero: An Overview
List of Tables
Table E1: Select Indicators of Developmentxxvi
Table E2: Summary of Energy Indicatorsxxviii
Table E3: Power Sector Summary of Resultsxxviii
Table 1.1:Comparative socio-economic indicators — India vs. country income groups
(2022–24)
8
Table 1.2:Current status of electricity capacity and generation in India (2025) (BU)
(2024-25) (utility-based)
11
Table 5.1:Capacity mix across two models in Current Policy Scenario (CPS) and Net
Zero Scenario (NZS)
68
Table 5.2:Generation mix across two models in Current Policy Scenario (CPS) andNet
Zero Scenario (NZS)
71
Table 7.1:Summary of Net Zero Scenarios using World Bank and NCAER models131
Table 8.1:Demand for Critical Energy Transition Minerals at different time horizons 154
Table 8.2:Comparison of CETM demand with resources, reservesand import
dependence
156
Table 8.3:Major copper smelting and refining capacities in India157
Table 8.4:Domestic process maturity in primary and secondary processing, and
strategic actions required
162 xixScenarios Towards Viksit Bharat and Net Zero: An Overview
ACAir Conditioning
ADEETIE Assistance in Deploying Energy Efficient Technologies in Industries and
Establishments
AELAlkaline Electrolyser
AMBER Accelerated Mission for Better Employment and Retention
AIPA Committee for Implementation of the Paris Agreement
ASSET Accelerating Sustainable State Energy Transition
ATFAviation Turbine Fuel
AVISTEP Avian Sensitivity Tool for Energy Planning
AWDAlternate Wetting and Drying
BCSS Battery Charging cum Swapping Stations
BEEBureau of Energy Efficiency
BEMS Building Energy Management Systems
BESS Battery Energy Storage Systems
BISBureau of Indian Standards
BMSCM Billion Standard Cubic Meters
BPKM Billion Passenger-Kilometres
BPKP Bharatiya Prakritik Krishi Paddhati
BRSR Business Responsibility and Sustainability Reporting
BSBharat Stage (emission standards)
BTKM Billion Tonne-Kilometres
BTRBiennial Transparency Report
BURBiennial Update Report
CADCurrent Account Deficit
CBAM Carbon Border Adjustment Mechanism
CBDR Common But Differentiated Responsibilities
CBGCompressed Biogas
CCSCarbon Capture and Storage
CCTS Carbon Credit Trading Scheme
CCUS Carbon Capture, Utilisation, and Storage
CDRI Coalition for Disaster Resilient Infrastructure
CEACentral Electricity Authority
List of Abbreviations Scenarios Towards Viksit Bharat and Net Zero: An Overview xx
List of Tables
CEEW Council on Energy, Environment and Water
CETM Critical Energy Transition Minerals
CGEComputable General Equilibrium
CH₄Methane
CLEW Climate-Land-Energy-Water
COPD Chronic Obstructive Pulmonary Disease
CPSCurrent Policy Scenario
CRIRSCO Committee for Mineral Reserves International Reporting Standards
CRMCritical Raw Materials
CSPConcentrated Solar Power
CSSCentrally Sponsored Scheme
Co-WIN Covid Vaccine Intelligent Network
DACDirect Air Capture
DEADepartment of Economic Affairs
DISCOM Distribution Company
DLEDirect Lithium Extraction
DMFDistrict Mineral Foundation
DPIDigital Public Infrastructure
DREDecentralised Renewable Energy
DRIDirect Reduced Iron
DSRDirect-Seeded Rice
ECBC Energy Conservation Building Code
ECSBC Energy Conservation and Sustainable Building Code
EJExajoule
ELVEnd-of-Life Vehicle
ENSEco-Niwas Samhita
EPCEngineering, Procurement, and Construction
EPIEnergy Performance Index
EPRExtended Producer Responsibility
ERCEvacuation-Ready Certificate
EUDR EU Deforestation Regulation
FARFloor Area Ratio
FDRE Firm Dispatchable Renewable Energy
FOAK First-of-a-Kind
FODFirst Order Decay
FPIForeign Portfolio Investment
FSDC Financial Stability and Development Council
GCAGross Cropped Area
GERGross Enrolment Ratio
GH₂Green Hydrogen
GHGGreenhouse Gas
GIFT Gujarat International Finance Tec-City Scenarios Towards Viksit Bharat and Net Zero: An Overview xxi
List of Tables
GJGigajoule
GPPGreen Public Procurement
GSTGoods and Services Tax
GVAGross Value Added
GWPGlobal Warming Potential
HCIHuman Capital Index
HDIHuman Development Index
HICHigh-Income Countries
HSHarmonised System (commodity codes)
IBAT Integrated Biodiversity Assessment Tool
IBCInsolvency and Bankruptcy Code
ICAP India Cooling Action Plan
ICED India Climate and Energy Dashboard
ICLEI Local Governments for Sustainability
IDSP Integrated Disease Surveillance Programme
IEAInternational Energy Agency
IFSCA International Financial Services Centres Authority
ILOInternational Labour Organization
IMRInfant Mortality Rate
IPHS Indian Public Health Standards
IPPU Industrial Processes and Product Use
ISAInternational Solar Alliance
KABIL Khanij Bidesh India Limited
LC3Limestone Calcined Clay Cement
LCALife Cycle Assessment
LCDC Low Carbon Development Commission
LENLivelihoods, Environment, Nutrition
LGTM Long-Term Growth Model (duplicate of LTGM)
LTGM Long-Term Growth Model
MANAGE Macroeconomic Net Zero Analysis & Growth Evaluation (economic
model)
MBBL Model Building Bye-Laws
MEPS Minimum Energy Performance Standards
MoEFCC Ministry of Environment, Forest and Climate Change
MoHUA Ministry of Housing and Urban Affairs
MoPNG Ministry of Petroleum and Natural Gas
MRVMonitoring, Reporting and Verification
MSPMinerals Security Partnership
MSWMunicipal Solid Waste
NAPCC National Action Plan on Climate Change
NBCNational Building Code
NCAER National Council of Applied Economic Research Scenarios Towards Viksit Bharat and Net Zero: An Overview xxii
List of Tables
NCAP National Clean Air Programme
NDCNationally Determined Contribution
NEPNational Education Policy
NFSA National Food Security Act
NGFI National Green Finance Institution
NHMNational Health Mission
NIPNational Infrastructure Pipeline
NMEEE National Mission for Enhanced Energy Efficiency
NMET National Mineral Exploration Trust
NMMNational Manufacturing Mission
NMNF National Mission on Natural Farming
NMPNational Monetisation Pipeline
NMTNon-Motorised Transport
NPCCHH National Programme on Climate Change and Human Health
NUENitrogen Use Efficiency
NZSNet Zero Scenario
N₂ONitrous Oxide
OOPE Out-of-Pocket Expenditure
ORDENA (CEA’s power capacity expansion model)
OSHWC Occupational Safety, Health and Working Conditions (Code)
PATPerform, Achieve and Trade
PDSPublic Distribution System
PESA Panchayats (Extension to the Scheduled Areas) Act
PFCPerfluorocarbon
PKMPassenger Kilometre
PKVY Paramparagat Krishi Vikas Yojana
PLIProduction-Linked Incentive
PMCCC Prime Minister’s Council on Climate Change
PMDDKY Pradhan Mantri DhanDhaanya Krishi Yojana
PMKVY Pradhan Mantri Kaushal Vikas Yojana
PMUY Pradhan Mantri Ujjwala Yojana
PNGPiped Natural Gas
PUEPower Usage Effectiveness
PVPhotovoltaic
RACRoom Air Conditioner
RERenewable Energy
REERare Earth Elements
RFCTLARR Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act
RKVY Rashtriya Krishi Vikas Yojana
RRTS Regional Rapid Transit System
SAFSustainable Aviation Fuel Scenarios Towards Viksit Bharat and Net Zero: An Overview xxiii
List of Tables
SAPCC State Action Plan on Climate Change
SAPCCHH State Action Plan on Climate Change and Human Health
SATAT Sustainable Alternative Towards Affordable Transportation
SECSpecific Energy Consumption
SHANTI Sustainable Harnessing of Nuclear Energy for Transforming India Act
SIPS System Integrity Protection Schemes
SLRStatutory Liquidity Ratio
SRISystem of Rice Intensification
STEM Science, Technology, Engineering and Mathematics
TAFTechnology Assessment Framework
TBTuberculosis
TCOTotal Cost of Ownership
TEETechnical, Economic and Environmental
TFPTotal Factor Productivity
TKMTonne Kilometre
TODTransit-Oriented Development
TPES Total Primary Energy Supply
UEIUnified Energy Interface
ULBUrban Local Body
UMIC Upper Middle-Income Countries
UNDP United Nations Development Programme
UNFCCC United Nations Framework Convention on Climate Change
UPIUnified Payments Interface
UJALA Unnat Jyoti by Affordable LEDs for All
VREVariable Renewable Energy
WACC Weighted Average Cost of Capital
ZEVZero-Emission Vehicle
CPCB Central Pollution Control Board
SPCB State Pollution Control Board
ONDC Open Network for Digital Commerce
OCEN Open Credit Enablement Network xxvScenarios Towards Viksit Bharat and Net Zero: An Overview
Executive Summary
India is at the cusp of an unprecedented opportunity in its economic history. It is benefitting
from a youthful population with a median age of 28 giving a demographic dividend which will
last for the next quarter century. At the same time, its growth is being boosted by the strong
momentum of fast rising economic indicators such as savings, investments, and expectations. In
this context, the Hon’ble Prime Minister has set an ambitious goal of making India Viksit Bharat,
a developed nation by 2047.
This developmental journey has no historical precedent. The comprehensive development
agenda under Viksit Bharat, which envisions increasing GDP to USD 30 trillion by 2047 involves
building the infrastructure, services, and opportunities needed for a better quality of life for
all. At the same time, India has committed to achieving Net Zero greenhouse gas emissions
by 2070. Pursuing these goals together represents an unprecedented experiment: no major
economy has attempted to scale its GDP nearly eightfold within a single generation while
simultaneously redirecting its energy system, industrial structure, and resource use toward a
low-carbon pathway. The central challenge is to achieve both objectives in a balanced manner.
This is further complicated by the fact that many of the technologies needed for Net Zero,
such as carbon capture, utilisation and storage (CCUS), long-duration energy storage, and small
modular nuclear reactors, remain nascent, and unproven at scale. The aspiration to become a
developed nation is unfolding at a time when climate change impacts are becoming increasingly
ubiquitous, with the burden felt most acutely by marginalised communities. Adaptation is
therefore critical and, as the Economic Survey 2025–26 notes, “development is, in itself, a form
of adaptation”
In this context, in order to facilitate coordinated policymaking and planning, NITI Aayog
constituted ten Inter-Ministerial Working Groups to develop an integrated assessment of how
India can achieve the vision of Viksit Bharat 2047 while simultaneously reducing the net green-
house gas (GHG) emissions to zero by 2070. These working groups examined various facets
of the transition spanning sectoral aspects in transport, industry, buildings, agriculture, waste,
and power, as well as cross-cutting themes of critical minerals, climate finance, social aspects
and macroeconomic implications. Each working group brought together policymakers, domain
experts and industry stakeholders and validated multiple inputs and outputs of this endeavour.
India’s low-emission development strategies continue to be guided by the foundational principles
of the United Nations Framework Convention on Climate Change (UNFCCC) – equity, climate
justice and the principle of common but differentiated responsibilities and respective capabilities.
This overarching framework for India’s Net Zero transition, as reiterated in the Long-term Low
Emission Development Strategy (LT-LEDS) submitted by India to the UNFCCC in November
2022, forms the basis of this report. Scenarios Towards Viksit Bharat and Net Zero: An Overview xxvi
Executive Summary
NITI Aayog’s A Study Report on Scenarios Towards Viksit Bharat and Net Zero: An Overview is an
independent analytical exercise based on modelled scenarios that are indicative, not predictive
or prescriptive. Results rely on assumptions and are subject to uncertainties, including future
policy choices, technology evolution, finance availability, and global economic and geopolitical
conditions. Accordingly, the report should be read as an input for research and policy dialogue,
and not as an official policy position or a definitive pathway.
The consolidated report integrates the findings from these working groups into a coherent
national roadmap. It is designed as a living document to be updated every few years as
technologies advance, cost curves change and global dynamics evolve. This is to ensure that
India’s pathways remain relevant, responsive and anchored in the realities of technological and
economic transformation.
A central component of this effort is the modelling framework, which integrates multiple sectoral
models into a unified system linking India’s developmental goals and Net Zero pathways. Two
scenarios inform the analysis.
i. Current Policy Scenario (CPS): The Current Policy Scenario represents a level of effort
that is realistically achievable based on historical trends and continuation of current
policies (as of 2023), thereby projecting ongoing trends in low-carbon technology
deployment.
ii. Net Zero scenario (NZS): The Net Zero Scenario reflects an ambitious pathway aligned
with India’s commitment to achieve Net Zero GHG emissions by 2070. It incorporates
both existing and additional policy measures to accelerate demand electrification,
enhance circularity, improve energy efficiency, promote the rapid development of low-
carbon technologies/fuels and encourage behavioural shifts.
Viksit Bharat 2047: India’s Development Foundation for a Net Zero Future
The Hon’ble Prime Minister’s Viksit Bharat vision is anchored in a significant expansion of
the economy. GDP is expected to rise from USD 4.18 trillion (2025) to USD 30 trillion (2047),
accompanied by a sustained acceleration in industrial output, services growth, and infrastructure
investment. India’s urban population is expected to rise from 37% in 2023 to 51% by 2047 and
65% by 2070, implying substantial expansion of existing cities and the emergence of new
urban centres. Rising incomes and urbanisation will increase per-capita energy demand through
higher mobility requirements, widespread appliance use, cooling needs, and the growth of
commercial services (Table E1 below). At the same time, it creates opportunities for compact
design, mass transit, and efficient buildings that reduce long-term energy intensity.
Table E1: Select Indicators of Development
2023 20472070
Urbanisation
37%51%65%
?????? Buildings Floor Space (Billion m²) 183742
?????? Number of Cars (per 1,000 people) 32 130-170 200-250
❄ AC Penetration10%65%80% Scenarios Towards Viksit Bharat and Net Zero: An Overview xxvii
Executive Summary
?????? Transport – Passenger (BPKMS)5,693 16,450-18,000 19,400-22,600
?????? Transport – Freight (BTKM)4,143 10,000-12,700 13,000-16,200
?????? Industrial Production – Steel (Mt) 127568821
Industrial Production – Cement (Mt) 3911,4711,985
?????? Farm Mechanisation47%100%100%
The sectoral development choices for meeting the surge in demand involve trade-offs. For
example, a greater thrust towards the use of Transit-Oriented Development (TOD) principles
in urban planning will lead to reduced overall travel demand. Similarly, the emphasis on reuse
and recycling will result in lower demand for virgin industrial inputs. These developmental
choices, embedded in the sectoral transition plans, are not constraints on growth but enablers
of sustainable prosperity.
Pathways to Net Zero: Energy Mix and Emissions
Energy Demand: India’s final energy demand is projected to increase from 688 Mtoe (2025)
to 1381-1617 Mtoe by 2050 and 1465-1811 Mtoe by 2070. This moderate increase of 2.1-2.6 times
by 2070 over 2025 levels, not withstanding an 11-fold increase in GDP, is driven by reduced
energy intensity. Final energy demand in the Net Zero Scenario at 1465 Mtoe is 20% lower than
Current Policy Scenario energy demand of 1811 Mtoe in 2070, driven by higher electrification,
circularity, energy efficiency, and saturation of sectoral activity. This decoupling of energy-GDP
is consistent with global experience.
Industrial share in the final energy demand is projected to increase from 54% in 2025 to 60-
64% by 2050 and 63-67% by 2070, as the demand for commodities such as steel, cement,
aluminium, etc., increases with rising per-capita income as India converges toward global
per-capita consumption norms. Beyond 2050, India enters a post-infrastructure phase of
development. Per-capita demand for industrial commodities and transport begins to saturate.
Growth beyond 2050 shifts from infrastructure build-out to services, digital infrastructure, and
lifestyle diversification.
Primary Energy Mix: India’s primary energy supply increase by 2.0-2.3 times by 2050 and 2.1-
2.5 times by 2070 over 2025 levels, reflecting the decoupling of energy and GDP, i.e. Energy
Intensity to GDP falls from 0.22 MJ/INR in 2025 to 0.09-0.1 MJ/INR by 2050 and 0.04-0.05 MJ/
INR by 2070. Also, India will be able to achieve high Human Development Index (HDI) levels
of 0.8 and above with 55-60 GJ per-capita consumption, while other developed economies
report per-capita consumption at 100 GJ and above. However, there are important changes in
the energy mix. The primary energy mix changes from fossil-fuel dominant at 87% in 2025 to
a reduced use, even in the Current Policy Scenario, where fossil fuels account for 54% by 2070.
In the Net Zero Scenario, their share is projected to reduce to 14%, and this remaining fossil
capacity that exists largely leverages carbon capture solutions to mitigate emissions. Scenarios Towards Viksit Bharat and Net Zero: An Overview xxviii
Executive Summary
Table E2: Summary of Energy Indicators
Indicator2025
Current Policy
Scenario
Net Zero
Scenario
2050 2070 2050 2070
Final Energy Demand (Mtoe)688 1620 1810 1380 1465
Primary Energy Supply (Mtoe)1006 2286 2492 2058 2159
Demand Electrification21% 32% 40% 42% 60%
Per-capita Primary Energy (GJ/capita)30 60 64 54 56
Demand Electrification: Electricity’s share of final energy is projected to rise from about 21%
in 2025 to 40% in Current Policy Scenario and 60% in Net Zero Scenario by 2070. This is on
account of higher EV penetration in transport, greater use of electricity-based heat in industry
through the adoption of heat pumps, electric boilers, etc. and increased use of electricity in
cooking. Renewables form the backbone of this transition, projected to rise from 3% share in
2025 to 63% by 2070 under the Net Zero Scenario, driven by sustained decline in technology
costs and enhanced role of storage.
Bioenergy transitions from traditional household use to modern applications in fuels and industry,
while natural gas acts as a bridge fuel, with its infrastructure capable of being repurposed to
support Compressed Bio-Gas (CBG) and Green Hydrogen (GH₂).
India’s transformation of its energy mix is not only critical for achieving Net Zero emissions but
also delivers significant economic and geopolitical benefits. Reduced dependence on imported
oil (89% in 2024) and gas (47% in 2024), along with lower exposure to fossil fuel price volatility,
strengthens the country’s energy security and enhances its long-term strategic autonomy.
Electricity: With the greater emphasis on use of electricity across various sectors – industry,
transport, cooking etc., electricity demand is projected to increase by 4-5 times by 2050 and
6-8 times by 2070 over 2025 levels. India’s per-capita electricity consumption is projected to
increase from 1400 kWh in 2025 to 7,000 kWh-10,000 kWh by 2070, reflecting levels seen in
advanced economies such as France, and South Korea.
India’s power system undergoes a decisive shift towards clean power. Variable Renewable
Energy (VRE) capacity, Solar and Wind, is expected to increase from 164 GW in 2025 to over
3000 GW in 2050 and over 6000 GW in 2070 in Net Zero Scenario as compared to ~2000
GW (2050) and over 4000 GW (2070) in Current Policy Scenario. These large-scale capacity
additions in VRE in both scenarios are primarily driven by commercial considerations and the
enhanced role of storage. Further, nuclear energy emerges as a strategic pillar, scaling up from
~8 GW in 2025 to over 300 GW by 2070, providing firm, low-carbon power and enhancing
system reliability.
Table E3: Power Sector Summary of Results
Indicator2024
Current Policy
Scenario
Net Zero Scenario
2050 2070 2050 2070
Electricity Consumption (TWh) 1541 6500 9800 8100 13000 Scenarios Towards Viksit Bharat and Net Zero: An Overview xxix
Executive Summary
Per-Capita Electricity (kWh/ capita) 1400
4600-
4800
6900-
7400
5100-
5200
9900-
9910
Non-Fossil Electricity in Generation (%) 23% 66% 91% 78% 0%
Nuclear Capacity (GW) 8 50-60 90-130 95-105290-320
Renewables Capacity (GW) 136
1890-
2200
4150-
4200
3150-
3200
6150-
6700
Grid Emission Factor (kgCO
2
/kWh)0.72 0.3 0.23 0.07 0
Non-fossil fuel power generation (including captive) share is expected to increase from 23% in
2025 to 65% in Current Policy Scenario and 80% in Net Zero Scenario by 2050. It is further
expected to rise above 80% by 2070 in Current Policy Scenario, and to 100% in the Net Zero
Scenario. As a result of these systemic shifts, the grid emission factor declines from 0.72 kgCO
2
/
kWh in 2025 to 0-0.23 kgCO
2
/kWh by 2070.
Emissions Trajectory: India’s GHG emissions grow from a low base of 2.6 GtCO₂ in 2019 as
the country embarks on a mission to become a developed economy by 2047. However, with
declining energy intensity to GDP from 0.22 MJ/INR in 2025 to 0.09 MJ/INR by 2050 and 0.04
MJ/INR by 2070 in the Net Zero Scenario, the impact on emissions is not proportional. The
projected decline is driven by improvements in energy efficiency, demand electrification and
technology switch to low-carbon fuels.
However, even with low carbon initiatives across sectors, residual emissions remain in 2070,
particularly in agriculture, industrial process emissions, and niche fossil fuel use such as aviation.
These residual emissions may be addressed through the deployment of carbon capture solutions,
including sink.
Enabling the Net Zero Transition
India’s vision of becoming a developed economy by 2047 and achieving Net Zero emissions
by 2070 requires a delicate balancing act. Many of the technologies needed for Net Zero have
yet to reach commercial maturity, while mature low-carbon technologies often demand large
up-front investments. Moreover, the transition exposes the economy to new vulnerabilities in
the form of critical mineral dependencies, land requirements for deploying renewables, and
an employment shift requiring large-scale skilling and reskilling of labour in emerging clean
industries. The huge scale of finance needed for this transition needs to be mobilised and the
implications for the country’s macroeconomic stability also need examination.
Financing the Transition: Scale, Gaps, and Capital Structure
The study estimates cumulative investment requirements of USD 22.7 trillion by 2070 under
the Net Zero Scenario, with the power sector accounting for over half of total needs, reflecting
its central role in enabling economy-wide electrification and the expansion of low-carbon
generation. On an annualised basis, this cumulative requirement translates into average flows
of approximately USD 500 billion per year, compared with actual annual investment of around
USD 135 billion in 2024, of which only USD 70–80 billion currently supports clean energy.
Of this total, approximately USD 8 trillion must be front-loaded by 2050, including nearly
USD 5 trillion in the power sector, given the capital-intensive nature of most low-carbon Scenarios Towards Viksit Bharat and Net Zero: An Overview xxx
Executive Summary
technologies. While absolute investment estimates vary across studies due to differences in
scope, methodology and time horizon, the sectoral pattern is consistent: the power sector
dominates, followed by transport and industry.
Comparative estimates place total investment requirements at USD 14.7 trillion under the
Current Policy Scenario and USD 22.7 trillion under Net Zero Scenario, implying an incremental
requirement of USD 8.1 trillion to align with Net Zero pathways. This incremental investment
reflects the cost of accelerated low-carbon deployment, supporting policies and system-level
interventions.
With coordinated domestic and external reforms, India could credibly mobilise around USD
16.2 trillion towards its Net Zero transition by 2070 through a structural expansion in the scale,
depth and efficiency of available capital. Domestically, this entails deepening the corporate
bond market, increasing the financialisation of household savings, and enabling institutional
investors to invest in new areas, while safeguarding returns through diversified, high-quality
corporate and green assets. Externally, scaling FDI and FPI, supported by credible transition
roadmaps, a strong pipeline of bankable projects and deeper financial markets, would anchor
sustained foreign capital inflows.
Against the Net Zero Scenario investment requirement of USD 22.7 trillion and estimated
aggregate flows of USD 16.2 trillion, a financing gap of USD 6.53 trillion remains. Given domestic
constraints and the risk of crowding out and higher interest rates, this gap is expected to be
met largely through external sources, raising the share of international sources to 42% of total
capital needs by 2070, rising from 17% in 2022–23. International capital, particularly concessional
finance and grants, will therefore be critical to supporting technologies essential for Net Zero
that are not yet commercially viable.
Macroeconomic Implications of India’s Net Zero Transition
The Net Zero transition has limited impact on long-term GDP growth but demands high
investment. India’s GDP is projected to stay broadly resilient even in Net Zero scenarios,
reaching USD 30 trillion by 2047 which is aligned to the Viksit Bharat goal. While the transition
demands massive capital mobilisation, scenarios with higher share of foreign financing limit
total GDP variations to about 0.5% by 2050. This highlights the importance of the financing
structure: mobilising external capital, such as FDI, prevents pressure on domestic savings and
avoids crowding out private investment.
Growth Structure Shifts from Consumption-Led to Investment-Driven: Private consumption’s
share in GDP is projected to be lower, going from 58% in 2025 to 52% in 2070, while investment
share is projected to rise from 32% in 2025 to around 36% by 2050 before moderating to 34%
by 2070, a trend seen in other developed economies. Domestic financing tightens liquidity and
crowds out consumption, whereas foreign financing sustains both investment and demand,
signalling a long-term structural rebalancing towards capital-intensive growth.
Trade Becomes More Resilient with Lower Fossil Fuel Dependence: Imports and exports are
projected to grow in absolute terms as India moves to high-income status, and remain broadly
stable at 23–25% of GDP by mid-century in the Current Policy Scenario. Differences across Net
Zero pathways are driven largely by financing choices. Domestically financed scenarios show
reduction in potential exports, reflecting higher domestic costs and tighter resource constraints, Scenarios Towards Viksit Bharat and Net Zero: An Overview xxxi
Executive Summary
but these are offset by substantial projected reductions in fossil fuel imports, resulting in lower
overall trade exposure. Scenarios with higher share of foreign financing have far less variations
in exports by supporting higher investment, though they are associated with larger current
account and trade deficits in the medium term due to higher capital inflows. The current account
deficit is projected to widen slightly in the near term, peaking at around 3.0–3.2% of GDP in the
mid-2040s, before improving to about 2.3–2.5% by 2070, signalling a gradual strengthening of
the external balance.
Industry expands, driven by clean energy: The Net Zero transition accelerates structural
change, boosting the projected industry GDP share to 33% by mid-century and stabilising
thereafter, driven by clean energy and manufacturing. Manufacturing remains central as India
scales domestic clean-tech capacity.
Fossil-Fuel Revenue Losses Offset by Import Savings and Green Transition: In the Net Zero
Scenario, fossil-fuel revenues are projected to reduce from 2.3% of GDP in 2022 to 0.5% by
2050 and 0.2% by 2070, while the fuel import bill is expected to drop from 4% of GDP in 2022
to 0.9% by 2050 and 0.2% by 2070. Although critical mineral imports are projected to rise,
total import savings is expected to be INR 9 trillion by 2070 (in 2011-12 prices), strengthening
fiscal and external resilience.
Critical Minerals and Supply Chain Security
The demand for Critical Energy Transition Minerals (CETMs) is estimated based on the
anticipated scale and composition of low-emission technology deployment. It covers a defined
set of technologies central to India’s energy transition, including solar PV and concentrated
solar power, wind turbines, electric vehicles (EVs), battery energy storage systems (BESS), and
hydrogen electrolysers.
Under the Net Zero Scenario, cumulative CETM demand is projected to rise sharply from around
3.5 Mt during 2025–30 to nearly 54 Mt over 2030–50, and above 110 Mt during 2050–70. The
sharp post-2050 increase reflects the accelerated rollout of renewable capacity alongside the
rapid expansion of green hydrogen and energy storage systems. Overall CETM demand through
2070 in the Net Zero Scenario is projected to be around 51% higher than in the Current Policy
Scenario, underscoring the material intensity of an ambitious Net Zero pathway.
EV batteries are projected to dominate total CETM demand, accounting for roughly 55%, followed
by solar technologies at about 30%. Copper and graphite emerge as the most critical minerals,
together comprising nearly two-thirds of cumulative demand by 2070. Copper demand is
driven primarily by solar (around 50%) and EV batteries (about 30%), while graphite demand is
overwhelmingly concentrated in EV batteries (over 90%). Silicon demand rises to approximately
19 Mt, largely for solar applications.
Although rare earth elements such as neodymium and dysprosium represent a smaller share
of total volumes, they remain strategically critical due to their essential role in EV motors and
permanent magnets. This surge in demand poses material risks to domestic energy security,
particularly given the high concentration of global supply chains.
While copper and graphite benefit from notable domestic resources with moderate import
dependence, India remains almost fully reliant on imported polysilicon despite low overall silicon Scenarios Towards Viksit Bharat and Net Zero: An Overview xxxii
Executive Summary
import dependence, pointing to gaps in processing and refining capacity rather than geological
scarcity. In contrast, minerals such as lithium, nickel, cobalt and rare earth elements face near-
total import dependence due to the absence of domestic reserves. This supply-demand profile
highlights the urgency of strengthening India’s CETM ecosystem through enhanced exploration,
faster reserve certification, expansion of domestic processing infrastructure, diversified
international sourcing partnerships, and the scaling of circular economy pathways.
Circularity assessments indicate that by mid-century, 20–25% of copper and graphite demand
could be met through recycling, while silicon remains below 10% due to technical barriers. In
comparison, cobalt (approaching 100% circularity by 2040–45) and nickel (up to 45%) exhibit
significantly higher recycling potential, reinforcing that economic value and recoverability are
critical drivers of circularity in CETMs.
Social, Spatial, and Behavioural Dimensions of the Transition
India’s energy transition is a socio-economic transformation as much as a technological
one, with deep implications for land, water, livelihoods, and equity. Achieving the goals of
becoming a developed economy by 2047 and Net Zero by 2070 requires balancing mitigation
with adaptation and resilience under acute resource constraints. Although aggregate land
requirements for the power sector under Net Zero appear modest relative to estimated
wastelands (about 11%), this requirement masks intense competition over land for agriculture,
housing, industry, and ecosystems, especially in densely populated and ecologically fragile
regions.
Renewable expansion is intensifying these pressures unevenly. Balance has to be struck between
productive agricultural land, ecologically sensitive areas, and “wastelands” while meeting the
land needs of solar and wind projects. These impacts are spatially concentrated: nearly 75%
of renewable capacity is clustered in a few water-stressed states creating distributional risks.
Labour impacts further underscore the need for an inclusive transition. While the Net Zero
pathway is projected to generate more employment than the Current Policy Scenario, with
energy-sector jobs projected to rise by about 7 million by 2050 (1 million additional jobs vs
Current Policy Scenario) and driving large gains in construction, transport, and trade, these
benefits are not spatially neutral. Fossil-fuel linked manufacturing employs nearly 17 million
workers and faces gradual but profound restructuring pressures, with over 150 districts
dependent on coal, thermal power and fossil assets. Targeted reskilling, social protection,
and regional diversification are critical to ensure that the transition has balanced equitable
outcomes, even as India’s low-consumption lifestyles and initiatives like Mission LiFE offer a
strategic advantage for aligning low-carbon growth with equity and public health co-benefits.
Behavioural change and resource efficiency are essential complements to technological
solutions. Initiatives like Mission LiFE, the Long-Term Low-Emissions Development Strategy
(LT-LEDS), and the National Action Plan on Climate Change (NAPCC) recognise the role of
individual and community behaviour in influencing energy demand and material consumption.
Addressing resource-intensive behaviours such as high-emission mobility patterns, inefficient
cooling practices, and food waste systematically can help moderate future demand and reduce
dependence on virgin resources. These measures also support energy security and reduce
pressure on land and water. Scenarios Towards Viksit Bharat and Net Zero: An Overview xxxiii
Executive Summary
Way Forward to India’s Net Zero Transition
Realising India’s aspirations of becoming Viksit Bharat i.e., a developed economy by 2047 and
achieving the Net Zero goal by 2070 will require an enabling ecosystem that spans robust
institutions, innovative finance, integrated data systems, and strategic planning. By strengthening
these foundational elements, sectoral transitions scale rapidly, affordably, and equitably. Based
on cross-sectoral evidence, the following high-level actions are critical.
1. Anchor the transition in demand moderation, efficiency, and circularity
Demand-side action is the most cost-effective lever available to India and should be accorded
equal priority to the expansion of clean energy supply. An economy-wide Avoid–Shift–Improve
approach may guide policy across transport, buildings, and industry. This entails adoption of
super-efficient appliances and equipment, scaling up of industrial retrofits (especially among
MSMEs), acceleration of circular material flows through recycled-content standards and extended
producer responsibility, and systematic integration of behavioural change initiatives such as
Mission LiFE. Effective management of demand growth will reduce infrastructure requirements,
lower import dependence, alleviate pressure on land and mineral resources, and enhance
affordability, thereby enabling the transition faster and more resilient.
2. Promote demand electrification alongside power sector transition to cleaner
sources
Electrification across mobility, buildings, cooking, and industrial heat must become the principal
pathway for low-carbon growth. This transformation can be achieved by concurrently rebuilding
power system to deliver scale, flexibility, and reliability. Key priorities include accelerating the
deployment of renewable energy with storage and hybrid configurations, scaling nuclear power
as a source of clean baseload power, modernising and enhancing the flexibility of the coal fleet
during the transition, and strengthening transmission and distribution networks. The nationwide
implementation of time-of-day tariffs, dynamic pricing, ancillary service markets, and digital
grid management is essential to align demand with the availability of renewable energy. These
reforms will ensure electrification, reduce costs, and increase reliability.
3. Reorient urban and mobility systems toward public and shared transport
With passenger and freight movement expected to rise manifold, the structure of urban form
and modal choice will be the primary determinants of transport outcomes, rather than vehicle
technology alone. Policy direction ought to emphasise the development and integration of
rail, metro, buses, non-motorised transport, and waterways, supported by transit-oriented
development planning, parking reform, and congestion management. Advancing zero-emission
vehicle mandates, EV-ready building codes, interoperable charging infrastructure, and fleet
electrification can proceed in parallel with large-scale investment in mass transit and freight
corridors. Facilitating the shift of people and goods to more efficient modes will yield emissions
reductions, alleviate congestion, improve air quality, and reduce dependence on oil.
4. Lock in efficient buildings before the construction boom peaks
With more than 80% of future floor space yet to be built, the building sector presents a
singular opportunity to avoid inefficient energy use. Energy and building codes need to evolve Scenarios Towards Viksit Bharat and Net Zero: An Overview xxxiv
Executive Summary
from design-stage intent to performance-based outcomes that are consistently enforced. This
requires embedding codes into municipal bylaws, digitising approvals and compliance processes,
professionalising third-party assessment, and expanding standards to cover residential buildings
and retrofits. Progressive inclusion of thermal performance, whole-life and embodied carbon,
commissioning, and climate resilience will be critical. Market-based instruments such as
benchmarking, disclosure, appliance standards, green procurement, and workforce skilling can
reinforce these measures, making Net Zero ready buildings the norm rather than the exception.
5. Enable transition in industry without compromising competitiveness
The industrial sector is poised for expansion to support both development and the energy
transition, positioning clean industrial growth as a strategic imperative. Near-term gains lie
in energy efficiency, electrification, and circularity, particularly among MSMEs, while frontier
technologies are piloted and scaled. Targeted support can de-risk green hydrogen, CCUS,
low-carbon cement, and advanced materials through demonstration funding, blended finance,
assured offtake, and public procurement. At the same time, India must prepare for emerging
trade regimes by strengthening carbon measurement, certification, and product standards.
Competitiveness in a carbon-constrained global economy will hinge on early and decisive action.
6. Build a resilient domestic supply chain for clean technologies and critical
materials
The Net Zero transition will sharply increase demand for critical minerals, components, and
advanced manufacturing. Avoiding substitution of fossil-fuel dependence with new forms of
import dependence requires accelerated domestic exploration and credible geological data,
alongside production‑linked incentives that strengthen downstream manufacturing. Midstream
resilience depends on scaling refining, and advanced recycling capacity through coordinated
incentives, technology access, and reliable secondary feedstock, while maintaining environmental
and social safeguards. International exposure can be reduced by diversifying overseas mineral
access through risk‑differentiated partnerships, embedding India in resilient global value‑chain
arrangements, and strengthening institutions such as KABIL for overseas execution. Trade
policy, standards, skills development, and mission‑oriented R&D frameworks aligned with
pilot‑to‑commercial pathways will build domestic innovation and technology capability
7. Plan land and water use proactively
Land and water are emerging as critical for clean energy deployment. Integrated spatial
planning is required to reconcile renewable energy, transmission, urban growth, agriculture,
and ecosystem protection needs. Priority measures include advancing land-neutral options such
as agrivoltaics and floating solar, repurposing degraded and mined areas, and adopting basin-
aware water strategies for hydrogen and cooling.
8. Anchor people, jobs, and affordability in the transition
India’s Net Zero transition will impact employment in a differentiated manner across regions,
requiring a national framework for retraining, relocation, and diversification. District Mineral
Foundations, the Skill India Mission, and the Skill Council for Green Jobs can finance worker
shifts into green sectors, supported by integrated district‑level plans that combine diversification, Scenarios Towards Viksit Bharat and Net Zero: An Overview xxxv
Executive Summary
infrastructure, and workforce support. Strengthening labour data through an upgraded e‑Shram
platform will link informal occupations to fossil‑linked industries, while expanded access to
ESIC, health insurance, and pensions protects those facing displacement. Local transition units
can coordinate benefits and outreach to women and marginalised groups, and sector‑specific
skill roadmaps aligned with state low-carbon growth pathways will guide reskilling into
low‑carbon roles across renewables, grid modernisation, electric mobility, energy efficiency,
and climate‑resilient sectors.
9. Treat adaptation and resilience as integral to Net Zero delivery
Managing the transition requires giving importance to adaptation. Adaptation needs
complementing with systematic investment in resilience, through vulnerability mapping,
adaptation costing, climate-proofing of infrastructure, and strengthened health, water, and
disaster-risk systems. Early investment in resilience reduces long-term fiscal burdens and
protects development gains, ensuring that Net Zero pathways remain viable under worsening
climate risks.
10. Mobilise finance at scale through dedicated institutions and market reform
India’s Net Zero transition will require around USD 500 billion per annum, far above current
annual flows that stand at only one‑quarter to one‑fifth of this level. The challenge lies less in
capital availability than in intermediation, risk management, and cost of capital. A National Green
Finance Institution can anchor blended finance, guarantees, project preparation to crowd in
private and foreign capital, including sovereign wealth funds. A unified climate finance taxonomy
will strengthen disclosures, prudential treatment, and market confidence. Deepening corporate
bond markets, expanding IFSC/GIFT co‑investment platforms, development of bankable project
pipeline and deploying transition‑finance instruments will be critical to funding both greenfield
and brown‑to‑green investments without constraining growth.
11. Mission-Mode Implementation and Innovation accelerates change
Past national missions in sanitation, digital payments, social security, and infrastructure
demonstrate India’s capacity to deliver when institutions, targets, and funding are aligned. The
Net Zero transition requires mission-mode programmes that concentrate effort, funding, and
innovation on cross-sector priorities. Strategic missions on demand-side management, circular
economy, systemic electrification, and industrial innovation emerge as priority areas.
12. Establish robust data, digital rails, and Monitoring, Reporting & Verification
(MRV) systems as core infrastructure
Credible, interoperable data underpins planning, markets, and trust. Harmonisation of energy
and emissions statistics, development of state-level inventories aligned with national reporting,
and upgraded digital platforms for real-time monitoring and settlement are essential. The Unified
Energy Interface provides a foundation for interoperable EV charging and energy services, while
integrated dashboards can reduce transaction costs, enable demand response, and strengthen
accountability. Data and digital systems constitute core infrastructure for a modern energy
economy. Scenarios Towards Viksit Bharat and Net Zero: An Overview xxxvi
Executive Summary
13. Strengthen institutions for whole-of-economy delivery
The scale and cross-cutting nature of the transition call for durable coordination beyond existing
arrangements. Establishing an executive body under the Prime Minister’s Council on Climate
Change as a Low Carbon Development Cell/Secretariat would enable coordination across
line ministries and departments, provide continuous analytical support, resolve bottlenecks,
and align centre–state action. Five-year sectoral and state budgets aligned to the NDC cycle,
modernised regulation, and independent progress assessment will shift climate action to a
standing delivery system.
In sum, India’s Net Zero transition can be achieved by quickly building the enabling systems that
convert sectoral intent into economy-wide action. Demand moderation, electrification, public
infrastructure, industrial competitiveness, finance, data, institutions, and people-centred delivery
must move together. At the same time, sustained international cooperation through predictable
climate finance, technology collaboration, and open, rules-based markets will be essential to
support this scale of transformation. Executed well, this agenda positions Net Zero as the
foundation of a cleaner, competitive, and resilient Viksit Bharat.
Conclusion
India’s Net Zero emissions are an opportunity for achieving Viksit Bharat. Building a modern,
advanced economy while changing its energy and technological bases is an opportunity for
India to leverage the disruption and leapfrog into the future as a leader. It can be the pioneer
in the technologies needed for the Net Zero transition. Just as the invention of steam engine
led to the Industrial Revolution which transformed past development patterns and economic
models, India’s Net Zero transition will create new Indian Development Model combining
economic vitality, technological leadership, and sustainability. This requires sustained, multi-
decade transformation driven with purpose.
Currently, this transition is unfolding amid heightened global uncertainty. Many developed
economies have not met earlier climate-finance commitments, or slowed their low-carbon
transitions, creating uncertainty about the availability and cost of capital, technology transfer,
and future markets for emerging green industries. At the same time, a disproportionate share
of impact of climate change is on developing countries, despite their minimal contribution to
cumulative emissions.
For India, climate ambition must therefore align with questions of fairness, international
cooperation, and the development prerogative. The scale and sequencing of the Net Zero
pathway must remain compatible with economic inclusion, structural transformation, and
resilience to climate change. The pathways India shows will be a lighthouse for the developing
world. The Indian Development Model will set the trend for others. INTRODUCTION xxxviiiScenarios Towards Viksit Bharat and Net Zero: An Overview
Introduction
India’s Moment of Opportunity: The Viksit Bharat Vision
India stands at a decisive moment in its growth journey. The Hon’ble Prime Minister Shri Narendra
Modi has given a call that by 2047, the centenary of Independence, India should become Viksit
Bharat, a USD 30 trillion developed economy. As articulated by the Prime Minister, this vision is
a call for prosperity that reaches every citizen, opportunities that are open to all, and growth
that is both sustainable and inclusive.
Already, the world’s fourth-largest economy, with a GDP of over USD 4 trillion and a population
of approximately 1.46 billion in 2025 (IMF, 2025), India combines a vast domestic market and a
powerful demographic dividend. With a median age of 28 years, its young workforce sets the
country apart globally (UNFPA 2025). India’s development choices therefore carry consequences
far beyond its borders. It is an important engine of global growth.
Achieving Viksit Bharat will require sustained high growth of 7-8% over the next 25 years,
leading to an improvement in the quality of life, employment, housing, education, healthcare,
and clean energy access. It will also require moving from informal, low-productivity work to a
dynamic, industry and services-led economy that shares the benefits of growth across regions,
genders, and income groups.
With approximately 51% of Indians projected to live in cities by 2047, urban planning must
deliver liveable, efficient, well-connected spaces with resilient infrastructure and accessible
public transport. Investments in education, nutrition, and skills will be equally vital to raise
productivity and overall well-being.
None of this is possible without reliable and affordable energy. As India modernises industry,
electrifies transport, and raises living standards, energy policy will remain at the heart of the
nation’s development strategy. For countries at India’s stage of development, energy access is
foundational to improving human development. Raising the Human Development Index (HDI)
depends on ensuring reliable electricity for households, schools, and hospitals, clean cooking
fuels, and affordable energy for industries and transport. India’s current per-capita primary
energy use is just 25–30 gigajoules (GJ) per year, compared to 100–150 GJ per year in Germany
or the UK, and more than 250 GJ per year in the US (UNDP, 2023), is low and has tremendous
upside potential.
Evidence shows that moving from low consumption levels toward approximately 50–100 GJ
per person yields the biggest gains in HDI with better health outcomes, higher life expectancy,
longer schooling years, and stronger income growth (Acheampong et al., 2021). At the same
time, India need not aspire to the U.S. model of excessive energy consumption. Countries like Scenarios Towards Viksit Bharat and Net Zero: An Overview xxxix
Introduction
Switzerland, Germany, and the UK have achieved high HDI with far more moderate energy use
(Pascale et al., 2022). Their experience demonstrates that efficiency and equitable distribution,
in energy use are as important as total consumption. Norway’s example further illustrates that
higher per-capita energy can align with sustainability when sourced from renewable sources.
For India, the strategic path is not just energy expansion but targeted growth in access and
infrastructure, combined with investment in efficiency, conservation and sustainable consumption.
Mission LiFE (Lifestyle for Environment), conceived by the Prime Minister, and launched by
the Government of India, exemplifies this approach. It emphasises sustainable consumption,
encouraging individuals and communities to adopt environmentally responsible lifestyles, from
reducing energy waste to promoting clean mobility.
India’s policy challenge is to increase per-capita energy use two to threefold to maximise
HDI benefits. By focusing on universal access, efficient urbanisation, scaling clean power, and
mainstreaming Mission LiFE, India can achieve high human development without replicating the
unsustainable consumption trajectories of industrialised nations.
India’s development choices will define not only its own future but the world’s pathway to
a just and equitable planet.
Global Climate Responsibility and India’s Vulnerability
India’s growth ambitions unfold in a world marked by deep inequities in responsibility for
and vulnerability to climate change.
India’s aspiration to become a developed nation by 2047 is unfolding at a time when climate
change is one of the main challenges facing the world. Its impacts are already exacting a heavy
toll on human lives, livelihoods, and economies, and causing widespread damage to ecosystems
and infrastructure.
The planet has already warmed by approximately 1.3°C compared to pre-industrial times, based
on the latest assessments for 2024 and 2025 (WMO, 2024). This warming is largely the result
of heavy fossil fuel use by developed countries over the past two centuries. If global emissions
continue unchecked, the resulting warming will have grave consequences, more frequent and
intense extreme weather events, rising sea levels, and widespread disruption to ecosystems and
livelihoods. These impacts will be especially severe for developing countries, which are more
vulnerable due to limited resources and less adaptive capacity.
India is especially vulnerable to these risks. More than 80% of the population lives in districts
exposed to floods, droughts, heatwaves, cyclones, or sea-level rise (World Bank 2023). These
impacts can potentially erode development gains and fall hardest on the poorest communities.
The irony in this vulnerability is that India has contributed very little to the problem itself. The
difference in current emissions between countries is stark. On a per-person basis in 2023, the
United States has emitted about 17.2 tonnes of Green House Gas (GHG) emissions
i
, the European
Union 7.2 tonnes, China 9.8 tonnes. As against this, India emitted just 2.9 tonnes, less than half
of the global average of 6.7 tonnes (Our World in Data, 2023). This disparity highlights the deep
inequities at the heart of the climate crisis, where those who contributed the most historically
are often best equipped to adapt, while those least responsible remain most vulnerable.
i Here Greenhouse gas emissions include carbon dioxide, methane and nitrous oxide from all sources including land
use change and are measured in tonnes of carbon dioxide equivalent over a 100-year timescale Scenarios Towards Viksit Bharat and Net Zero: An Overview xl
Introduction
Science shows that the time left to limit warming to 1.5°C is fast running out. To have a reasonable
chance of restricting the temperature increase to 1.5°C, the world’s remaining “carbon budget”
as of 2025 is estimated at only about 130 to 250 billion tonnes of CO₂, far lower than the 500
billion tonnes assessed in earlier years (Smith et al., 2023). Developed countries have already
exceeded their fair share of the global carbon budget. At the annual global emissions rate of
approximately 41.6 billion tonnes of CO₂ in 2024 (WMO, 2024), the remaining budget could be
exhausted in as little as three to six years, depending on the chosen pathway.
Under the principle of Common but Differentiated Responsibilities (CBDR), first formalised in
the United Nations Framework Convention on Climate Change (UNFCCC) in 1992, developed
countries pledged to support developing nations through climate finance, technology transfer,
and capacity-building. Yet these commitments have largely fallen short, leaving developing
countries at a disadvantage as they attempt to manage urgent development needs and climate
commitments. These gaps date back to the Kyoto protocol, where several developed countries
did not meet their legally binding emission targets or withdrew from commitments altogether.
The recent policy reversals, such as the United States’ withdrawal from the Paris Agreement
in 2017 and its announcement to withdraw again in 2025, have undermined confidence and
disrupted momentum. In Europe too, inconsistent implementation of climate commitments has
raised concerns. The United Kingdom’s recent delays in phasing out gas boilers and internal
combustion engine vehicles, as well as Germany’s temporary increase in coal use following the
energy crisis, have signalled similar wavering of climate resolve. These gaps underline the need
for consistent, long-term commitment from those most responsible for the problem, and for
stronger international cooperation to support countries like India in achieving both development
and climate goals.
India’s Development Pathway: Opportunities and Imperatives
India’s journey toward prosperity is also a test of how development can happen in a low
carbon manner.
India is undertaking a developmental journey with no historical precedent, balancing two goals
simultaneously. India has set out a comprehensive development agenda under Viksit Bharat,
which envisions increasing GDP to USD 30 trillion by 2047. It involves building the infrastructure,
services, and opportunities needed for a better quality of life for all. At the same time, India has
voluntarily committed to achieving Net Zero greenhouse gas emissions by 2070. The central
challenge is to grow rapidly while progressively reducing emissions, effectively charting a path
of low-carbon development. No other large economy has attempted this at a large scale in the
past. This transition is further complicated by the fact that many of the technologies needed
for Net Zero, such as Carbon Capture Utilisation and Storage (CCUS), long-duration energy
storage, and small modular nuclear reactors, remain nascent, expensive and unproven at scale.
Most developed countries peaked their emissions decades ago- Germany, France and the United
Kingdom in 1990s; the United States and Canada in 2007; and Japan and Korea in 2020. This
gave them a comfortable four to six decades to reach Net Zero by 2050. India, by contrast,
has pledged to achieve Net Zero transition in less than 50 years, while simultaneously achieving
its developmental goals.
India also has to protect millions of vulnerable citizens from the escalating impacts of climate
change. Adaptation is therefore as critical as mitigation, demanding significant investment in
resilience and safety nets even under fiscal constraints. Scenarios Towards Viksit Bharat and Net Zero: An Overview xli
Introduction
This dual task presents both opportunities and challenges. Given that most of India’s future
infrastructure is yet to be built, India can embed energy efficiency, resource conservation, and
clean technologies, setting itself on a modern, future-ready trajectory. On the other hand, it
faces the reality of high upfront costs and competing demands for limited resources.
If India succeeds in demonstrating that rapid economic growth and human development and a
low-carbon pathway can advance together, it will set a powerful precedent for other developing
nations. India’s success will not only shape its own future but also carry global significance in
the fight against climate change.
Even though India is not responsible for creating the global problem of climate change, as a
responsible nation, it has acted to contribute to solving it. Over the past two decades, India has
worked to integrate low-carbon policies in its development. This is led by the Prime Minister’s
Council on Climate Change (PMCCC) at the national level. At the subnational level, State Action
Plans on Climate Change (SAPCCs) are now operational in 34 States and Union Territories,
integrating climate considerations into state-level development planning and ensuring that
climate action is embedded across all levels of governance.
India has also exhibited committed leadership on the international stage. It has founded platforms
like the International Solar Alliance, the Coalition for Disaster Resilient Infrastructure and the
Global Biofuel Alliance, bringing together countries to collaborate on shared solutions. Mission
LiFE (Lifestyle for Environment) has turned sustainable living into a global people’s movement,
endorsed by the United Nations and embraced by governments and communities worldwide.
India is also among the few G20 countries on track to meet climate commitments. It has already
achieved a 36% reduction in GHG emissions intensity of GDP from 2005 levels and reached 50%
non-fossil electricity capacity, ahead of schedule (PIB, 2025). Its per capita emissions remain
far below the global average, yet its commitments are among the most ambitious for a country
at its stage of development.
While these initiatives have created an essential foundation, they represent only the initial phase
of what will need to be a far more extensive and sustained transformation. The most challenging
phases of India’s transition, such as rapidly scaling clean technologies, ensuring affordability,
and building resilience, still lie ahead.
NITI Aayog’s Framework for India’s Net Zero Transition Pathways
For the first time, India’s transition planning unites sectoral expertise and inter-ministerial
collaboration under one integrated framework.
In this context, NITI Aayog has undertaken the first government-led, integrated assessment of
how India can achieve the vision of Viksit Bharat by 2047 while simultaneously achieving Net
Zero by 2070. This effort combines sectoral expertise, inter-ministerial coordination, and policy
analysis within a unified framework, ensuring that its recommendations are both technically
rigorous and actionable. It is important to emphasize that this is a “development first” analysis.
The primary focus is on how India can achieve its goal of becoming a developed country.
Simultaneously, how India can also contribute to solving the global commons problem of
climate change. In that sense, this is not a “decarbonisation” or “mitigation” focused analysis.
Instead, the focus is on how India can achieve its developmental goals in a low carbon manner.
As India is attempting a historically unprecedented transition, a detailed examination on all
aspects of this transition has been undertaken. Ten Inter-Ministerial Working Groups (IMWGs) Scenarios Towards Viksit Bharat and Net Zero: An Overview xlii
Introduction
were constituted to examine the sectoral and cross-cutting aspects of the transition from power,
industry, transport, buildings, and agriculture, to climate finance, critical minerals and the social
aspects of the energy transition. Each group brought together policymakers, domain experts,
and industry stakeholders to identify challenges, propose actionable policy levers, and highlight
synergies across sectors. This synthesis report integrates the findings of the working groups
into a coherent national roadmap across two-time horizons, i.e., medium term (to 2050), and
the long term (to 2070).
Further, this is designed as a living document, capable of being periodically updated as
technologies advance, costs shift, global commitments evolve, and new evidence emerges.
This is to ensure that India’s Net Zero pathway remains relevant, responsive, and anchored in
the latest realities.
The overarching framework for India’s Net Zero transition is articulated in the Long-Term Low
Emission Development Strategy (LT-LEDS) submitted by India to the United Nations Framework
Convention on Climate Change (UNFCCC) in November 2022.
India’s low-emission development strategies continue to be guided by the foundational
principles of UNFCCC – equity, climate justice and the principle of common but differentiated
responsibilities and respective capabilities. Accordingly, as elucidated in its LT-LEDS, India’s path
to net zero is guided by the following considerations: (i) India’s minimal historical contribution
to global cumulative greenhouse gas emissions; (ii) the country’s substantial and growing
energy requirements to support inclusive economic development; (iii) India’s commitment to
pursuing low-emission development strategies in accordance with national circumstances; and
(iv) the imperative to strengthen climate resilience. These considerations inform policy design
and implementation to ensure that the transition to Net Zero remains aligned with national
development objectives.
The NITI Aayog’s “A Study Report on Scenarios Towards Viksit Bharat and Net Zero: An
Overview” is based on modelling approaches that have inherent limitations. This modelling
effort has been undertaken to get insights into the potential impacts of mitigation policies, and
can be neither predictive nor prescriptive. Given the challenges in modelling the complexities
of the real world, all models depend on a range of assumptions, and their outcomes must
therefore be interpreted with care and should not be considered as policy prescriptions.
The analysis presented in this study report is subject to multiple uncertainties whose impact on
the modelling outcomes has not been quantified. Nor does it incorporate all prospective policy
developments and exogenous factors. These include, inter alia, recent, planned and potential
future government initiatives, recent and future budgetary allocations, evolving geopolitical
dynamics, trade considerations and constraints, and the development and deployment of
emerging and disruptive technologies. As these factors may materially influence India’s energy
emissions and development trajectories, this report should be considered one of several studies
rather than a prescriptive or exhaustive pathway to net zero emissions.
The options presented in this report are in the context of India’s long-term vision to achieve Net
Zero emissions by 2070. However, this vision was itself presented in the context of a unified global
effort to address the problem of global warming on the basis of the agreed principles of equity
and common but differentiated responsibilities and respective capabilities. For the required
pace of technological development and deployment to materialize at scale, it is necessary that
the projected technologies finally emerge into the real world of deployment at scale. Further, Scenarios Towards Viksit Bharat and Net Zero: An Overview xliii
Introduction
to deploy new technologies at scale, even after their development, a conducive, cooperative
global environment is necessary. The pace and feasibility of achieving Net Zero emissions are
also critically dependent on the availability of adequate means of implementation, viz., finance,
technology, and capacity-building support from developed countries, consistent with India’s
development priorities and national circumstances, as underlined in the UNFCCC and its Paris
Agreement, to both of which India is a signatory. Furthermore, external and unpredictable
events beyond government and indeed the nation’s control may alter projected pathways. Key
macroeconomic and other assumptions underpinning the analysis, including GDP growth and
population projections, are inherently uncertain and may diverge from future outcomes.
This report has been prepared as an independent analytical study on Viksit Bharat @2047 and
Net Zero. It is intended solely to support research and policy dialogue, and is an initial step
to encourage further discussion on this issue at the national level. The contents of this report
do not represent, and shall not be construed as, the official views, positions, commitments, or
policy directions of the Government of India, any Ministry or Department, or any national or
international institution. Nothing in this report shall be interpreted as legal, financial, investment,
or policy advice, nor as creating any obligation, commitment, or expectation on the part of
any government, public authority, or private entity. Thus, in view of the above, the findings
and outcomes of the study provide an indicative direction in which technological, financial and
capacity building measures need to be undertaken to steadily move towards the goal of Net
Zero.
The report is structured as follows:
i. Chapter 1: India’s Energy, Economy, and Climate-The Current Landscape: Provides
the economic and social baseline, current energy and emissions trends, and progress
under existing energy and climate policies.
ii. Chapter 2: Integrated Modelling Framework for Net Zero Pathways: Explains the
modelling approach and tools used, defines scenarios, and summarises sector-wise
projection methods.
iii. Chapter 3: Framing India’s Century: The Viksit Bharat Vision and Sustainable
Choices chapter sets out the vision framework, India’s strategic endowments, the
macroeconomic blueprint, and sectoral development choices that drive demand.
iv. Chapter 4: India’s Transition Pathways: Presents national-level projections for final and
primary energy demand, electricity demand and supply. It also highlights key levers
for enabling low-carbon transition.
v. Chapter 5: Sectoral Transition Pathways: Details pathways for transport, industry,
buildings, agriculture, and waste, outlining key technologies and policy levers.
vi. Chapter 6: Financing Net Zero Pathways for India: Estimates investment needs
for mitigation, maps aggregate financial flows and the financing gap, and proposes
measures to mobilise finance.
vii. Chapter 7: Macroeconomic Implications of Net Zero: Analyses the impact of the Net
Zero transition on GDP and its components, sectoral output and shares, investment,
trade, household income and consumption, fiscal indicators, regional dynamics, and
the import bill/government revenue. Scenarios Towards Viksit Bharat and Net Zero: An Overview xliv
Introduction
viii. Chapter 8: Critical Minerals and Supply Chains: Examines critical mineral requirements,
supply-chain risks, enabling policies, circular-economy solutions and R&D needs.
ix. Chapter 9: India’s Energy Transition: A Social and Behavioural Blueprint: Addresses
land and water needs, employment and migration, health vulnerabilities and co-benefits,
and behavioural patterns, barriers, and opportunities for change.
x. Chapter 10: Enabling the Net Zero Transition: Challenges and Opportunities—
Consolidates sectoral and cross-cutting challenges and recommendations, and outlines
the way forward to Net Zero.
Together, these chapters chart a framework for India’s path to a developed, low-carbon future.
Chapter 1 opens by framing the dual challenge: delivering prosperity for all while committing
to Net Zero by 2070, and defining the baseline for the economy, energy system, and climate
policy from which the transition will unfold. 1
INDIA’S ENERGY,
ECONOMY, AND
CLIMATE- THE CURRENT
LANDSCAPE 2Scenarios Towards Viksit Bharat and Net Zero: An Overview
India’s Energy,
Economy, and Climate-
The Current Landscape
This chapter sets the stage for India’s pathway to Net Zero by 2070, examining the nation’s
economic ambitions, social realities, and the central role of energy in shaping growth. It explores
how India balances rapid development with low-carbon pathways, tracing current energy supply
and demand patterns, emissions trends, and the evolution of climate policy. Together, these
insights form the baseline against which India’s transition to Net Zero needs to be understood.
1.1 OVERVIEW
India’s economy has expanded from under USD 300 billion in 1993 to nearly USD 4.2 trillion
in 2025 (IMF 2025), making it the world’s fourth-largest economy in nominal terms and third-
largest by Purchasing Power Parity (PPP) (PIB, 2025). Per-capita income has grown more than
eightfold, from USD 305 in 1991 to USD 2,700 in 2024. More than 250 million people have exited
multidimensional poverty between 2015 and 2022 (NITI Aayog 2023; UNDP).
These achievements rest on deep structural reforms, ranging from Goods and Services Tax
(GST) and the Insolvency and Bankruptcy Code to the creation of Aadhaar and the Unified
Payments Interface (UPI), all of which have reshaped India’s growth model around physical and
digital infrastructure, and improved service delivery. Yet, sustaining this transformation depends
critically on reliable, affordable and clean energy.
Energy and development remain deeply intertwined. Every phase of economic expansion, from
industrialisation to urbanisation and rising household prosperity, has been accompanied by an
increase in energy demand. According to MOSPI Energy Statistics 2025, India’s primary energy
supply (excluding traditional biomass) rose from 28.4 exajoules (EJ) in 2014–15 to 38.4 EJ in
2023–24, an increase of more than 30%. At the same time, energy intensity of GDP declined
from 0.27 MJ per INR to 0.22 MJ per INR, showing that India has begun to decouple economic
growth from energy use even as total demand expanded. This balancing act, expanding demand
while lowering intensity, captures the essence of India’s energy- development nexus.
Yet the composition of this energy use highlights the scale of the challenge. In 2024-25, fossil
fuels provided about 87% of total primary energy supply (41.45 EJ
ii
): coal accounted for 54%,
oil 26%, and gas 7%. Non-fossil sources contributed 13% of total primary energy, out of which
bioenergy (including traditional biomass) accounting for 8% with nuclear, hydro, solar, and wind
making up the rest.
ii The difference with respect to MoSPI estimations arises from the accounting of traditional biomass
1 Scenarios Towards Viksit Bharat and Net Zero: An Overview 3
India’s Energy, Economy, and Climate-The Current Landscape
India is among the countries with the fastest renewable energy expansion. Non-fossil fuel-based
installed capacity has reached 50% of the grid-based total power installed capacity (MNRE,
2025). Universal household electricity access was achieved in 2021 through the Saubhagya
program, while over 80 million families gained access to clean cooking fuel under the Ujjwala
Yojana. Efficiency initiatives, from Unnat Jyoti by Affordable LEDs for All (UJALA) program to
Bureau of Energy Efficiency’s Perform, Achieve and Trade scheme for industries, have cut costs,
reduced emissions, and improved household welfare.
In short, while the aggregate energy mix is still dominated by fossil fuels, the foundations of a
more diversified, inclusive, and lower-carbon energy system are firmly in place.
Climate policy has evolved in tandem with this transformation. The first phase, anchored in
the National Action Plan on Climate Change (2008), emphasised co-benefits: reducing fuel
imports, improving air quality, and enhancing rural livelihoods through missions on solar, energy
efficiency, and sustainable agriculture. Under the Paris Agreement (2015), India pledged to
reduce GHG emissions intensity by 33–35% from 2005 levels, and achieve 40% non-fossil power
capacity, and expand forest sinks (UNFCCC). In August 2022, India enhanced its NDCs raising
the emissions-intensity target to 45% by 2030 from 2005 levels, and the non-fossil installed-
capacity target to 50% by 2030. India achieved revised target of 50% non-fossil installed capacity
in 2025, while emissions intensity had fallen by 36% between 2005 and 2020 (BUR-4, 2024).
The second phase began with India’s Panchamrit commitments at COP26 and was later
consolidated in the Long-Term Low-Emissions Development Strategy (PIB, 2021; GoI, 2022).
Together, these shifted India’s climate policy to a comprehensive low-carbon development
pathway. These international pledges have been reinforced domestically through the recognition
of “green growth” as a core development priority in the Union Budget 2023-24 (Ministry of
Finance, 2023).
Importantly, India has framed its climate ambitions within the principles of climate justice and
Common but Differentiated Responsibilities (CBDR), asserting that its path must reconcile
energy transition with economic growth, poverty eradication, job creation, and energy access.
The next section turns to India’s economic and social context, exploring how structural
transformation, demographics, and urbanisation interact with this energy–development nexus.
1.2 ECONOMIC AND SOCIAL CONTEXT
Sustained High Growth, Global Repositioning
Over the past decade, India has consistently ranked as the fastest-growing large emerging
economy. Between 2015 and 2024, India’s real GDP growth remained within a consistently high
band of 6.5% to over 9%, excluding the pandemic period. This clearly outpaced other large
emerging economies such as Indonesia (around 5%), Malaysia (4-5%), and the Philippines (5-
6%), though it trailed China’s rapid expansion in the early 2010s (see Figure 1.1). Scenarios Towards Viksit Bharat and Net Zero: An Overview 4
India’s Energy, Economy, and Climate-The Current Landscape
-15%
-10%
-5%
0%
5%
10%
15%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
India China Indonesia Vietnam Malaysia Philip pines
Real GDP-Gr owth rate
Figure 1.1: Real GDP growth rate of select countries (2015 – 2024)
Source: World Development Indicators, World Bank
This rapid expansion translated into steady gains in nominal economic scale and global GDP
rankings. In 2011, India’s nominal GDP was USD 1.8 trillion and ranked tenth globally. India
became the 7
th
largest economy by 2015, and in 2022, it overtook the United Kingdom to
become the fifth-largest economy, and by 2025 surpassed Japan to claim the fourth position.
India ranks behind only the United States (USD 30.5 trillion), China (USD 19.2 trillion), and
Germany (USD 4.8 trillion) (See Figure 1.2).
This ascent, from tenth to fourth place in just fourteen years, reflects the combined impact of
sustained growth, macroeconomic stability, and structural reforms. It has also translated into a
growing global footprint: between 2015 and 2025, India contributed nearly 15% of incremental
world GDP growth, second only to China (32.1%) and ahead of advanced economies such as
the United States (9.4%) and the European Union (World Economics, 2024). Few countries
have managed a comparable scale of contribution through a decade marked by pandemic
disruptions, commodity volatility, and geopolitical tension. Scenarios Towards Viksit Bharat and Net Zero: An Overview 5
India’s Energy, Economy, and Climate-The Current Landscape
0
5
10
15
20
25
30
35
40
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
USD Trillions 
China Germ any India Japan Unite d Kingdom Unite d States
5
th
 largest 
4
th
 largest 
3
rd
 largest 
10
th
 largest 
Figure 1.2: Nominal GDP of select countries in USD Trillions (2000 – 2024)
Source: IMF
These macroeconomic gains have translated into tangible social outcomes. Between 2015
and 2022, more than 250 million people were lifted out of multidimensional poverty, with the
Multidimensional Poverty Index (MPI) headcount ratio falling from 29% to 11% (NITI Aayog,
2024; UNDP). By 2019, near-universal residential electricity access was achieved through the
Saubhagya scheme, while over 100 million poor households gained Liquified Petroleum Gas
(LPG) connections under the Pradhan Mantri Ujjwala Yojana (PMUY) (PIB, 2025). More recently,
the PM JanMan initiative has extended energy, housing, and water services to vulnerable tribal
groups (PIB, 2024).
Investment Led Model
Analysis of the Reserve Bank of India database on Capital, Labour, Energy, Materials and Services
confirms that India’s growth since 2000 has been powered primarily by capital deepening.
Between 2000–10, capital stock expanded by 8.1% annually on average, far outstripping the
contributions from employment (2.8%), labour quality (0.6%), and Total Factor Productivity
(TFP) (0.2%). The following decade (2010–20) saw a similar pattern: capital stock growth (7.7%)
remained the largest driver, while TFP made only a modest contribution (0.6%). In the most
recent period (2021-24), capital accumulation slowed to 5.7%, but employment growth picked
up slightly
iii
.
Macroeconomic stability has underpinned India’s investment-led growth. Public debt is roughly
80% of GDP, yet external debt is modest at 18.7% of GDP (Ministry of Finance, 2024) and
predominantly long-term in nature. Inflation has averaged within the RBI’s 4-6% tolerance
band, even amid global commodity spikes, supported by proactive food price management
and targeted energy subsidies. Foreign exchange reserves exceeding USD 600 billion provide
a strong buffer, covering short-term liabilities and shielding the economy from external shocks.
iii https://www.rbi.org.in/scripts/klems.aspx Scenarios Towards Viksit Bharat and Net Zero: An Overview 6
India’s Energy, Economy, and Climate-The Current Landscape
India’s development trajectory has been shaped by the distinctive structure of its economy.
According to the Periodic Labour Force Survey 2023-24, nearly 46% of the workforce is in
agriculture, generating about 14.7% of Gross Value Added (GVA) in 2023-24. This underscores
the sector’s importance but also the significant productivity gap relative to the rest of the
economy. Manufacturing share is around 18%, which highlights the substantial opportunity to
expand labour-intensive and high-productivity industry, as has been observed in successful
transformation stories globally (China-~25% & Vietnam-~24%). Meanwhile, services contribute
55% to Gross Value Added (GVA) while employing 30% of the workforce reflecting their central
role in output but their more limited capacity for large-scale labour absorption. Compounding
this is the dominance of informality: over 70% of non-farm workers are in informal jobs
(PLFS 2023-24). Female labour force participation, though rising to 42% in 2023-24, remains
concentrated in agriculture and low-productivity informal work, and continues to trail global
and emerging-economy benchmarks (MosPI, 2024).
Recognising the limits of only services-led growth, the government over the past decade
has placed renewed emphasis on manufacturing revival and infrastructure-led expansion. The
Production-Linked Incentive (PLI) schemes and the National Manufacturing Mission (NMM)
have targeted strategic sectors such as electronics, pharmaceuticals, automotive, textiles, and
clean energy technologies. This industrial policy push has been complemented by a sustained
increase in public investment.
Between FY2016-17 and FY2025-26, public capital expenditure more than tripled, from ₹4.5
lakh crore (2.9% of GDP) to ₹15.5 lakh crore (4.3% of GDP), according to the Union Budget
2025. The outcomes are visible: national highways expanded by over 60%, metro rail networks
grew nearly fourfold (from 250 km to 930 km across major cities), 1,400 km of dedicated
freight corridors became operational, and BharatNet brought broadband to almost every gram
panchayat (MoHUA, 2024).
Box-1.1: Performance Linked Incentive (PLI) Scheme and National
Manufacturing Mission (NMM): Design and Impact Snapshot
The Production Linked Incentive (PLI) scheme is a time-bound, pay-for-performance
programme that rewards incremental sales of goods made in India to catalyse capital
expenditure (capex), jobs, and technology transfer leading to higher exports. Launched
in 2020 and now spanning 14 sectors with an outlay of ₹1.97 lakh crore, it has 806
approved applications. As of March 2025, realised investments are ~₹1.76 lakh crore;
participant sales have crossed ~₹16.5 lakh crore; and over 12 lakh jobs (direct and indirect)
have been generated, indicating deeper domestic value addition and a stronger export
orientation.
Complementing PLI, the National Manufacturing Mission (NMM) announced in Union
Budget 2025–26, aims to boost innovation, raise competitiveness, and expand
manufacturing capacity across priority sectors, aligned with the Make in India and the
Aatmanirbhar Bharat initiatives. It emphasises faster technology adoption and deeper
MSME integration into value chains; the Government has also flagged rapid progress
and a “higher value at lower price” ethos for Indian industry. Scenarios Towards Viksit Bharat and Net Zero: An Overview 7
India’s Energy, Economy, and Climate-The Current Landscape
Sectoral gains are tangible: electronics output rose by 146%, from ₹2.13 lakh crore (FY21)
to ₹5.25 lakh crore (FY25); the automobile and auto-components PLI saw ₹67,690 crore
committed, ₹14,043 crore invested, and ~28,884 jobs created (as of Mar 2024); and
solar PV tranches target ~48 GW of integrated capacity with ₹48,120 crore committed
and ~38,500 direct jobs projected (to 30 Jun 2025). Together, these illustrate how PLI
is shifting India from assembly-led manufacturing to competitive, scaled production
across priority value chains.
Ref PIB https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=155082&ModuleId=3
https://www.pib.gov.in/FactsheetDetails.aspx?Id=149250
Stability and Resilience Amid Global Shocks
During the global energy crisis of 2021–22, when households across Europe faced record
electricity and gas price spikes (IEA, n.d), India pursued a consumer protection strategy rather
than full price pass-through. The government cut central excise on petrol and diesel in two
tranches (November 2021 and May 2022) by ₹13/litre for petrol and ₹16/litre for diesel (Ministry
of Petroleum and Natural Gas, 2025), and these reductions were fully passed on to consumers.
State Value Added Tax (VAT) reductions in some states added relief. LPG subsidies were
similarly expanded. Though India imports about 60% of its LPG, the effective price of a 14.2
kg domestic cylinder for Pradhan Mantri Ujjwala Yojana (PMUY) consumers was reduced from
₹903 in August 2023 to ₹503 in February 2025 (after a targeted subsidy of ₹300) (Ministry of
Petroleum and Natural Gas, 2024). Together, these measures show that India was able to avoid
the worst consumer-side disruptions seen in many countries, thanks to excise and subsidy relief
and tariff regulation, reinforcing the policy that energy affordability is a developmental priority.
Comparative Position: Strengths and Exposures
Comparative indicators highlight both India’s strengths and vulnerabilities (Table 1). On the macro
side, India has outperformed lower-middle-income peers in per-capita GDP and investment,
but it remains below Upper Middle-Income Country (UMIC) and High-Income Country (HIC)
benchmarks. Its favourable demographics contrast with low urbanisation. Structurally, agriculture
still accounts for a disproportionate share of employment, manufacturing lags, and labour
productivity is less than half the UMIC average. Social gains in schooling and poverty reduction
are notable, but health spending remains low. Innovation and R&D intensity are weak compared
to UMICs and HICs, though digital diffusion is progressing rapidly. External stability, by contrast,
is relatively strong, with high reserve cover and manageable debt ratios. Scenarios Towards Viksit Bharat and Net Zero: An Overview 8
India’s Energy, Economy, and Climate-The Current Landscape
Table 1.1: Comparative socio-economic indicators — India vs. country income
groups (2022–24)
India
Lower Middle
Income
Upper Middle
Income
High Income
Macro indicators
Per-capita GDP (Current USD)–2024 2696.7 2517.6 10,961.8 50,443.9
Merchandise trade (% of GDP)-2024 29.2% 43.8% 40.4% 45.6%
Gross fixed capital formation (% of
GDP)-2024
29.6% 28.6% 33.4% (2023) 22.2%
Demographics
Population aged 15-64 (% of total
population)-2024
68.2% 64.2% 68.4% 64.7%
Urban population (%)-202436.8% 40.9% 69.3% 81.3%
Structural balance of GDP
Agriculture (%Value added,
%employment)-2023
16.1%, 43.5%15.4%, 39.1%6.9%, 20.4% 1.3%, 3.2%
Manufacturing (% Value added)-2024 12.5% 14.2% 21.2% 12.4%
Female labour force participation rate-
2023
41% (2024) 37.5% - 55.1%
GDP per person employed (constant
2021 PPP USD)-2024
24,468 22,178 45,477 119,252
Social indicators
Gross Secondary School enrolment rate
(%) -2023
78.9% 67.9% 95.6% 103.6%
Government expenditure on education
(% of GDP)-2022
4.1% 3.5% 3.7%
4.8%
(2021)
Current Health Expenditure (% of
GDP)-2022
3.3% 3.9% 5.6% 12.5%
External Stability
Total reserves (% of external debt)-
2023
97% 54.9% 82.3% -
Short-term debt (% of total external
debt)-2023
19.5% 16.2% 30.9% -
Innovation capacity
R&D expenditure (% of GDP)-2022 0.67% - 2.14% 2.9%
Annual patent applications per million
people-2021
19
8(Egypt),
11 (Vietnam)
22(Brazil),
29 (South
Africa)
790 (US),
479
(Germany
Researchers in R&D per million-2020 259 - 1283 4238
High-technology exports (% of
manufactured exports)-2023
14.9% 15.7% 22.1% 23.45% Scenarios Towards Viksit Bharat and Net Zero: An Overview 9
India’s Energy, Economy, and Climate-The Current Landscape
India
Lower Middle
Income
Upper Middle
Income
High Income
Individuals using internet (% of
population)
56% (2022) 54% 78.5% 93.4%
Firm level inclusiveness
Firms with at least 10% foreign
ownership-2024
0.65%
(2022)
11.6% 8.6% 9.1%
Firms with female participation in
ownership (% of firms)-2022
3.88%
(2022)
29.5% 35.9% 40.1%
Energy and Climate
Energy use (kg of oil equivalent) per
USD 1,000 GDP (constant 2017 PPP)-
2022
82.87 76.5 107.1 70.94
GHG Emissions per capita
(kgCO
2
e per capita)- 2024
2.9
2.9 (Egypt),
5.8 (Vietnam)
13.2 (Brazil),
8.5 (South
Africa)
17.2 (US),
7.8
(Germany)
Source: World Development Indicators, WIPO, OurWorldinData
Perhaps most importantly, India’s energy and climate indicators underline both progress and
exposure. The per capita GHG emissions are among the lowest in the world.
The high import dependence (89% for oil and 47% for natural gas) expose India to risk of external
supply disruptions and price shocks (MoSPI, 2025). These vulnerabilities echo cautionary tales
from upper-middle-income countries (UMICs) such as Brazil and South Africa, which stagnated
after reaching middle-income status due to structural rigidities, commodity dependence, and
inequality. India’s demographic dividend, digital depth, and fiscal prudence set it apart, and by
now focusing on productivity in manufacturing and modern services, India is on the cusp of
sustained growth to becoming a developed country i.e., Viksit Bharat by 2047.
1.3 ENERGY AND EMISSION PROFILES
Global Energy Trends
World primary energy use rose from 550.5 EJ in 2015 to 592.2 EJ in 2024, an average growth of
0.8% per year. This is modest relative to global GDP expansion but still added 42 EJ — almost
the size of the EU’s entire annual hydrocarbon consumption in 2024. Crucially, the global system
remains fossil-fuel dominant: in 2024, coal, oil, and natural gas together still supplied 87% of
total energy, virtually unchanged from 2015 despite doubling of renewables’ share and nuclear
inching up.
Notwithstanding the global average, the national trajectories show variance. The EU’s total
energy use fell from 68.3 to 52.0 EJ (2.9%/yr decline), and the US decreased from 95.5 to 91.8
EJ (decline of 0.4%/yr). This reflected mature energy demand and efficiency gains. However,
both the EU and the US still meet most of their demand from fossil fuels. While the share of
coal is lower than a decade ago the share of gas has increased. China’s consumption expanded
from 126.2 EJ to 158.9 EJ (increase of 2.6%/yr). Coal’s share has decreased while oil, gas, nuclear Scenarios Towards Viksit Bharat and Net Zero: An Overview 10
India’s Energy, Economy, and Climate-The Current Landscape
and renewables have increased. India’s consumption grew from 29.3 EJ to 38.8 EJ (+3.2%/yr
increase). The energy mix is dominated by fossil fuels at 87%, with coal remaining the main
source (See Figure 1.3) (BP, 2016; KPMG, 2025
iv
).
v
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2015 2024 2015 2024 2015 2024 2015 2024 2015 2024
WorldEUUSChinaIndia
Share of primary energy mix
OilNatural  gasCoal Nuclear  EnergyHydroRenewab les
Figure 1.3: Comparative share of primary energy mix of select countries between 2015 and 2024
(BP, 2016; Energy Institute KPMG, & Kearney, 2025)
India’s Energy Mix
Globally, the headline is clear: even as renewable energy has significantly scaled, fossil fuel
dominance continues. India now stands out as the fastest-growing large energy consumer.
India’s energy system is diversifying. As of May, 2025, installed power generation capacity was
476 GW. Non-fossil sources contributed about 50% of this, while coal accounted for 46%. Coal
supplied 73% of the total power generation; non-fossil sources contributed roughly 25% (See
Table 1.2).
iv 2015 numbers taken from BP Statistical review of world energy 2016, and 2024 numbers used from KPMG
Statistical review of world energy 2025
v Due to different methodologies, there is a small difference in comparison with MoSPI estimates which shows
primary energy at 28.4EJ in 2015 and 38.4 EJ in 2024 for India Scenarios Towards Viksit Bharat and Net Zero: An Overview 11
India’s Energy, Economy, and Climate-The Current Landscape
Table 1.2: Current status of electricity capacity and generation in India (2025)
(BU) (2024-25) (utility-based)
GW%BU%
Coal221.8 46.68% 1332 72.89%
Oil & Gas25.12 5.29%321.75%
Nuclear8.18 1.72%573.12%
Hydro47.73 10.04% 1498.15%
Solar105.64 22.23% 144 7.88%
Wind50.04 10.53% 834.54%
Bio Power11.58 2.44%130.71%
Small Hydro5.1 1.07%12 0.66%
Import- 5.5 0.30%
Total475.19 100.00% 1827.5 100.00%
Source: CEA, 2025; ICED Dashboard NITI Aayog
Renewables now dominate new additions and are reshaping the structure of the power system.
However, their low-capacity utilisation means far more capacity must be built to meet demand.
Meanwhile, maintaining real-time balance between supply and demand becomes increasingly
complex as variable generation grows.
To manage this transition, energy storage, flexible generation, and stronger transmission and
distribution networks will need to scale rapidly. Coal continues to provide dependable, cost-
effective baseload power, anchoring system reliability as cleaner sources expand.
Taken together, a rapid clean build-out atop a coal-heavy base, this frames India’s central task:
sustain growth while accelerating efficiency and diversification so rising energy demand does
not hard-lock higher emissions or import risk. The pace of that shift is best assessed relative
to output, hence the turn to energy intensity.
Energy Intensity and Efficiency Gains
Energy intensity of GDP trends reinforce this picture. Globally, energy use per unit of output fell
from about 142 kg oil equivalent per USD 1,000 GDP in 1990 to 90 in 2022 (constant 2021 PPP),
a 37% improvement (World Bank). India’s decline has been even sharper: from 147 to 82.9 kg
oil equivalent per USD 1,000 GDP, a 44% drop, reflecting efficiency gains and structural shifts.
By comparison, the United States stands at 89.5 kg oil equivalent per USD 1,000 GDP, the
European Union at 54.4, and high-income economies average around 80.2. India thus still uses
more energy per unit of GDP than some advanced economies, but is converging quickly and
already performs better than the upper-middle-income average (107 kg of oil equivalent per
USD 1,000 GDP). In short, growth has become partly decoupled from energy use.
These gains in efficiency set the context for India’s emissions profile, where absolute emissions
are still rising, but per-capita and intensity indicators remain comparatively low. Scenarios Towards Viksit Bharat and Net Zero: An Overview 12
India’s Energy, Economy, and Climate-The Current Landscape
India’s Greenhouse Gas (GHG) Emissions Profile
India’s GHG emissions reflect both its developmental stage and structural energy choices. In
2024, per-capita net GHG emissions were 2.9 tCO₂ (including land-use), less than half the world
average of 6.7 t, and far below countries such as China, other upper-middle-income economies,
or the United States (see Figure 1.4) (Ritchie, 2023). India remains one of the lowest per-capita
emitters among large economies despite being the fastest-growing major energy consumer.
In absolute terms, based on MoEFCC inventories, between 2000 and 2020, energy-sector
emissions more than doubled, industrial process and product use (IPPU) nearly tripled, while
agriculture and waste emissions rose modestly (see Figure 1.5). Land Use, Land Use change and
Forestry (LULUCF) continued to be a net sink. According to the government’s latest Biennial
Update Report (BUR) (2020 base year), total gross GHG emissions (excluding land use) were
about 2.96 GtCO₂e and net emissions about 2.44 GtCO₂e after accounting for land use sinks.
0
2
4
6
8
10
12
14
16
18
20
India World
Avera ge
Indonesia EU South
Africa
UMIC China Brazi l USA
Per-capita GHG emissions (2023)
kgCO
2
e per capita
2.9
6.7 6.8
6.9
8.1
8.9
9.8
11.3
17.2
Figure 1.4: Per-capita GHG emissions of select countries in 2023 (tonnes per capita)²₂ff₄₄₄ ²₂ffff ² ²₂₂ ²₂ffffff ²₂ff₄₄ ²₂ffffff ²₂ff₄₄ ²₂ffffff ²₂ff₄₄ ²₂₂₂ ²₂ff₄ff 02468 02468 ²₂ff₄ff ²₂ff₂ ²₂ff₄ ²₂²₂ 0204681II1ndI4iadW1o 024681 024681IndiaWIorl88ad24aWIo46r1aA8l 024681In14d 024681Ind80246i1In8aW24on82468rlAnIvAe 02468
Million tonnes (Mt) emissions 
Figure 1.5: India’s GHG emissions trend for 2000 to 2020
Source: Biennial Updated Report Scenarios Towards Viksit Bharat and Net Zero: An Overview 13
India’s Energy, Economy, and Climate-The Current Landscape
At the same time, India has already reduced its emissions intensity of GDP by about 36%
between 2005 and 2020, surpassing its original Paris Agreement target well ahead of schedule.
Taken together, these numbers highlight India’s low per-capita emissions, declining carbon
intensity, with a coal-heavy power system that anchors industrial and residential energy supply.
The speed of clean-electricity expansion and industrial low-carbon growth will therefore
determine the pace of India’s overall transition.
To understand how energy is consumed across the economy, it is important to examine sectoral
demand patterns.
Sectoral Patterns of Demand in India
Over the last decade, final energy consumption in India rose from 414 Mtoe in 2014 to 614 Mtoe
in 2024, about 38% increase. (MoSPI, Energy Statistics 2025). The industrial sector showed the
highest growth (13%) driven by metals, cement, chemicals, and other energy-intensive industries
(see Figure 1.6). The transport sector followed with 11% growth, driven by road freight expansion
and a rising vehicle stock. Buildings (residential, commercial and public), continued a steady
increase. Universal electricity access, rising appliance ownership, and expanding floor space
pushed electricity consumption, especially for lighting, cooling and small motors. Agriculture
and other uses remain smaller in absolute terms but locally significant through diesel use for
irrigation and rural mobility.
These patterns underline India’s core transition task: not just expanding clean supply, but steering
demand growth particularly in industry, transport, and buildings towards efficiency and deeper
electrification. This is to ensure that rising energy use does not translate into proportionate
increases in emissions or import dependence.² ²₂₂ ²₂₂ ²₂₂ ²₂₂ ²₂₂ ²₂₂ ²₂₂ ²₂ff₄ ²₂² ²₂ff ²₂²ff ²₂ff₄ ²₂ff₄ff₄ff ²₂ff₄ ²₂ff₄₂ ²₂ff₄ff ²₂ff₄ ²₂ff₄ff
Figure 1.6: India’s final energy demand and sectoral share for 2014 and 2024
(Million tons oil equivalent, Mtoe) Scenarios Towards Viksit Bharat and Net Zero: An Overview 14
India’s Energy, Economy, and Climate-The Current Landscape
On a per-capita basis, India’s electricity consumption remains modest despite recent gains. In
2024, India consumed about 1,400 kWh per person, well below the world average (3,780 kWh)
and also below other countries such as South Africa (3,825 kWh), EU (6,000 kWh), and the
US (12,700 kWh) (Ritchie, 2023).
This signals substantial headroom for demand electrification, from Electric Vehicles and modern
cooking, to low-temperature industrial heat. The policy imperative is enabling rapid electrification
while simultaneously greening the power supply, ensuring that incremental demand raises
productivity and living standards without locking in higher emissions or import risks.
Energy and Human Development
Access to modern energy is directly correlated with human development outcomes. Cross-
country work and sectoral studies show that households and communities with reliable electricity
and clean cooking access consistently achieve higher schooling, improved health indicators,
and greater household incomes. However, the extent of these benefits varies by context and
complementary investments such as roads, appliances and credit availability.
The United Nations Development Programme (UNDP) has long recognised energy as an enabling
capability, documenting strong associations between modern energy access and higher Human
Development Index (HDI) levels, particularly once a basic threshold of access is crossed (Gaye,
2008). The report Tracking SDG 7, 2024, echoes this pattern: expanding access to electricity and
clean cooking correlates with improved education, health, and poverty reduction, yet progress
remains off-track without greater investment.
According to the Human Development Report 2023-24, India’s HDI stood at 0.644, placing it
within the medium human development category. An office of the Principal Scientific Adviser
(PSA) report envisions India climbing to the high HDI range (0.7–0.79) and eventually the very
high HDI range (0.80+), which could require per capita energy use of 41.2–48.6 gigajoules (GJ)
per year (Indian Institute of Management Ahmedabad, 2024). This is significantly below the
historical global average of ~100 GJ/capita observed in 1975, reflecting efficiency and technology
improvements.
In comparative perspective, India’s HDI of 0.69 at just 27 GJ per capita places it near the lower
end of the global energy–development curve. Peers such as Brazil and South Africa achieve
modestly higher HDI levels with two to three times India’s energy use. Advanced economies
cluster above 0.9 HDI, yet their energy intensities diverge widely, from ~135 GJ in Germany
to ~360 GJ in Norway, illustrating that once high development levels are reached, additional
energy use yields diminishing returns (see Figure 1.7). Scenarios Towards Viksit Bharat and Net Zero: An Overview 15
India’s Energy, Economy, and Climate-The Current Landscape
India
Germany
Norw ay
South  Korea
Japan
Denmark
Thailand
China
South  Africa
Indone sia
0
50
100
150
200
250
300
350
400
0.6 0.65 0.7 0.75 0.8 0.85 0.9 0.95 1
HDI
Per-Capita Energy Use (GJ)
Figure 1.7: HDI Correlation with per-capita energy use
This comparison suggests that India could advance into the high HDI category with only a
moderate increase in per capita energy use (≈40–50 GJ), provided the transition is driven
by efficiency gains. The overall pattern underscores that India can achieve higher human
development without converging to the very high energy intensities of advanced economies.
The next section examines India’s policy and institutional architecture, examining how national
strategies, sectoral programmes, and global commitments are shaping the speed and direction
of the transition.
1.4 POLICY DEVELOPMENTS AND INSTITUTIONAL ARCHITECTURE
India’s evolving economy-energy-climate landscape is marked by an ambitious and comprehensive
policy architecture, reflecting the nation’s dual imperative: achieving rapid, inclusive economic
development while honouring domestic and international climate commitments. The release of
the Long-Term Low-Emissions Development Strategy (LT-LEDS) to the UNFCCC, alongside a
suite of updated sectoral policies and institutional mechanisms, signals a decisive shift toward
a coordinated, whole-of-economy low-carbon transition.
1.4.1 Policy Evolution
India’s policy and institutional architecture has unfolded in phases over the past two decades.
What began as a set of co-benefit–oriented strategies has gradually expanded into a
comprehensive framework that integrates long-term climate goals with economic development
priorities (Figure 1.8). Scenarios Towards Viksit Bharat and Net Zero: An Overview 16
India’s Energy, Economy, and Climate-The Current Landscape
Phase I (2008–2015):
Co-benefits Framing
India’s early climate actions were embedded in development programs and presented as win-win “co-
benefits.” This approach underpinned India’s voluntary pledge at Copenhagen (2009) to reduce the emission
intensity of its GDP by 20–25% by 2020 (compared to 2005 levels), avoiding absolute emission caps that
might hinder growth. Central to this was the National Action Plan on Climate Change (NAPCC), launched in
2008, which, through eight National Missions, provided a foundational structure for sectoral mitigation and
adaptation goals. The missions spanned solar energy, enhanced energy efficiency, sustainable habitat, water,
sustainable agriculture, Green India (forests), the Himalayan ecosystem, and strategic climate knowledge.
Several of these missions, particularly on water, agriculture, forests, and the Himalayas were explicitly aimed
at strengthening adaptive capacity and climate resilience of communities and ecosystems.
This strategic phase culminated on October 2, 2015, when India submitted its ambitious Intended Nationally
Determined Contribution (INDC). During this phase, climate initiatives (such as solar and efficiency missions
and the Perform, Achieve and Trade scheme for industries) were aligned with national development priorities
rather than standalone climate mandates.
Phase II (2015–2020): International Alignment.
Following the Paris Agreement (2015), India’s climate strategy evolved from a purely domestic “co-benefits”
approach to one of active global leadership. While development remained a priority, the narrative shifted
towards undertaking bold climate commitments consistent with national circumstances. This phase is defined
by India spearheading international institutions—the launch of the International Solar Alliance (ISA) in 2015
and the Coalition for Disaster Resilient Infrastructure (CDRI) in 2019, reflecting a stronger focus on adaptation
and resilient infrastructure. Domestically, the action plan expanded beyond the original eight missions of
NAPCC; the National Mission on Climate Change and Human Health was operationalised, State Action Plans
were aligned with India’s NDC, and other high-ambition initiatives were launched.
Overall, this phase demonstrated India’s alignment of domestic policy with global commitments, with notable
overachievement that projected confidence internationally, while continuing to emphasise disaster-resilient
development and protection of vulnerable communities.
Phase III (2021–present):
Net Zero Framing.
This marks the transition from voluntary goal-setting to high-ambition targets. The period began with the
announcement of the “Panchamrit” at COP26 in November 2021, including India’s commitment to reach Net
Zero by 2070, which was subsequently translated into the Updated NDC (2022) mandating a 45% reduction
in GDP emission intensity by 2030 and 50% non-fossil fuel power capacity. The Long-Term Low Carbon
Development Strategy (LT-LEDS) and the launch of Mission LiFE – Lifestyle for Environment (2022) together
broadened India’s approach, linking structural low-carbon growth with behavioural change and sustainable
consumption.
Unlike previous phases that relied heavily on public funding, Phase III focused on creating self-sustaining
market mechanisms and new industrial pathways. The National Green Hydrogen Mission (2023) and the
Carbon Credit Trading Scheme (CCTS) became central instruments for transforming hard-to-abate sectors
and establishing a domestic carbon market. By 2025, the strategy had shifted from merely “seeking co-
benefits” to “decoupling growth from emissions” through deep structural reforms in energy and industry.
Climate is an integral part of India’s developmental pathway. Building adaptive capacity across all segments
of society and the economy is fundamental to safeguarding livelihoods and growth, even as India mitigates
emissions and fulfils its international commitments.
India’s policy landscape as of 2025 reflects this balanced approach, where development, resilience and low-
carbon transition advance together.
Figure 1.8: Phases of policy evolution Scenarios Towards Viksit Bharat and Net Zero: An Overview 17
India’s Energy, Economy, and Climate-The Current Landscape
The narrative has thus shifted from viewing climate action only as a co-benefit to recognising
it as an important dimension of India’s development strategy. India’s policy landscape in 2025
is defined by this bold long-term vision of achieving Net Zero emissions by 2070, anchored in
nearer-term green growth initiatives and integrated sectoral planning.
1.4.2 Sector-specific Policy Levers
India’s climate policy is anchored in sectoral strategies that blend regulatory mandates, market
mechanisms, and financial incentives. The Long-Term Low-Emissions Development Strategy
(LT-LEDS, 2022) provides the base architecture, identifying long-term options for low-carbon
growth while noting the need for iterative policy strengthening as technologies mature and
costs decline. In practice, each sector has become a laboratory of policy innovation, where India
continues to balance growth and climate goals.
Low-carbon development of electricity systems
The power sector is at the heart of India’s emissions pathway. With nearly half of its installed
capacity already sourced from non-fossil fuel sources, the country is ahead of its Nationally
Determined Contribution (NDC) milestones. This progress reflects a carefully layered mix of
mandates, incentives, and infrastructure programs, reinforced by proactive state-level leadership
(Figure 1.9).
National frameworks are complemented by ambitious state policies that adapt renewable
strategies to local contexts. Scenarios Towards Viksit Bharat and Net Zero: An Overview 18
India’s Energy, Economy, and Climate-The Current Landscape
NATIONAL LEVEL POLICIESSTATE LEVEL POLICIES
Renewable Consumption Obligations (RCOs)
• Mandates DISCOMs, open access consumers, and
captive generators to obtain a defined share of
their electricity from renewable sources. Targets
are specified for each year, with values increasing
incrementally through 2030 (43.3%).
Domestic Solar PV Manufacturing (PLI Scheme)
• Total outlay of INR 24,000 crore for high-efficiency
modules to set up domestic manufacturing capacity
of 65 GW per annum.
Technology-Specific Policies
• National Wind-Solar Hybrid Policy (2018): maximize
land/network use
• National Offshore Wind Policy (2016): exploration &
leasing
• PM Surya Ghar (2024): 1 crore homes, 30 GW of
rooftop capacity, model solar village
• PM-KUSUM (2019): 34.8 GW by 2026; >8 lakh solar
pumps
• National Programme on Advanced Battery Storage:
PLI outlay of INR 18,100 crores, aims to establish a
manufacturing capacity of 50 GWh of ACCs and 5
GWh for niche ACC technologies.
• Battery Storage Policy: VGF; RE+storage in SECI
auctions
Gujarat Renewable Energy Policy (2023)
• INR5 lakh crore across solar, wind, hybrid, offshore,
WtE
• Surya Gujarat rooftop program expansion
Andhra Pradesh Integrated Clean Energy Policy (2024)
• 160 GW renewables and pumped storage
• Focuses on Decarbonisation, Decentralisation,
Digitalization and Democratization of power sector
Rajasthan Integrated Clean Energy Policy (2024)
• 125 GW by 2030 (90 GW solar, 25 GW wind/hybrid,
10 GW hydro+storage)
• Rajasthan Biomass and Waste to Energy Policy
(2023)
Tamil Nadu Wind Repowering Policy (2024)
• Replace old small turbines with modern large ones
• Promote hybrid solar–wind facilities
Kerala Decentralized Solar Policy (2025)
• Community-driven clusters and P2P trading
• Builds prosumer networks, local resilience
Uttarakhand Policy for Power Generation from
Biomass–2018
• 100 MW by 2030
Uttarakhand Solar Energy Policy 2023
• 25OO MW in the state by December 2027
• SHANTI Act: Emphasizes fuller use of indigenous
nuclear resources and active public-private
participation, target of 100GW capacity by 2047
Grid Modernization & Market Enablers
• National Smart Grid Mission (2015): smart meters,
DR, digital tools
• Green Energy Corridors I & II: RE links across 16
states
• RDSS (2021): INR 3.04 lakh crore; AT&C loss —
12–15%
• Time-of-Day Tariffs: C&I Apr 2024; Residential Apr
2025
• Power exchanges have introduced various products
over last 15 years: TAM, DAM, G-TAM, G-DAM, RTM
and the Ancillary Services Market, to increase the
liquidity in the spot market.
Co-firing of Biomass Pellets in Coal-based Thermal
Power Plants
• For Thermal Power Plants (TPPs), 5% blend (by
weight) of biomass pellets.
Assam Integrated Clean Energy Policy- 2025
• 11,700 MW RE capacity (incl. 1,900 MW rooftop
solar).
• 3,000 MW solar manufacturing capacity.
• 2,000 MW pumped storage + 1,000 MW battery
storage.
• 2000 kTPA green hydrogen production + hydrogen
valley & giga electrolyzer factory.
Uttar Pradesh Solar Energy Policy-2022
• Aims for 22,000 MW solar by 2026-27 (14 GW utility-
scale plus rooftop/other solar); focuses on low-cost
reliable power and reduced fossil dependence.
Odisha Renewable Energy Policy 2022
• Multi-technology RE policy
Himachal Pradesh Energy Policy, 2021
• 10,000 MW additional “green energy” (hydro, solar,
other RE) by 2030
Jharkhand State Solar Policy, 2022
• 4,000 MW solar by 2027
Karnataka Renewable Energy Policy 2022–2027
• 10 GW additional RE (including up to 1 GW rooftop
solar)
Source: Government of India, Official Ministry website (detailed references in bibliography)
Figure 1.9: Power sector policies and initiatives Scenarios Towards Viksit Bharat and Net Zero: An Overview 19
India’s Energy, Economy, and Climate-The Current Landscape
Low-carbon development of transport systems
Transport contributes about 13% of India’s energy-sector emissions. Over the past five years,
policy interventions have advanced on four coordinated fronts (Figure 1.10):
i. Tightening vehicle and fuel standards to reduce tailpipe emissions,
ii. Promoting low-carbon fuels and domestic manufacturing to build energy security, and
iii. Investing in public and active mobility infrastructure to shift both people and freight
to more efficient modes.
iv. Over 29 states/UTs have implemented EV policies that include incentives, fleet
mandates to promote transport electrification.
NATIONAL LEVEL POLICIESSTATE LEVEL POLICIES
Improving Vehicle & Fuel Standards
• BS VI norms: 25% NOx cut (petrol), 68% (diesel); 82% PM
cut for diesel PVs
• Corporate Average Fuel Economy (CAFE) norms: 130 g
CO2/km (2017–22), 113 g CO2/km (2022–27).
• Vehicle Scrappage Policy: 60+ RVSFs (17 states/UTs), 75+
ATSs (12 states/UTs); OEM scrappage-linked discounts.
Mandates fitness tests for commercial vehicles >15 years
and private vehicles >20 years, scrapping failures.
Expanding Low-Carbon Fuels & Domestic Manufacturing
• National Policy on Biofuels: 20% blending by 2025–26.
• SATAT: CBG blending in CGD (1% in 2025–26 → 4%
by 2027–28),100+CBG plants operational; 500+ under
development
• National Green Hydrogen Mission: INR 496 cr mobility
pilots (2025–26) and INR 115 cr shipping pilots
• Sustainable Aviation Fuel (SAF): Mandates 1% SAF blend
for international flights from its airports starting 2027.
• Electric mobility push:
"PM E-DRIVE (2024-28): Outlay of INR 10,900, for
2W/3W, ambulances, trucks and charging stations
"Battery Swapping Policy: BaaS for 2W/3W
• Mission Electrification by Railways: ~98–99% BG electrified
by mid-2025; 100% by 2030
Infrastructural & Modal Shift
• National Rail Plan 2030: freight rail share → 45%; DFCs to
shift bulk cargo from road
• Coastal Shipping Bill (2025): Simplified regulation; coastal
& inland shipping strategy; incentivise Indian-flag vessels
• Harit Sagar Green Port Guidelines (2023): RE integration,
real-time monitoring, annual reporting; top ports
recognised
• National Transit-Oriented Development Policy, 2017
EV Policies – 29 States/UTs (mid-2025)
• Consumer subsidies, registration/tax
waivers(2W/3W/auto/e-car/e-LCV)
• 100% registration fee & road tax waiver
(majority of states)
• Fleet electrification mandates (buses, govt
fleets)
• Charging ecosystem incentives
Delhi EV Policy
• Already achieved 2,500 electric buses (~33% of
fleet)
• Focus on 2W/3W + last-mile freight
• Dense public charging network
Maharashtra EV & Innovation Push
• 467 EV start-ups (June 2025) – highest in India
• 25% bus electrification in 6 urban centres by
2025
• Highway charging every 25 km
• Target: 30% new EV registrations by 2030
Karnataka’s Clean Mobility policy (2025-30)
• Electrify all govt. vehicles, corporate fleet and
school buses by 2030; create1 lakh jobs
Haryana
• EV Policy (2022) and Haryana Registered
Vehicle Scrappage & Recycling Facility Incentive
Policy-2024
Tamil Nadu Electric Vehicle Policy (2023)
• Aim to become EV manufacturing hub; 100%
e-bus target for 2030
Figure 1.10: Transport sector policies and initiatives Scenarios Towards Viksit Bharat and Net Zero: An Overview 20
India’s Energy, Economy, and Climate-The Current Landscape
Low-carbon development of industry
Industry accounts for a significant share of India’s energy demand and emissions, with steel,
cement, chemicals, and MSMEs leading the total consumption. Over the past decade, policy
measures have focused on five broad pillars (Figure 1.11):
xi. Energy efficiency and performance benchmarking in energy-intensive industries
xii. Electrification of industrial processes and enabling access to low-carbon electricity
xiii. Adoption of alternative fuels and green hydrogen in hard-to-abate sectors
xiv. Promoting circular economy and resource recovery and
xv. Developing carbon management and trading mechanisms to incentivise emissions
reductions.
NATIONAL LEVEL POLICIESSTATE LEVEL POLICIES
Improving Energy Efficiency (EE) in Industry
• Perform, Achieve and Trade (PAT): Specific Energy Consumption
(SEC) targets for energy-intensive industries; tradable ESCerts
• Energy Efficiency Financing Platform (BEE initiative): Accelerates
energy efficiency investments by linking financial institutions with
industries/MSMEs/project developers.
• MSME cluster programmes: Boosts SME growth, productivity,
and competitiveness via firm clustering for shared resources,
infrastructure, and capacity building.
• Credit Linked Capital Subsidy and Technology Upgradation Scheme:
A 15% capital subsidy with upper cap of INR 15 Lakh→ lower
specific energy use
Expanding Low-Carbon & Alternative Fuels
• National Green Hydrogen Mission (2023): Pilots in steel, fertilisers,
refining; target 5 MMT GH₂ by 2030; ₹450 cr for steel pilots
• Green Steel Taxonomy (2024–ongoing): star rating for CO2
intensity,3–5 stars, thresholds from <2.2 t CO₂to <1.6 tCO₂/t
• GOBARdhanvi: Biogas/CBG & organic manure → industrial boilers,
cement/textiles
• Waste to Energy (WtE) & Refuse Derived Fuel (RDF) (Solid Waste
Management Rules 2016): Support for biomass pellets/bio-CNG
Circular Economy & Resource Recovery
• Steel Scrap Recycling Policy (2019) → EAF/IF route
• CPCB Co-processing (2017) → industrial waste/plastics in cement
kilns
• Draft National Resource Efficiency Policy (2019) → reuse/recycling
targets
• EPR (plastics → e-waste)
• Non-Ferrous Scrap Recycling Framework (2025–ongoing) →
secondary Al/Cu
• BIS IS 18189:2023 (LC3 cement) → ~30% emissions cut
Gujarat Green Hydrogen Policy (2024–
ongoing)
• Capex support + demand aggregation
for GH₂ in refineries/steel
• Green Open Access Regulations
(2024–ongoing): 100 kW+ industry
can procure green power with clearer
banking
Maharashtra Integrated & Sustainable
Textile Industry Policy (2023–28)
• RE embedded in textile value chain
• Solar capex subsidy up to ₹4.8 crore
or 20% (whichever lower), capped at
4 MW per unit
Odisha Renewable Energy Policy (2022):
Industrial Linkage
• Scale RE to decarbonise metals,
fertiliser, petchem
• Green Hydrogen / Green Ammonia
hub vision, leveraging ports + mineral
base
• Direct alignment with industrial
demand
Other Emerging State Actions
• RE procurement / “single window”
cells for MSMEs
• Industrial parks with WtE / common
effluent systems
• Early adoption of EPR & circularity for
industrial materials
• AMRUT / AMRUT 2.0 / FSSM (ongoing): treated wastewater +
sludge-to-biogas linking cities and industrial clusters
Carbon Management & Trading
• Carbon Credit Trading Scheme (CCTS, 2023): compliance carbon
market covering 9 sectors
• MISHTI (2024): mangrove-based offsets for coastal/port-proximate
industries
Figure 1.11: Industry sector policies and initiatives
vi GOBARdhan: Galvanizing Organic Bio-Agro Resources Dhan Scenarios Towards Viksit Bharat and Net Zero: An Overview 21
India’s Energy, Economy, and Climate-The Current Landscape
Promoting Energy and Material-Efficiency in Buildings and Urban Design
The buildings sector—a major and fast-growing source of both operational and embodied
emissions—has been identified in the LT-LEDS (2022) as a critical mitigation and adaptation
pillar. Policy evolution in this space spans four key fronts (Figure 1.12). Improving energy
efficiency; Implementing codes and standards for new construction; Managing cooling demand
and; Embedding circularity and waste recovery.
NATIONAL LEVEL POLICIESSTATE LEVEL POLICIES
Improving Energy Efficiency in Buildings
• Standards & Labelling: Minimum Energy Performance Standards
(MEPS) + star labels for 28 appliance/equipment categories; 16 now
mandatory; biggest lever for household/commercial savings
• UJALA (2015–ongoing): 370+ million LEDs through bulk
procurement & on-bill financing → large drop in residential load
• Building Energy Efficiency Programme: ESCO-style retrofits in
public/institutional/industrial buildings (lighting, HVAC, motors) with
verified savings
• BEE Star Rating for Buildings: benchmarks actual EPI (>100 kW
load) for commercial buildings → transparency + retrofit push
• Shunya Label for Net Zero Buildings (2021–ongoing): recognises
Net ero / net-positive buildings with EPI <10 kWh/m²/yr; open to all
typologies
Building Codes & Thermal Performance
• ECSBC & ECSBC-R (2024–ongoing): new codes for commercial +
large residential; add voluntary embodied-carbon disclosure → 1st
national move toward lifecycle carbon in buildings
• ECBC (2007; rev. 2017–ongoing): mandatory for large new
commercial buildings (>100 kW); 23 states/UTs notified by 2024
• Together: performance-based + material-carbon lens
Cooling, Refrigerants & Thermal Comfort
• India Cooling Action Plan (ICAP, 2019–ongoing): passive design,
high-efficiency equipment, district cooling, phasedown of high-GWP
refrigerants; links “thermal comfort for all” to mitigation
• PLI for White Goods (ACs & LED lights): 4–6% incentives on
incremental sales → domestic supply chain for efficient cooling &
lighting
Circularity
• Solid Waste Management Rules (2016, 2020–ongoing): source
segregation, collection, scientific disposal
Green Building Incentives (multiple
states)
• FAR/FSI bonus for GRIHA / LEED /
IGBC buildings
vii
• Property tax rebates for certified
green buildings
• Reimbursement of certification/
registration fees
State ECBC Notifications / Adoption
Drives
• Support to operationalise ECBC /
ECBC-R through local bye-laws
• Fast-track building permits for
energy-efficient designs
Smart City / AMRUT Convergence
• Public-building retrofits under ESCO
model
• District-cooling / common-utility
pilots in dense business districts
• Plastic Waste Management Rules (2016, 2021–22–ongoing): EPR,
single-use phase-out, recycled plastics for building products
• Swachh Bharat Mission (Urban/Gramin–ongoing): legacy waste
remediation + liquid waste management → cleaner urban land
banks for construction
Carbon Management & Trading
• Carbon Credit Trading Scheme (CCTS, 2023): compliance carbon
market covering 9 sectors
• MISHTI (2024): mangrove-based offsets for coastal/port-proximate
industries
Figure 1.12: Buildings sector policies and initiatives
vii FAR: Floor Area Ratio; FSI: Foor Space Index; GRIHA: Green Rating for Integrated Habitat Assessment; LEED:
Leadership in Energy and Environment Design; IGBC: Indian Green Building Council Scenarios Towards Viksit Bharat and Net Zero: An Overview 22
India’s Energy, Economy, and Climate-The Current Landscape
Promoting Resource Efficiency and Adaptation in Agriculture
According to the Fourth Biennial Update Report (BUR-4, 2024), agriculture contributed about
one-fifth (14%) of India’s total GHG emissions in 2020. Within this, methane (CH₄) from enteric
fermentation and manure management (~55%), rice cultivation (~17%), and nitrous oxide (N₂O)
from fertiliser use in soils (~25%), dominate the profile.
At the same time, agriculture sustains almost 45% of the India’s working population, much
of which is highly vulnerable to climate variability and water stress. Reflecting these socio-
economic realities, agricultural policy has evolved with adaptation as the primary objective,
while delivering mitigation co-benefits through productivity improvements, efficient resource
use, and climate-smart practices (Figure 1.13).
NATIONAL LEVEL POLICIESSTATE LEVEL POLICIES
Rice Cultivation & Water Management (CH₄)
• National Food Security Mission (2007): HYVs → ~14% yield rise
(2011–19) on ~44 Mha, without adding rice area
• Pradhan Mantri Krishi Sinchayee Yojana (PMKSY) (2015): micro-
irrigation, check dams, watershed → enables Alternate Wetting &
Drying (AWD) & aerobic rice
• PM-KUSUM: solar irrigation for farmers
"Comp A: decentralised RE near substations
"Comp B: standalone solar pumps (diesel replacement)
"Comp C: solarisation of existing grid pumps + export to grid
Soil Health & Nutrient Management (N₂O)
• Soil Health Card Scheme (2015): 220+ million cards → balanced
fertiliser use
• 100% neem-coated urea (2015): better N uptake, checks diversion
• National Mission on Sustainable Agriculture (2014): INM, micro-
irrigation, resilient cropping
• Paramparagat Krishi Vikas Yojana (PKVY) (2015): organic farming
clusters as low-N alternative
Livestock Productivity & Manure Management (CH₄ & N₂O)
• National Dairy Plan (2012): ~28% higher milk yield (2011–19) → lower
emission intensity
• National Livestock Mission (2014): feed, fodder, breed quality
• Rashtriya Gokul Mission (2014): improve/conserve indigenous
breeds; shift to high-yielding females
• National Biogas & Manure Management Programme (NBMMP):
biogas digesters + composting → cuts manure methane
AWD / Aerobic Rice Demonstrations
• Tamil Nadu, Karnataka, Telangana
with partners (incl. International Rice
Research Institute)
• Goal: lower water use + CH₄ in rice
Organic / Climate-Smart Clusters
• State-level PKVY cells + National
Mission for Sustainable Agriculture
(NMSA) convergence
• Farmer Producer Organisation (FPO)-
led aggregation for organic produce &
bio-inputs
• Good for hilly / tribal / rainfed areas
Livestock & Dairy Add-ons
• State Animal Husbandry and Dairying
departments supporting breed
upgradation & fodder banks
• Co-financing of household /
community biogas
• Integrates manure management with
village-level CBG pilots
Figure 1.13: Agriculture sector policies and initiatives 2
INTEGRATED
MODELLING
FRAMEWORK FOR
NET ZERO PATHWAYS 24Scenarios Towards Viksit Bharat and Net Zero: An Overview
2
Integrated Modelling
Framework for
Net Zero Pathways
India’s journey toward Net Zero emissions by 2070 is guided by a comprehensive and integrated
modelling framework that combines multiple analytical tools, stakeholder insights, and sector-
specific methodologies. This chapter presents the modelling approach adopted to construct
India’s Net Zero pathways, detailing the suite of models employed and the scenarios designed.
It is reiterated here that the underlying philosophy is that of “development first.” This exercise
seeks to understand how India can achieve its developmental goals while simultaneously
contributing to addressing the global challenge of climate change. The pathway outlined is
therefore not a “mitigation” or “decarbonisation” trajectory in isolation. Rather, it explores how
India can become a developed country in a low-carbon manner, consistent with its national
priorities, equity considerations, and the need for sustained economic growth.
The modelling framework begins by identifying the developmental objectives necessary for
India to attain developed-nation status by 2047. These include achieving a per-capita income
of over USD 18,000, ensuring high living standards, and supporting rapid urbanisation and
industrialisation through strong growth in key commodities such as steel and cement. It then
examines the developmental choices that can align these goals with long-term sustainability.
For instance, meeting a greater share of steel demand through recycled material rather than
virgin production can substantially reduce energy use and emissions. These choices, discussed
in detail in the Viksit Bharat chapter, establish the foundation for a sustainable development
trajectory.
Building on this, the modelling framework assesses the least-cost pathways for achieving Net
Zero while maintaining the integrity of India’s developmental ambitions. The resulting approach
is holistic, integrating growth, industrialisation, and environmental objectives to outline pathways
that deliver Net Zero outcomes without compromising development goals.
2.1 MODELLING APPROACH AND TOOLS USED
The integrated modelling framework approach is multi-institutional in nature, anchored by a
central modelling and coordination group in NITI Aayog. It was supported by ten Inter-Ministerial
Working Groups (IMWGs) constituted by NITI Aayog. The framework integrates bottom-up
energy system optimisation tools, macroeconomic and econometric tools, and sector-specific
Excel-based models into a soft-linked environment, (Figure 2.1). Each tool serves a specialized
function and interfaces with others to enable a comprehensive, system-wide assessment of
India’s long-term low-carbon growth trajectory. Scenarios Towards Viksit Bharat and Net Zero: An Overview 25
Integrated Modelling Framework for Net Zero Pathways
*Agriculture (Excel Calculator),
Waste (Excel Model)
IESS - India Energy Security Scenario 
TIMES - The Integrated MARKAL EFOM System 
CGE - Computable General Equilibrium
Macroeconomic 
assumptions 
(GDP, population 
and urbanization)
End-use 
Sectoral 
Demand
IPPU, Waste 
and 
Agriculture
Other
Models*
Energy
Non-Energy
Energy mix. 
Emissions
Impact on 
Macro-
economic 
parameters 
(GDP, Trade, 
Employment)
CGE
IESS 2070 
Scenario 
building by 
supply-demand 
balancing
TIMES
Least Cost 
Optimization
Pathways
Energy Sector Models
ORDENA/TIMES 
Technology-rich Optimization
Power Sector Models
Figure 2.1: Modelling framework for transition pathways
The modelling framework (Figure 2.1) integrates multiple sectoral models into a unified system
that links India’s development trajectory with its Net Zero pathways. The framework begins
with macroeconomic trajectories generated using the Long-Term Growth Model (LTGM), which
incorporates the objective of becoming Viksit Bharat by 2047 as well as demographic and
sectoral changes envisaged under Viksit Bharat. The macroeconomic inputs, namely GDP,
Population, Urbanisation and Sectoral shares, are then fed into Energy and Non-Energy models to
estimate future demand. The Energy Sector Models are further disaggregated between end-use
sectors, namely transport, buildings, industry, and agriculture, ensuring a granular representation
of both demand and efficiency improvements. Energy models first estimate the useful energy,
such as demand for commodities (Steel, Cement, etc.) and then use optimisation and scenario
tools to generate energy supply outputs. Electricity demand estimated from Energy Models
serves as an input to the Power Sector Model, which identifies least-cost pathways consistent
with development priorities and emissions targets.
The Non-Energy Sector Models simultaneously evaluate emission reduction opportunities in
agriculture, waste, industrial processes, and land use. The outputs from all models are then
integrated to synthesise sectoral pathways, technology choices, and mitigation options to deliver
an economy-wide trajectory consistent with India’s development goals and its commitment to
achieve Net Zero emissions by 2070.
The results from the integrated model, especially on energy mix and investment need, are
then fed into the Computable General Equilibrium (CGE) Model to assess the macroeconomic
implications. This includes estimating the impact on GDP, the structure of GDP, Public finances,
Employment and Trade. The subsequent section provides detailed descriptions of each model
within the framework. Scenarios Towards Viksit Bharat and Net Zero: An Overview 26
Integrated Modelling Framework for Net Zero Pathways
I. Long-Term Growth Model for GDP Trajectory
The modelling architecture begins with the formulation of a long-term GDP trajectory using
the Long-Term Growth Model (LTGM), which is a transparent and widely used macroeconomic
tool for projecting long-run GDP per capita growth and its implications for poverty reduction.
Based on an enhanced Solow-Swan
viii
framework, it incorporates country-specific factors such
as human capital, demographics, investment, and total factor productivity. Used in over 50
countries, the LTGM supports analysis of structural reforms, debt sustainability, and long-term
development. This modelling exercise enables consistent projections of India’s potential growth
and ensures alignment with sectoral models.
A reference macroeconomic growth trajectory, aligned with the Government of India’s Viksit
Bharat 2047 vision, is adopted to ensure consistency in underlying assumptions across all
models. This projection is based on assumptions related to capital formation, labour force
expansion, productivity improvements, and structural transformation of the economy (discussed
in Viksit Bharat). The resulting GDP trajectory informs downstream estimates of energy demand,
emissions, and technology transitions, forming a robust foundation for simulating India’s Net
Zero pathways.
II. Energy Models for Energy and Emissions Trajectory
India’s economic structure comprises a range of critical sectors, such as transport, buildings,
industry, agriculture, and services, that are central to long-term growth and development. These
sectors not only drive economic output but also represent the primary sources of energy
demand. Their expansion is intrinsically linked to macroeconomic trends, including GDP growth,
population increase, urbanisation, and structural transformation.
To accurately project future energy requirements, each sector is modelled individually using
tailored methodologies and activity indicators relevant to its operations. These sectoral demand
models, discussed in detail in the subsequent chapter, collectively determine the final energy
demand of the economy. On the supply side, energy sources are modelled to meet this
demand in the most cost-effective and technologically feasible manner, while adhering to India’s
commitment to achieve Net Zero greenhouse gas emissions by 2070.
To undertake this integrated demand and supply modelling (as shown in Figure 2.2), two
complementary tools developed in-house by NITI Aayog were used, with major stakeholders
providing inputs and feedback to inform the modelling assumptions and datasets. These include:
i. TIMES (The Integrated MARKAL-EFOM System): TIMES is an optimisation-based
bottom-up energy system model that identifies the least-cost pathways to meet
projected energy-service demands under given resource constraints and policy goals.
It evaluates a broad range of technology and fuel options to determine how India’s
energy system can evolve. TIMES is particularly suited for long-term scenario planning,
supporting the comparison of alternative pathways such as the Current Policy Scenario
(CPS) and the Net Zero Scenario (NZS).
ii. IESS (India Energy Security Scenarios): IESS is a policy-simulation tool developed by
NITI Aayog. It enables users to explore how various policy choices and technology
viii Solow-Swan framework: A neoclassical growth model in which long-term growth is driven by technological
progress rather than merely by more capital or labour. Scenarios Towards Viksit Bharat and Net Zero: An Overview 27
Integrated Modelling Framework for Net Zero Pathways
pathways could influence India’s energy system over time. IESS is designed for
transparency and user interaction, allowing real-time assessment of how policy shifts
affect energy demand, supply, emissions, and sectoral performance. It is particularly
useful for testing potential impacts of future policy interventions.
Both TIMES and IESS models are harmonised to ensure internal consistency and are
used jointly to construct the Current Policy Scenario (CPS) and the Net Zero Scenario
(NZS) for this modelling exercise.
 
 
 
 
 
 
 
 
Production + Import
– Export
 
 
Future fuel and technology prices, existing infrastructure, 
deployment constraints, policies
Macroeconomic drivers (GDP, Population, Urbanization)
Import
Electricity, 
Coal, Oil & 
products, 
Natural gas
 
 
Export
End-use demand
Electricity,
Coal,
Oil & products,
Natural gas
Export
Electricity,
Coal,
Oil products,
Natural Gas,
Biofuels,
Hydrogen and 
derivatives
Coal-based 
Gas-based
Hydropower
Nuclear
Solar
Wind
Biomass
Waste to electricity
Energy Storage
Supply-sideDemand-side
Resources
and
Potenals 
Primary Energy
Supply
Power Sector 
Module
Fossil Fuels
• Coal
• Oil
• Gas
Non-fossil
• Wind
• Hydro
• Solar
• Biofuel
• Nuclear
Energy Emissions
Conversion to 
Secondary Fuel
Final Energy Consumption
Agriculture
•  Pumping
•  Land preparation
Commercial
• Diferent building 
categories such as 
Hotels, Hospitals etc.
Residential 
•  All Appliances such 
as ACs, Lights, Fan, 
etc.
Transport
•  Passenger km
•  Tonnes km
Industry
•  Iron & Steel, Aluminium, 
Cement, Paper, 
Fertilizer, Textile, 
Chemicals, others
Cooking
•  Heat Energy required 
for cooking
Figure 2.2: Energy model structure (demand-supply balance)
iii. Power Sector Models: Detailed power sector models have been developed by NITI
Aayog (TIMES Power Model) and the Central Electricity Authority (ORDENA) to project
future capacity expansion, generation mix, and the requirement for flexibility resources
such as energy storage systems. The aggregate electricity demand estimated from
the integrated energy models for each sector is provided as input to these detailed
power-sector models.
These models are technology-rich, containing unit-level information on thermal power
plants, and feature a high temporal resolution of 288 time slices to capture hourly
and seasonal variations in load and renewable energy generation. Modelling on these
platforms is carried out using consistent electricity demand assumptions, and the
results are harmonised to ensure alignment in both capacity expansion and generation
mix outcomes.
 
 
 
 
 
 
 
 
Production + Import
– Export
 
 
Future fuel and technology prices, existing infrastructure, 
deployment constraints, policies
Macroeconomic drivers (GDP, Population, Urbanization)
Import
Electricity, 
Coal, Oil & 
products, 
Natural gas
 
 
ExportEnd-use demand
Electricity,
Coal,
Oil & products,
Natural gas
Export
Electricity,
Coal,
Oil products,
Natural Gas,
Biofuels,
Hydrogen and 
derivatives
Coal-based 
Gas-based
Hydropower
Nuclear
Solar
Wind
Biomass
Waste to electricity
Energy Storage
Supply-sideDemand-side
Resources
and
Potenals 
Primary Energy
Supply
Power Sector 
Module
Fossil Fuels
• Coal
• Oil
• Gas
Non-fossil
• Wind
• Hydro
• Solar
• Biofuel
• Nuclear
Energy Emissions
Conversion to 
Secondary Fuel
Final Energy Consumption
Agriculture
•  Pumping
•  Land preparation
Commercial
• Diferent building 
categories such as 
Hotels, Hospitals etc.
Residential 
•  All Appliances such 
as ACs, Lights, Fan, 
etc.
Transport
•  Passenger km
•  Tonnes km
Industry
•  Iron & Steel, Aluminium, 
Cement, Paper, 
Fertilizer, Textile, 
Chemicals, others
Cooking
•  Heat Energy required 
for cooking
Fuel Mix Scenarios Towards Viksit Bharat and Net Zero: An Overview 28
Integrated Modelling Framework for Net Zero Pathways
III. C GE model for Macroeconomic Implications
To assess the broader economic implications of India’s energy transition, a Computable General
Equilibrium (CGE) model, developed jointly by NITI Aayog, the World Bank, and National Council
of Applied Economic Research (NCAER), is employed. The model evaluates economy-wide
impacts such as changes in GDP, sectoral output, employment, household welfare, and trade
balances.
The outputs of the energy system model are fed into the CGE framework to assess the
implications of the Net Zero pathway on key macroeconomic indicators, including fiscal deficit,
current account deficit, public debt, fossil fuel tax revenues, and the fuel import bill. This
model is explained in detail in the report on Macroeconomic Implications of Energy Transition
(Volume 2).
IV. Non- Energy Models for Agriculture and Waste
To capture emissions beyond the energy sector, dedicated Excel-based models were developed
to estimate non-energy Greenhouse Gas (GHG) emissions, particularly from the agriculture and
waste sectors. These models, developed in partnership with Council on Energy, Environment
and Water (CEEW) and ICLEI-Local Governments for Sustainability South Asia, respectively, use
sector-specific methodologies consistent with IPCC inventory guidelines and are calibrated to
India’s Biennial Update Report (BUR) data.
The agriculture model covers emissions from enteric fermentation, rice cultivation, manure
management, soil management, and agricultural residue burning, while the waste model
estimates emissions from municipal solid waste and wastewater (industrial and domestic). The
resulting estimates are integrated into the overall GHG trajectory to ensure completeness and
consistency across sectors.
Other Tools Used for Complementary Analysis: In addition to the core modelling frameworks,
sector-specific Excel-based tools were developed to support targeted analyses essential for
Net Zero planning. These included models to estimate finance requirements and critical mineral
demand for technologies such as batteries and solar photovoltaics (PV) systems. Together, these
tools provided granular, decision-relevant insights to inform investment strategies, technology
prioritisation, and policy design.
2.2 DESIGNING INDIA’S PATHWAY TO NET ZERO EMISSIONS
There is no single approach to achieving Net Zero emissions. External shocks are inevitable,
economic conditions and energy prices will fluctuate, and policies and technologies may perform
better or worse than anticipated. While many affordable clean energy technologies can already
be implemented with supportive policies, India’s transition will also depend on how successfully
emerging low-emission technologies such as carbon capture, green hydrogen, and advanced
energy-storage systems are demonstrated, commercialised, and scaled globally.
International market developments and renewable energy trends will also influence India’s
energy security and low-carbon growth trajectory, given that it is one of the world’s largest
energy consumers and importers of fossil fuels.
India’s Net Zero journey must reflect its national circumstances: relatively low per capita energy
consumption (about one-third of the global average), a high use of coal in electricity generation, Scenarios Towards Viksit Bharat and Net Zero: An Overview 29
Integrated Modelling Framework for Net Zero Pathways
regional disparities in economic and energy development, and the imperative to lift millions out
of energy poverty.
India’s vast renewable energy potential, especially solar, wind, small hydro, and bioenergy, offers
major opportunities for large-scale clean energy expansion. However, this must be achieved
while ensuring affordability, reliability, and inclusive growth. The objective of this analysis is
not to prescribe a single definitive route to Net Zero, but to present a feasible and adaptive
pathway that is:
i. Anchored in India’s developmental needs and energy sector realities across states and
regions.
ii. Aligned with global market shifts and technology evolution.
iii. Flexible enough to accommodate uncertainties in energy demand growth, investment
flows, and sectoral transitions.
What follows is a scenario-based outline of how India could achieve economy-wide Net Zero
emissions by 2070, consistent with the country’s Long-Term Low Emissions Development
Strategy (LT-LEDS). It presents key modelling assumptions, sectoral emissions trajectories, and
transition dynamics across energy supply and end-use sectors, with a focus on balancing low-
carbon growth, and equity.
Base year
The analysis adopts 2023 as the base year, with all available empirical data calibrated and
validated against this reference year. Forward-looking projections are undertaken for the period
post-2023 through 2070, with the modelling horizon commencing in 2025 and results captured
at five-year intervals. As data availability varies across sectors, in sectors such as industry and
buildings, comprehensive datasets for 2023 are not consistently available; 2020 is used as a
reference year for presenting historical data to ensure consistency of results across all sectors
and alignment with reported emissions.
The first projection year is 2025, and accordingly, model outputs are presented from 2025
onward. Results for 2050 are included to assess progress toward development goals and 2070
results represent the long-term Net Zero outcome. In sectors where more recent empirical data
are available, such as the power sector, observed data for 2025 are also presented to enable
direct comparison between actual outcomes and modelled trajectories.
Scenario Design:
The study examines India’s transition through two principal scenarios: the Current Policy Scenario
(CPS) and the Net Zero Scenario (NZS).
i. Current Policy Scenario (CPS): The Current Policy Scenario represents a level of effort
that is realistically achievable based on historical trends and continuation of current
policies (as of 2023), thereby projecting ongoing trends in low-carbon technology
deployment.
ii. Net Zero scenario (NZS): The NZ scenario reflects an ambitious pathway aligned with
India’s commitment to achieve Net Zero GHG emissions by 2070. It incorporates both
existing and additional policy measures to accelerate demand electrification, enhance Scenarios Towards Viksit Bharat and Net Zero: An Overview 30
Integrated Modelling Framework for Net Zero Pathways
circularity, improve energy efficiency, promote the rapid development of low-carbon
technologies/fuels and encourage behavioural shifts.
Each energy and non-energy sector-transport, buildings, power, industry, agriculture, and waste-
is modelled using sector-specific methodologies designed to accurately project activity levels,
consumption patterns, and emissions. Detailed descriptions of these methodologies are provided
in the respective subsections of the following chapter, while comprehensive assumptions and
modelling approaches are documented in the full Sectoral Working Group reports. All model
results are calibrated to 2020 and 2022 data, with 2025 as the first projection year, and are
further refined wherever updated data from Ministry reports are available, such as for the
electricity sector. Accordingly, results are presented for both 2020 and 2025.
Limitations of the Analysis
The results presented in this report are derived from a scenario-based economy-wide energy
climate modelling framework. As with all long-term system models, the findings are subject to
underlying assumptions and methodological constraints. This section briefly summarises the
key limitations of the analysis and clarifies how these should be considered when interpreting
the results.
i. Deterministic Modelling Approach: The current analysis is deterministic and relies on a
transparently defined set of assumptions on GDP growth, fuel prices, technology costs
and fuel prices. While these assumptions are grounded in the best available evidence
at the time of analysis, actual future outcomes may diverge from these estimates.
Accordingly, the results should be interpreted as two plausible scenarios or estimates
of the future, rather than predictions. The findings are indicative and contingent on
specific modelling choices, rather than definitive or exhaustive. However, given the
comprehensive stakeholder consultation with line ministries, various think tanks,
research bodies and academia, there is high confidence in the directionality and
insights indicated. Readers should not focus on specific numbers but rather the trends
for future directions.
ii. Uncertainty from breakthrough technological change: The model is built based on
currently available technologies and a set of emerging technologies that are already at
an identifiable stage of development, demonstration and early deployment. Completely
new breakthrough technologies or paradigm-shifting innovations that may emerge
over the long term are not represented, which means future pathways could diverge
significantly if such technologies materialise at scale.
iii. Bi-directional linkage of energy–economy: The framework applies a single, one-
way coupling approach. A long-term growth model generates GDP projections,
from which activity levels and energy demand in end-use sectors are derived, and
the macroeconomic and social implications of the resulting energy and investment
pathways are then assessed. While these macroeconomic outcomes may influence
GDP and the structure of the economy, an iterative coupling process where revised
GDP is used again to estimate energy demand and the least-cost supply mix, was
not undertaken in this analysis. Instead, the baseline GDP structure was retained to
maintain consistency across modelling steps, with the understanding that such iterative
refinement could be explored in future work. Scenarios Towards Viksit Bharat and Net Zero: An Overview 31
Integrated Modelling Framework for Net Zero Pathways
iv. Linkage of land, water, and energy: Land and water requirements of energy transition
are estimated ex-post for the chosen pathways, rather than emerging endogenously
from a fully coupled Climate-Land-Energy-Water (CLEW) optimisation framework.
v. As a result, there is no explicit feedback loop in which land and water availability,
competition with other uses, or related environmental constraints reshape energy
pathways. Thus, key trade-offs, co-benefits, and system-wide co-optimisation across
these domains remain only partially explored.
vi. Spatial Granularity: The analysis provides a coherent national-level pathway that can
guide the overall direction of state strategies, but it does not capture state-specific fuel
and resource endowments, policy settings, or demand patterns. Consequently, detailed
state-level planning will need separate, higher-resolution assessments that reflect local
economic structure, infrastructure constraints, and climate and weather conditions.
vii. Infrastructure requirement: The modelling exercise does not endogenously represent
infrastructure build-out, such as transmission and distribution grid expansion or
supporting road-rail logistics; instead, grid investment needs are estimated exogenously
using simplified cost assumptions. This can understate spatial and timing constraints,
overlook bottlenecks that affect technology deployment and system reliability. This may
misrepresent the macro-economic effects of large-scale infrastructure programmes,
including employment, regional development and crowding-in of private investments.
viii. Impact of cross-border trade and international carbon policies: The model does
not represent the dynamics of international commodity trade such as Carbon Border
Adjustment Mechanism (CBAM)-like policies, Free Trade Agreement (FTA) negotiations,
etc. As a result, risks to export volumes, terms of trade, and sectoral restructuring
pressure arising from carbon-constrained and geopolitically volatile markets are not
quantified within the modelling framework.
Future Enhancements
Future enhancements to this study could focus on systematically addressing these limitations by:
incorporating explicit uncertainty analysis around key drivers (GDP, technology costs, fuel prices)
and using integrated modelling of multiple model types for strengthening bi-directional energy-
economy linkage through iterative coupling with macro-economic models; and progressively
moving towards integrated CLEW-type formulations where land and water constraints feed
back into or co-optimised with energy choices.
This study in future can expand the technology database and scenario design to explore
disruptive and breakthrough options. Further, higher spatial and temporal resolution in the
power sector, endogenous representation of infrastructure expansion, and explicit modelling of
cross-border commodity and energy trade under alternative carbon policy regimes would help
capture regional heterogeneity, operational constraints and trade-related transition risks more
robustly.
Overall, this analysis is intended as a living document, to be periodically revisited and refined
as new data, policies, and technologies emerge. Continuous improvement of the modelling
framework will support more adaptive, resilient, and realistic planning as India advances towards
its Net Zero objectives. 3
FRAMING INDIA’S
CENTURY—THE VIKSIT
BHARAT VISION
& SUSTAINABLE
PATHWAYS 34Scenarios Towards Viksit Bharat and Net Zero: An Overview
3
Framing India’s
Century—The Viksit
Bharat Vision &
Sustainable Pathways
Viksit Bharat is a forward-looking vision laid down by the Hon’ble Prime Minister for India’s
transformation into a developed nation by 2047 and become a USD 30 Trillion economy.
Beyond economic targets, it envisages a future India based on inclusive growth, improved
living standards, a competitive economy, robust infrastructure, and technology and innovation
leadership. It also targets progress across social indicators such as life expectancy, education,
and skills. This journey is not just about expanding output; it marks a fundamental transformation
in how India produces, consumes, and grows. This shift will profoundly reshape key sectors,
including urban development, transport, industry, and buildings.
3.1 HARNESSING INDIA’S STRATEGIC ENDOWMENTS
1. Demographic Dividend
With a population exceeding 1.4 billion and a median age of 28, India remains one of the youngest
nations, a demographic trend expected to last until the mid-2050s (Ministry of Finance, 2025).
This provides a significant edge in becoming the global supplier of human capital. With more
than 2 million Science, Technology, Engineering and Mathematics (STEM) graduates annually,
and the third-largest startup ecosystem
ix
, India is well-positioned to lead the global digital and
innovation workforce.
2. Future-ready digital infrastructure
In 2009 only 17% of Indian adults had a bank account and 15% accessed digital payments. Today,
India has over 1 billion Aadhaar-linked identities; tele-density exceeds 90%; and, more than 6
billion monthly digital transactions take place through the Unified Payment Interface (UPI). A
Bank for International Settlements (BIS) study notes that India achieved in one decade the
level of financial inclusion that took many other economies nearly 50 years. Initiatives such as
COVID Vaccine Intelligence Network (Co-WIN), DigiLocker – digital document storage platform
(DigiLocker), Open Network for Digital Commerce (ONDC), and Open Credit Enablement
Network (OCEN) exemplify India’s Digital Public Infrastructure (DPI) leadership (Ministry of
Finance, 2025).
3. Technology-Driven Governance
Reforms in tax administration (for example, the GSTN and faceless assessments), business
facilitation (including single-window clearance and the UMANG app), and real-time public
ix https://www.pib.gov.in/PressReleasePage.aspx?PRID=2085956 Scenarios Towards Viksit Bharat and Net Zero: An Overview 35
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
service delivery have created a transparent, digital-first, and citizen-centric governance model.
These measures have significantly improved the ease of doing business and enhanced efficiency
in public resource use (Economic Survey, 204-25).
4. Strong and Empowered Private Sector
Since 2014, the government has recognized and encouraged private sector dynamism. Reforms
such as the disinvestment of Air India, the Insolvency and Bankruptcy Code (IBC), decriminalization
of business laws, asset monetisation, and reduction in tax rates have strengthened investor
sentiment and entrepreneurial confidence. The Production Linked Incentive (PLI) schemes aim
to develop global leaders in sectors such as electronics, pharmaceuticals, automobiles, textiles,
and green technologies (Economic Survey, 2024-25).
5. Rich Renewable Energy Potential
India is richly endowed with renewable energy resources particularly solar and wind. This clean-
energy foundation strengthens energy sovereignty and can support India’s industrial transition,
clean mobility future, and climate leadership.
6. Global Indian Diaspora
India’s diaspora of over 30 million people, the world’s largest, serves as a bridge to global
finance, innovation ecosystems, and soft power. Leveraging this diaspora for knowledge transfer,
capital flows, and diplomatic engagement will be critical in the journey toward Viksit Bharat.
Together, these endowments create the capacity in talent, technology, governance, and
investment appetite on which the Viksit Bharat strategy is built. The narrative recognizes India’s
structural strengths, its demographic advantage, digital infrastructure, entrepreneurial energy,
and renewable energy potential. It also acknowledges the challenges ahead: rapid urbanisation,
resource constraints, climate risks, and the need for large investments in infrastructure and
human capital.
By anchoring the analysis in the Viksit Bharat vision, this report sets the for a policy framework
that is both ambitious and grounded in India’s realities. The vision serves as the unifying context
for all subsequent analysis and policy recommendations, ensuring that every pathway and
action aligns with India’s long-term development goals. With the vision and endowments now
defined, the next step is to translate Viksit Bharat into actionable policy pathways that turn
capacity into outcomes.
3.2 FROM ASPIRATION TO ACTION- TRANSLATING THE VIKSIT
BHARAT VISION INTO POLICY PATHWAYS
To graduate into the ranks of high-income nations by 2047, India must sustain real GDP growth
of over 7% per year for over 20 years, a goal that is achievable through targeted reforms that
enhance productivity and inclusivity.
1. From Labour Surplus to a Productivity Powerhouse
A central challenge for India is to convert its demographic advantage into a workforce advantage.
Today, only 5–7% of the working-age population has received formal skills training. For a Viksit Scenarios Towards Viksit Bharat and Net Zero: An Overview 36
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
Bharat, this share must converge with global peers like South Korea or Germany, where over
70% of the workforce receives structured vocational training.
A developed India will be one where all citizens participate meaningfully in the economy.
Increasing labour force participation, especially among women, is essential not only as a matter
of equity but also as a growth imperative. Raising female labour-force participation to the
levels seen in high-income economies (about 70%) would enhance productivity, household
income, and consumption. Expanding formal employment, vocational training, and reskilling
programmes for youth and mid-career workers will help maintain a globally competitive
workforce. India’s aspiration to lead in skilled manpower must be matched by universal access
to skill infrastructure, industry-aligned curricula, and pathways for upward mobility.
2. Manufacturing-led Structural Transformation
India’s economic structure remains skewed toward low-productivity agriculture. The path to
Viksit Bharat necessarily involves industrial deepening, particularly in manufacturing. By boosting
the share of manufacturing in GDP, India can absorb surplus rural labour, diversify exports, and
move up the global value chain.
Recent policy efforts, including the Production Linked Incentive (PLI) schemes and the National
Manufacturing Mission, aim to make India a competitive manufacturing base in sectors such
as electronics, semiconductors, pharmaceuticals, automotives, and textiles. Technological
advancement will accelerate total factor productivity (TFP), driven by greater adoption of clean
energy and digital innovation.
3. Integrated Urban Growth and Infrastructure
India’s cities will be the fulcrum of future economic growth. By 2047, India could see many urban
agglomerations with GDPs exceeding USD 50 billion each. These cities must be supported
by robust public services, multimodal transport, and sustainable infrastructure. Innovations in
housing, sanitation, waste management, and mobility combined with greater governance reform
in urban local bodies will improve the quality of life for most of India’s population.
4. Improving and Expanding Healthcare
A Viksit Bharat must also be a healthy Bharat. By 2047, India envisions a society where healthcare
is accessible, affordable, and preventive. Achieving this requires a full-spectrum transformation:
from reducing maternal and infant mortality to strengthening primary healthcare, and reforming
health financing and workforce systems.
India will need to converge with global health benchmarks on indicators such as life expectancy,
infant mortality rate (IMR) and under-five mortality, matching levels seen in OECD countries.
Reducing out-of-pocket expenditure (OOPE) to below 20%, in line with global norms, will be
essential.
India must also focus on non-communicable diseases through lifestyle changes and expand
elderly-care facilities to address the demographic transitions in a Viksit Bharat.
5. Education Systems for the Future
A developed India cannot happen without an educated India. The road to 2047 envisions a system
in which every child enters school, stays in school, and thrives in school. The universalisation Scenarios Towards Viksit Bharat and Net Zero: An Overview 37
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
of school education from foundational to secondary levels must ensure 100% enrolment and
retention supported by gender equity, National Education Policy (NEP) aligned pedagogy, and
digitally connected classrooms.
Beyond school, India must expand higher education. The NEP 2020 targets a gross enrolment
ratio (GER) of 50% by 2035, consistent with developed country benchmarks. Strengthening
research, innovation, and entrepreneurship ecosystems within universities will transform youth
from job seekers to job creators.
Enrolment in vocational education such as ITIs, polytechnics, and short-cycle programmes must
also expand, offering diverse and industry-aligned pathways promoting employability. Reducing
dropout rates at secondary and higher-secondary levels will ensure smoother transitions to
productive employment.
Literacy must become foundational, not just formal, extending to digital literacy, financial literacy,
and employability skills for all age groups. Driven by such investments, India’s Human Capital
Index (HCI) is expected to converge with global benchmarks.
6. Global Value Chain Expansion and Export Diversification
A Viksit Bharat will be embedded in global markets not just as a supplier of raw materials
or services, but as a key node in sophisticated value chains. India must expand its share of
intermediate goods exports, especially in pharmaceuticals, chemicals, electronics, and textiles,
through logistics improvements, trade facilitation, and R&D support.
Developing integrated manufacturing hubs, negotiating free-trade agreements (FTAs), and
offering targeted incentives can position India as a global production and innovation hub.
7. Inclusive and Just Growth
Per capita GDP alone will not define India’s development. Viksit Bharat will be a Bharat where
poverty, especially multidimensional poverty is virtually eradicated; where no child goes hungry;
and every household has access to clean cooking, safe drinking water, electricity, internet, and
modern housing.
8. Green Growth and Climate leadership
In the Union Budget 2023, the Government of India formally identified “Green Growth” as one
of the seven Saptarishi priorities for Amrit Kaal, signalling its centrality to India’s long-term
development strategy. The other priorities include – Inclusive Development, Reaching the Last
Mile, Infrastructure and Investment, Unleashing the Potential, Youth Power and Financial Sector.
The green growth agenda is not limited to emissions reduction; it aims to enable inclusive and
equitable economic transformation. This includes solarisation of agriculture, helping MSMEs
adopt low-carbon technologies, and creating green jobs in construction, mobility, and waste
management. The government’s approach seeks to ensure that the benefits of the transition
are widely shared, while vulnerable sectors and communities are supported as they shift away
from fossil-intensive pathways
India’s commitment to sustainability is deeply embedded in a civilisational ethos of living in
harmony with nature, reflected in traditional practices and Vedic philosophy that treat the
environment as a shared inheritance rather than a resource to be extracted. This cultural Scenarios Towards Viksit Bharat and Net Zero: An Overview 38
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
foundation has been reinterpreted in contemporary terms through the Prime Minister’s Mission
LiFE (Lifestyle for Environment), which promotes responsible consumption and environmentally
conscious behaviour. Launched by the Prime Minister at COP26, LiFE has since gained global
traction, including endorsements from the United Nations and the World Bank, as a scalable
and citizen-driven model for sustainability.
On the global stage, India has emerged as a strong advocate for climate equity, calling for
enhanced climate finance, a fair allocation of the remaining carbon budget, and recognition of
common but differentiated responsibilities (CBDR). Initiatives such as the International Solar
Alliance (ISA), the Coalition for Disaster Resilient Infrastructure (CDRI), and Mission LiFE reinforce
India’s leadership in shaping cooperative, sustainable, and resilient global development.
By translating the Viksit Bharat vision into actionable policy pathways, India can ensure that its
journey to developed-nation status is both inclusive and sustainable, with each reform reinforcing
long-term national goals. These policy levers operate within demographic and urbanisation
trajectories. The projections in the next section set the scale and timing of needs.
3.3 MACROECONOMIC BLUEPRINT: DEMOGRAPHY AND ECONOMIC
TRANSFORMATION
The transition from aspiration to action requires translating broad policy principles into
quantitative frameworks grounded in India’s demographic and economic realities. This section
therefore presents foundational drivers that define India’s development envelope: population
evolution, accelerating urbanisation, and macroeconomic growth. These projections establish
the scale of demand for housing, mobility, industrial goods, and energy services, the quantities
on which sectoral and energy strategies must build.
3.3.1 Demography: Population and Urbanisation
Demographic and urbanisation paths form the quantitative backdrop against which demand,
services, and infrastructure must scale. The results below directly inform macroeconomic design
and sectoral pathways.
iii. Population: India’s population is projected to peak at 1.62 billion by the mid-2060s
before stabilising and gradually declining to around 1.6 billion by 2070. The working-
age population continues to grow until 2044, giving India a demographic window of
opportunity to boost industrialisation, services, and green employment.
iv. Urbanisation: India’s urban population is projected to grow from 37% in 2023 to
65% by 2070, reshaping the built environment and infrastructure demands. The shift
presents a historic opportunity to construct modern, sustainable, and inclusive cities.
3.3.2 Macroeconomic Growth Trajectory
India’s Net Zero pathway is a development–first transition, sustaining high growth, rapid urban
transformation, and industrial upgrading while decisively pursuing low-carbon options. Scenarios Towards Viksit Bharat and Net Zero: An Overview 39
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
High-investment Growth Through 2047
The growth path is investment-led, with real GDP growth averaging 7.0% through 2047, lifting
the economy to USD 30 trillion and per-capita GDP to more than USD 18,000. This trajectory
rests on sustaining an investment rate near 34% of GDP through 2047, increase in female
labour-force participation towards high-income country benchmarks (about 70%), and human-
capital convergence towards developed-economy levels. Total factor productivity (TFP) growth
is assumed at 2.18% per year to 2035 (versus about 1.88% in 2010–2019), moderating to 1.88%
by 2047.
Financing Design is Pivotal
The run-up to 2047 is necessarily investment-heavy with grids, renewables, industrialisation,
and urbanisation dominating demand. Domestic borrowing-heavy pathways tend to raise real
rates and crowd out private capital expenditure and consumption, whereas blended or external
capital eases rate pressures, sustains investment, and keeps household demand more resilient.
Historical Analogues and India’s Starting Point
Long spells of high growth anchored in elevated investment, urbanisation, and labour reallocation,
observed in peers such as China and Indonesia, typically moderate as economies mature. India’s
large farm-to-non-farm productivity gaps and a still-rising working-age population provide room
for a similar investment-led catch-up through the 2030s–2040s, before a gradual transition
toward efficiency- and scale-driven growth.
Post-2047 trajectory. As TFP growth slows towards 0.9% by 2070, consistent with advanced-
economy convergence and the Human Capital Index (HCI) stabilises around ~0.6, real GDP
growth tapers to about 2–3% by 2065–70 (see Figure 3.1)
Structural Transformation
The structure of GDP and GVA also shifts. Agriculture’s share in GVA (14.4% in 2024-25) is
expected to decline to around 10% by 2070 as productivity rises and the workforce moves
into non-farm sectors. Industry share increases from 30.7% in 2024-25 to 33.6% and thereafter
reduces marginally by 2070, a trend seen in other developed economies. While the share of
services, the largest source of value-add rise from 54.9% to more than 59% of GVA by 2070.
This pattern is typical of a maturing economy and signals movement toward higher-value
activities and a more urban, service-oriented society. Scenarios Towards Viksit Bharat and Net Zero: An Overview 40
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
7.6%
7.4%
6.9%
6.8%
6.1%
4.9%
4.0%
3.2%
2.4%
0
500
1000
1500
2000
2500
Trillion INR
15.6%14.4%
10.00%10.00%
31.6%
30.7%
33.60%30.40%
52.8%54.9%56.40%59.60%
0%
20%
40%
60%
80%
100%
2022202520472070
Share of Various Sectors in GVA 
AgricultureIndustryService
Real GDP (2011-12 Price)
and Growth Rate %
Figure 3.1: Real GDP from 2026 till 2070 (estimated using long term growth model tool) (up),
structure of gdp (down)
Cross-country Evidence
Labour reallocation and productivity gains go hand-in-hand. In China, agriculture’s employment
share fell from roughly 45% in 2005 to about 22% in 2023 as services and industry expanded.
Indonesia shows a similar arc, with the share of agriculture in employment declining from 44%
in 2005 to about 29% in 2023, and services nearing 49% of employment. These comparators
illustrate the growth dividend from shifting workers into higher-productivity activities.
The declining reliance on agriculture underscores the need to raise farm productivity and rural
incomes even as urban-centric services and industry led grow. A larger services share also
implies lower energy intensity, supporting low-carbon transition.
3.4 SECTORAL DEVELOPMENTAL CHOICES AND DEMAND DRIVERS
Rising incomes and urbanisation accelerate demand for housing, mobility, industrial goods, and
public services. This section presents quantitative projections across buildings, transport, and
industry, their implications for energy use and emissions, and the strategic levers required to
ensure sustainability, resilience, and efficiency. Scenarios Towards Viksit Bharat and Net Zero: An Overview 41
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
Floor Space Expansion
India’s urban population is projected to rise from 37% in 2023 to 65% by 2070, reshaping
the built environment and infrastructure demands. By 2047, the urban share of population is
expected to reach 51%, translating to 814 million urban residents (vs 471 million in 2020). This
rural-to-urban migration multiplies demand for buildings, appliances, transport, logistics, and
urban services, altering energy and resource use. With so much yet to be constructed, India
has a rare window to build sustainably. The choices made now will shape not only how fast
India grows, but how well it lives.
The total floor space needed rises by around 2.5 times, from 18 billion m² (2020) to 42 billion m²
by 2070. The overall building stock needs to double by 2050 and 2.5 times by 2070 (Figure 3.2).
Accounting for demolitions, 86% of the 2070 building stock is yet to be built. This creates a
once-in-a-century opportunity to embed resource efficiency and energy optimisation from the
outset. The largest increase is in residential floor area, driven by homeownership aspirations,
rising incomes, and urban migration. Per-capita floorspace needs double from 12 m²/person
(2020) to 23 m² by 2070. Under constraints of rising population density and limited land,
India’s growth will rely more on vertical housing and efficient urban planning. This is similar to
Singapore’s experience. Even by 2070, India will remain below China (~36 m²) and the USA
(~60 m²) on per-capita floorspace, signalling efficient land use.
Services-led growth and rising consumer spending will lead to a significant increase in the
commercial building segment. This needs to more than triple from ~1.3 billion m² in 2020 to
~4.4 billion m² by 2070, raising its share of total stock from ~7% to ~10% (See Figure 3.2). This
is because of increase in office space, retail, hospitality, health and education facilities, transit
hubs, and warehousing, reinforced by initiatives such as industrial corridors and the digital
economy (e-commerce, data centres, GCCs).
0
5
10
15
20
25
30
35
40
45
20202025203020352040204520502055206020652070
Billion Metre Square 
Residential - Existing RuralResidential- Existing UrbanCommercial- Existing
Residential - New Rural Residential- New Urban Commercial- New
4
23
42
10
Figure 3.2: Floor Space Projections for residential and commercial buildings (2020-2070) Scenarios Towards Viksit Bharat and Net Zero: An Overview 42
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
Appliance Penetration-from Latent Demand to Mass Adoption
India exhibits exceptionally high latent cooling demand, yet it has among the lowest access to air
conditioning. Latent cooling demand is measured through person cooling degree days
x
. Figure
3.3 shows that India has a very high level of heat stress (>> 4.0 trillion person-Cooling Degree
Days) but among the lowest AC ownership (~8% of households). By comparison, countries like
China and Korea combine high cooling demand with 60–80% AC ownership.
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
Person cooling degree days (billion)
Person cooling degree days
Japan United
States
Korea ChinaMexicoBrazilIndonesia India NigeriaEgypt
AC household ownership
AC household ownership (%)
100%
80%
60%
40%
20%
0%
Figure 3.3: Person cooling degree days vs ownership of air conditioners for select countries
Recent data from the Bureau of Energy Efficiency (BEE) impact assessment report 2022-23
shows that room-AC (RAC) production grew 24% per annum (2018-19 to 2022-23). Looking
ahead, projections indicate a rapid rise in cooling demand. The India Cooling Action Plan
estimates that RAC ownership could reach around 40% by 2037–38. This is further projected
to reach 80% in urban areas and around 50% in rural areas by 2047, and 80% by 2070 (mass
adoption by mid-century, broad saturation thereafter). According to the IEA’s World Energy
Outlook, (2023) residential air-conditioner ownership is projected to grow ninefold by mid-
century.
Rising incomes and aspirations will drive increases in demand for other appliances as well, such
as refrigerators, washing machines, pumps, and lighting. Refrigerators ownership approaches
near-universal access; fans reach full penetration early; and lighting fixtures per household
increase around 5 times by 2070.
Rapid appliance adoption, especially space cooling, will sharply raise electricity demand and
peak loads, particularly in hot seasons and evening hours. If met with conventional supply and
leaky envelopes, this could heighten emissions and stress grids. However, this is also a design
opportunity to invest now in energy-efficient building design and appliances, smart cooling and
lighting systems, rooftop solar, storage, and modernised grids.
x Person cooling degree days is the country’s average annual cooling degree days (CDD) multiplied by its population.
CDD is the difference between the mean daily temperature (average of the daily high and daily low) and a reference
or base temperature (18 °C in this instance) Scenarios Towards Viksit Bharat and Net Zero: An Overview 43
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
Important Policy interventions
i. Passive design at scale: Directional orientation, natural ventilation, shading, cool roofs,
and insulation to ensure new stock is heat-resilient by default.
ii. Codes & standards: Credible enforcement of building codes (Energy Conservation
and Sustainable Building Codes, and Eco-Niwas Samhita); tighter Minimum Energy
Performance Standards (MEPS) and labels for RACs, refrigerators, fans, motors, and
lighting.
iii. High-efficiency diffusion: Bulk procurement and incentives for super-efficient RACs;
quality assurance for inverters/refrigerants.
iv. Demand-side management: ToD tariffs, smart controls, and utility programmes to shift
or shave cooling peaks.
v. Low-carbon materials and retrofits: Fly-ash or green concretes and envelope upgrades
to cut lifetime cooling needs.
Industrial Demand- Scale, Catch-up and Clean Energy Pathways
India’s industrial production will grow rapidly to meet the demand for urbanisation, infrastructure,
housing, transport, and manufacturing. The growth is driven by steel, cement, aluminium, and
plastics among others, and whose output is projected to multiply several-fold by 2070.
India’s per-capita consumption of many industrial commodities today is much lower than the
global averages. Figure 3.4 shows the per capita consumption of a few key commodities as a
function of GDP per capita. For instance, India’s steel consumption is 103 kg/capita as against
the world average of 222 kg/ capita and China’s ~630. India’s cement consumption is 260 kg
per capita (world average 549; China 1,650). Finally, India’s aluminium consumption is 3.6 kg
per capita (world average ~28).
As incomes reach USD 18,000+ per capita, India’s steel use is projected to increase to 356 kg
per person, approaching the current EU average, while cement consumption nears 921 kg per
person. Aluminium use is projected to increase nearly fourfold to 16 kg per person, aligning with
today’s world averages. Total steel consumption is projected to reach about 568 million tonnes
by 2047, while cement demand is expected to approach 1,471 million tonnes. Aluminium use is
projected to increase to around 25 million tonnes by 2047 (see Figure 3.5).
Germ any 
China 
India 
US
Korea
Japan
France
0
10
20
30
40
50
0 20000400006000080000
kilograms
GDP per capita,  PPP (constant 2021 
international  USD)
Alum inum (Consum ption pe r Capita) 
Germany 
China 
India 
US
Brazil 
EU
Russia
World 
Average 
0
100
200
300
400
500
600
700
0 20000 40000 60000 80000
kilograms
GDP  per capit a, PPP (consta nt 2021 
international USD)
Steel (Apparent  Use per Capita)
Germany  
China 
India 
USBrazil 
EURussia
World 
Average 
Korea
Vietnam 
0
200
400
600
800
1000
1200
1400
1600
1800
0 20000400006000080000
kilogram s
GDP per capit a, PPP (constant  2021 
international USD)
Cement (Per Capita  Consum ption)
Figure 3.4: Per-capita commodity demand vs per-capita GDP Scenarios Towards Viksit Bharat and Net Zero: An Overview 44
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
931
1471
1985
0
500
1,000
1,500
2,000
2,500
2023 2047 2070
Ceme nt
5.44
25.48
38.11
0
10
20
30
40
50
2023 2047 2070
Aluminium
127
568
821
0
200
400
600
800
1,000
2023 2047 2070
Steel
Million TonnesMillion Tonnes
Million Tonnes
Figure 3.5: Projected industrial demand of select commodities- steel, cement,
aluminium (million tonnes) by 2047 & 2070
India’s share of world production is expected to increase sharply, with 25% of global steel, ~20%
of aluminium, and ~34% of cement Made in India by 2050. This positions India as a central
node in global supply chains. It also intensifies resource and energy demands. The implication is
twofold: opportunity (market share, jobs, and technology upgrading) and obligation (resource
productivity, energy efficiency, and compliance with emerging carbon standards).
It is important to emphasise that while the per capita use increases, the objective is not to
maximise consumption; instead, it is to meet needs sustainably and resource-efficiently. The
policy emphasis is on circular economy, low-carbon technologies, strategic resource planning,
and demand-side measures (material-efficient design, lifecycle optimisation, and gradual shifts
toward less material-intensive services). This is to ensure that higher living standards do not
translate into a corresponding raw-material intensity.
A major push to secondary production is expected to raise scrap’s share, in steel from 20% in
2025 to 40%, by 2070, and in aluminium from 30% to 40% by 2070. This is backed by formal
scrap markets, better collection logistics, and scaled recycling capacity. In parallel, production
can be decarbonised via efficiency, electrified heat where viable, green hydrogen for hard-to-
abate routes, and carbon capture for process emissions, notably in cement. Credible standards/
Monitoring Reporting and Verification (MRV) and cluster infrastructure can keep Indian industry
productive, competitive, and climate-aligned, turning scale into an advantage rather than a
liability.
Mobility Demand- Scale, Saturation and Shift to Efficient Modes
India has a low mobility base of ~4,107 passenger kilometres (PKM) per capita as compared
with the United States (~20,428), Italy (~14,956), and Thailand (~10,435). Freight transport in
India is 2,990 tonnes kilometre (TKM) per capita, well below advanced-economy benchmarks.
With rise in per-capita income and urbanisation, mobility is expected to increase as seen in
other developed economies.
As the economy and cities expand, passenger and freight activity are expected to grow nearly
4.5 times from 2023 levels before saturating at mature-economy ranges. Under Current Policy
Scenario, PKM per capita is expected to rise from 4,107 passenger kilometres per capita in 2023
to 14,000 by 2070. Under Net Zero Scenario, better planning and management i.e., adoption
of Transit-Oriented Development (ToD), leads to saturation at 12,000 PKM per capita, lower Scenarios Towards Viksit Bharat and Net Zero: An Overview 45
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
than Current Policy Scenario. This is still a dramatic expansion in access, but with lower lifetime
emissions and reduced infrastructure strain. Even by 2070, India’s per-capita passenger mobility
remains below that of the United States. It is broadly in line with European countries, reflecting
demographics and deliberate choices (see Figure 3.6).
Australia
France
Germany
Spain
Japan
Italy
United Kingdom
United 
States
Thailand
Vietnam
India (2 023)
0
5,000
10,000
15,000
20,000
25,000
20,000 40,000 60,000 80,000
GDP Per Capita, PPP (constant 2021 Int'l $)
Australia
France
Germany
Spain
Japan
Italy
United Kingdom
United 
States
Thailand
Vietnam
China
India (2 023)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
20,000 40,000 60,000 80,000
TKM Per Capita
PKM Per Capita
GDP Per Capit a, PPP (c onstant 2021 Int'l $)
Figure 3.6: Transport demand (Passenger kilometre per capita v/s GDP per capita), and
(Tonnes kilometre per capita v/s GDP per capita)
Left to a road-dominated, fossil-intensive trajectory, the mobility surge could lock-in congestion,
air pollution, and energy security risks. The developmental strategy should counter this through
Mission LiFE, compact transit-oriented development (TOD), shared mobility, and non-motorised
transport (NMT), moderating demand without compromising access. Scenarios Towards Viksit Bharat and Net Zero: An Overview 46
Framing India’s Century—The Viksit Bharat Vision & Sustainable Pathways
Modal shift and enabling capacity. In passenger transport, the share of road travel is projected
to fall from 78% in 2025 to 64% by 2070, while rail and metro share rise to 25% and 4%
respectively. In freight, the road share is expected to drop from 66.4% in 2025 to 60%, with
rail and waterways taking on a greater role. Supporting this shift will be a 5 times expansion in
metro rail length (to over 5,000 kms), a tripling of aviation capacity, and the development of
7,000 km of high-speed rail. These interventions are designed to meet mobility demands while
reducing emissions and improving overall system efficiency.
Car ownership is expected to rise from about 32 cars per 1,000 people (2023) to about 200-
250 cars per 1,000 by 2070. This is a huge increase in the number of vehicles on road. This is
comparable with the present car ownership in China (~231), but far below than the United States
(~850). This highlights the urgency of scaling up public transport, compact urban planning, and
clean-mobility solutions.
Conclusion
The sectoral developmental choices outlined here are not constraints on growth but enablers
of sustainable prosperity. They translate the abstract goal of Net Zero by 2070 into tangible,
sector-specific actions that align with India’s broader development priorities. For instance,
providing universal housing with thermal comfort, expanding mobility access without urban
gridlock, scaling industrial output to meet infrastructure and consumption needs while minimising
material waste, and ensuring energy access that is affordable, reliable and clean.
The rising demand for housing comfort, mobility, industrial goods, and services outlined in
this chapter will create unprecedented energy demand, but also a defining opportunity to
reshape how that energy is produced, distributed, and consumed. The next chapter quantifies
this energy transformation: it examines how a 2.5-fold growth in floor space, near-tripling of
industrial output, and a 4.5-fold expansion in mobility translate into energy requirements and
emissions. 4
INDIA’S TRANSITION
PATHWAYS 48Scenarios Towards Viksit Bharat and Net Zero: An Overview
4
India’s Transition
Pathways
This chapter presents the consolidated results of the integrated energy sector model developed
for India, reflecting the development pathways and policy choices outlined in preceding chapters.
Building on the methodological framework described in Chapter 2 and sectoral development
trajectories and economic growth detailed in Chapter 3, the analysis now transitions from
assumptions to system-wide outcomes.
The chapter quantifies India’s energy transformation across three interconnected dimensions:
Final energy demand by sector (industry, transport, buildings, and agriculture), primary energy
supply by fuel (coal, oil, gas, nuclear, renewables, and bioenergy). It compares two pathways
described in Chapter 2: The Current Policy Scenarios (CPS), which extends today’s policy
landscape, and the Net Zero Scenario (NZS) aligned with India’s 2070 Net Zero commitment.
4.1 FINAL ENERGY DEMAND
India’s final energy demand
xi
is projected to grow from 688 Mtoe in 2025 (estimated) to 1,617
Mtoe by 2050 and 1,811 Mtoe by 2070 under Current Policy Scenario, reflecting industrialisation,
urbanisation, and economic growth (see Figure 4.1). Under Net Zero Scenario, this trajectory is
moderated, with final energy demand reaching 1,381 Mtoe in 2050 and 1,465 Mtoe by 2070, a
reduction of 19% compared to CPS in 2070. This reduction is driven by systematic efficiency
improvements, large-scale electrification of end-use sectors, greater circularity in material uses
and targeted demand moderation, enabling India to meet its developmental goals with reduced
energy (see Figure 4.1).
xi This includes direct fuel (fossil and biofuel) use to end-use sectors for energy and non-energy purposes, electricity
(utility + captive) use and Green Hydrogen. Scenarios Towards Viksit Bharat and Net Zero: An Overview 49
India’s Transition Pathways
1617
1381
1811
1465
Energy Demad (Mtoe)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
CPS NZS CPS NZS
2020 202520502070
Miscellaneous
Industry
Transport
Building
Agriculture
601
688
Figure 4.1: Final Energy Demand Projections, Mtoe
The shift from 2050 to 2070 marks a structural transition: Beyond mid-century, India enters
a post rapid development phase where per-capita demand for materials and transport slowly
saturates, slowing aggregate energy growth. Incremental demand shifts from infrastructure build-
out to services and lifestyle diversification, while energy intensity per unit of GDP continues to
fall. Under Net Zero Scenario (NZS), the increase is only marginal post-2050 due to the impact
of higher energy efficiency improvement and greater electrification compared to Current Policy
Scenario (CPS).
Industry becomes the dominant force in India’s energy demand, with its share rising from 53%

in 2025 to 63–67% by 2070. This surge is driven by rising per-capita consumption of steel,
cement, and aluminium, moving from a low base towards global norms. As a result, total
fuel consumption increases by more than 3 times in CPS and more than 2.5 times in NZS,
making industry the most influential driver of energy demand growth over the coming decades.
However, the scale of this increase is significantly moderated by declining energy intensity
across industries, driven by electrified process heat, penetration of green hydrogen, improved
material efficiency, and circular economy practices, limiting energy demand from rising in
proportion to output growth.
The transport sector illustrates the broader transformation. Despite rising passenger and
freight activity, overall energy demand from transport grows more slowly as the system
becomes progressively more efficient. Rapid electrification of vehicles, continued efficiency
improvements in internal combustion engines, and a structural shift toward public and shared
mobility moderate energy requirements. These combined changes enable a clear decoupling
of transport energy demand from mobility growth, supporting lower overall energy use even
as movement of people and goods expands.
Emerging Demand Scales Rapidly While Conventional Miscellaneous Loads Streamline:
Conventional public energy uses, such as street lighting, water pumping, and municipal services,
remain a small share of final energy demand but become far more efficient with LEDs, smart
controls, and variable-speed drives. By contrast, emerging demand grows rapidly: data centres Scenarios Towards Viksit Bharat and Net Zero: An Overview 50
India’s Transition Pathways
are projected to add an electric load of 45 GW by 2050 and 80 GW by 2070, supported by
lower power usage effectiveness (PUE), liquid cooling, waste-heat reuse, and flexible operations.
Cold chains for food and pharmaceuticals also expand, backed by high-efficiency compressors,
low-Global Warming Potential (GWP) refrigerants, and thermal storage, allowing growth without
proportional energy use.
Demand electrification accelerates: Electrification emerges as a cornerstone of India’s energy
transition, becoming the dominant mode of delivering energy services. Electricity’s share of final
energy demand rises from 21% in 2025 to 32% by 2050 and 40% by 2070 under the Current
Policy Scenario (CPS). In the Net Zero Scenario (NZS), the electrification is even more; 42% in
2050 and 60% in 2070. (See Figure 4.2).
18%
21%
32%
42%
40%
60%
0%
10%
20%
30%
40%
50%
60%
70%
2020 2025 2050
CPS NZS CPS NZS
2070
Demand Electrification
Figure 4.2: Electricity’s share of final energy demand (in %) under Current Policy
Scenario (CPS) and Net Zero Scenario (NZS)
4.2 PRIMARY ENERGY SUPPLY
This section discusses the energy supply mix to meet the energy demand in both the Current
Policy and Net Zero scenarios (see Figure 4.3). Primary energy supply increases from 1,006
Mtoe in 2025 (estimated) to 2,492 Mtoe in the CPS, and 2,159 in the NZS by 2070.
This growth is paired with a fundamental shift in India’s energy mix. In 2025, fossil fuels provide
87% of primary energy. Under NZS, this pattern reverses: non-fossil-fuel sources contribute
86% of the primary energy supply. The share of fossil fuels declines to 14%, largely confined to
hard-to-abate sectors such as aviation, shipping, and industrial heat and feedstock use. Under
CPS, the transition is slower, with fossil fuels still contributing 54% of the energy mix by 2070.
This transformation reflects more than a fuel switch; it marks a structural evolution. The increase
in electricity consumption in final energy enables deep Renewable Energy (RE) penetration and
a larger role for nuclear power across both scenarios. As a result, the share of non-fossil fuels
in primary energy rises from 5% in 2025 (excluding traditional biomass) to 46% in the CPS. In
the NZS, the share of non-fossil fuels is 86% (61% higher compared to CPS) by 2070.
RE transitions from a supplementary energy source to become the backbone of the energy
system, with the CPS following the same structural direction but at a much slower pace.
This rapid expansion of RE across both scenarios is primarily driven by a sustained decline Scenarios Towards Viksit Bharat and Net Zero: An Overview 51
India’s Transition Pathways
in technology costs, including the cost of energy storage. This indicates that the growth of
renewables is mainly driven by market economics and not due to any targeted policy measures.
By 2070, fossil fuel shares in Current Policy Scenario (CPS) are coal at 30%, oil at 16%, and gas at
8%, while renewables reach 32%. In NZ Scenario, the share of coal, oil and gas is 3%, 7% and 4%,
respectively, while RE contributed 63% by 2070. This divergence highlights the transformative
impact of NZS interventions, including higher electrification, ambitious renewable deployment
integrated with energy storage, and nuclear energy to provide base-load power, an accelerated
transition in just five decades.
CPS NZS CPS NZS
0
500
1,000
1,500
2,000
2,500
2020 2025 20502070
Nuclear
RE
Bioenergy
Petroleum Products
Natural Gas
Coal
Energy Supply (Mtoe)
865
1006
2286
2058
2492
2159
Figure 4.3: Primary energy supply projections under Current Policy Scenario (CPS) and
Net Zero Scenario (NZS) for 2050 and 2070, Mtoe
Nuclear energy, emerges as a strategic pillar, growing from 2% energy in 2025 to 8% by 2050
(~100 GW capacity) and 23% by 2070 under the Net Zero Scenario (NZS), delivering round-the-
clock, low-carbon firm power. In the Current Policy Scenario (CPS) nuclear energy reaches 8%
share by 2070, Net Zero Scenario follows an earlier large-scale deployment and enhances grid
reliability–including the use of small modular reactors (SMRs), making nuclear a critical enabler
of low-carbon energy transition.
At present, traditional biomass is a considerable component of primary energy (11%). It is
largely used for cooking, mostly in rural areas. Going forward, traditional biomass is expected
to progressively reduce as households transition to cleaner, more efficient fuels, such as LPG.
Use of traditional biomass for energy is expected to be eliminated by mid-century. There will
be an increase in other bioenergy sources, such as biofuels and biogas in transport, biochar
and feedstock in industry sourced from agricultural residues and municipal solid waste. By
2070, bioenergy is expected to contribute 7% of primary energy in the NZS. However, under
CPS, modern bioenergy reaches only 3% by 2070, constrained by slower progress in waste
management and feedstock processing.
Under Net Zero Scenario (NZS), natural gas contributes 6% of primary energy in 2050 but is
expected to decline to 4% by 2070 as electrification and green hydrogen displace its role in Scenarios Towards Viksit Bharat and Net Zero: An Overview 52
India’s Transition Pathways
the transport and cooking sectors. This reflects the nature of natural gas as a transitional fuel in
NZS and the importance of partial repurposing of planned infrastructure. However, gas remains
as an energy source with 9% share by 2070 under Current Policy Scenario (CPS), reflecting a
slow transition, where gas continues to be leveraged.
Together, these shifts reflect a structural evolution where clean electricity, efficiency, and targeted
policy drive India’s energy transition while supporting its development goals.
Box-4.1: The Net Zero transition creates a power-centric, renewables-led (supported
by energy storage and nuclear energy) system that enhances energy security through
greater reliance on indigenous resources while reducing exposure to imported fuels.
However, it demands commensurate investment in clean technologies: green hydrogen,
energy storage, advanced nuclear reactors, robust transmission infrastructure (including
HVDC corridors), and advanced digital grid operations to manage variability and
integration challenges.
4.2.1 Fuel Demand
Coal
India’s coal demand is expected to follow two distinct trajectories depending on the policy
pathway adopted (see Figure 4.4):
0
500
1,000
1,500
2,000
2,500
3,000
2020 2025
955
1,256
2,615
1,827 1,795
161
20502070
Million Tonnes
Coal Demand
CPS NZS CPS NZS
Figure 4.4: Projected coal demand under Current Policy Scenario (CPS) and Net Zero
Scenario (NZS) for 2050 and 2070, Million tonnes
Under the Current Policy Scenario (CPS), coal demand is projected over the long-term to be
2,615 million tonnes (Mt) in 2050 and 1,795 Mt in 2070. The share of coal reduces from 73% in
2025 to 47% in 2070, even in CPS, driven by higher penetration of renewable energy, driven
by commercial considerations.
In contrast, the Net Zero pathway envisages a moderate coal trajectory. Coal demand is
projected to be to 1,827 Mt in 2050 and 161 Mt in 2070, a substantial divergence from the CPS.
As the power sector transitions largely to non-fossil fuel-based electricity, the residual coal
majorly serves industrial load. These industrial loads are in hard-to-abate sectors such as steel Scenarios Towards Viksit Bharat and Net Zero: An Overview 53
India’s Transition Pathways
and cement, where viable low-carbon alternatives are still emerging. Crucially, all remaining
coal use in 2070 will have to be paired with carbon capture, utilisation, and storage (CCUS) to
achieve Net Zero emissions.
Across both scenarios, India’s abundant coal reserves combined with potential CCUS deployment
could provide opportunities for cleaner coal utilisation. Technologies such as advanced ultra-
supercritical plants, coal gasification, and coal-to-chemicals (e.g., methanol, ammonia) can
offer lower-carbon pathways – especially when integrated with carbon capture and storage
technologies.
Oil
India’s oil demand is projected to follow divergent paths under the Current Policy Scenario
(CPS) and Net Zero Scenario (NZS) (see Figure 4.5).
0
50
100
150
200
250
300
350
400
450
2020 202520502070
247 257
402
288
345
149
Million Tonnes
Oil Demand
CPS NZS CPS NZS
Figure 4.5: Projected Oil demand under Current Policy Scenario (CPS) and Net Zero
Scenario (NZS) for 2050 and 2070, Million tonnes
Under CPS, oil demand continues to grow, reaching approximately 402 Mt by 2050, slightly
tapering down to 345 Mt in 2070. This sustained demand is driven by continued reliance on
conventional fuels and slower electrification, particularly in road transport and industry.
In contrast, the NZ pathway reflects a more moderate demand trajectory, with a total demand
of 288 Mt in 2050, tapering down to 149 Mt in 2070. Of the remaining 149 Mt in 2070, 27% is
consumed in the transport sector, primarily to cater long-haul shipping and aviation demand. A
substantial share of 69% is used in Industry sector, mainly as feedstock in the chemical industry,
as fuel in other industry application and as pet coke in cement sector. The remaining 4% is
attributed to the cooking sector, largely in rural areas.
The two pathways present very contrasting roles of oil in future. While under the Current
Policy Scenario, oil continues to play a broad and growing role across the economy, its use
steadily narrows to a few essential areas in transport and industry under the Net Zero Scenario.
However, even in the NZS, oil still remains in the economy. This highlights that the transition is
less about eliminating oil quickly and more about reducing its use where cleaner alternatives
become viable. Scenarios Towards Viksit Bharat and Net Zero: An Overview 54
India’s Transition Pathways
Natural Gas
In Current Policy Scenario, gas demand is expected to rise and reach 205 BMSCM in 2050 and
246 BMSCM in 2070 (see Figure 4.6), driven by continued reliance on gas in industry (54%),
transport (36%) and cooking sectors (9%).
0
50
100
150
200
250
300
2020 2025 20502070
BMSCM
Natural Gas Demand 
CPS NZS CPS NZS
62
72
205
128
246
92
Figure 4.6: Projected natural gas demand under Current Policy Scenario (CPS) and Net Zero
Scenario (NZS) for 2050 and 2070, Billion Metric Standard Cubic Metre (BMSCM)
In Net Zero Scenario (NZS), natural gas serves as a transitional fuel, rising through the 2030s
to support cleaner transport reaching around 128 BMSCM in 2050 and tapering to 92 BMSCM
by 2070 as electrification and low-carbon fuels scale. The residual uses in NZS includes 90% in
Industry (majorly as feedstock in chemicals and fertilisers), and 10% in the cooking sector. It is
important to note that in NZS, the natural gas demand in 2070 exceeds the present demand.
Given this divergence, planned LNG and CNG infrastructure must be future-proofed. Designing
these assets to be hydrogen- and biomethane-ready is essential to avoid long-term lock-in and
to enable a smoother transition toward Net Zero goals.
Green Hydrogen
Green Hydrogen is likely to become a key clean energy carrier wherever direct electrification
falls short. From a near-zero green baseline today, the pathways diverge sharply (see Figure
4.7). Under Current Policy Scenario, green hydrogen use is projected to grow gradually to
around 8 million tonnes by 2050 and 24 million tonnes by 2070, largely supplementing fossil-
based production. Under the Net Zero Scenario, deployment is projected to accelerate, reaching
25 million tonnes by 2050 and doubling to 50 million tonnes by 2070. This growth is anchored
via hydrogen-based reduction in steelmaking, green ammonia for fertilisers, cleaner process
hydrogen in refineries, use of its derivatives e-methanol and ammonia for shipping, a small
amount going to buses and heavy-duty vehicles and a tradable molecules platform supporting
exports. Scenarios Towards Viksit Bharat and Net Zero: An Overview 55
India’s Transition Pathways
0
10
20
30
40
50
60
20502070
Million Tonne
Green Hydrogen Demand (Mt)
Steel
Refinery
Fertili ser
Expor t
Fuel Cell
Shipping  (e-Methan ol)
Shipping  (Gree n Ammon ia)
CPS
8
25
24
50
NZS CPS NZS
Figure 4.7: Projected green hydrogen demand for various end-use sectors under Current Policy
Scenario (CPS) and Net Zero Scenario (NZS) for 2050 and 2070, Million tonnes
The power system implications of green hydrogen are significant. Assuming that most of the
Green Hydrogen is from water electrolysis, the Current Policy Scenario (CPS) will require about
470 TWh additional electricity generation in 2050 and 1,331 TWh by 2070. Under Net Zero
Scenario (NZS) electricity demand for green hydrogen is projected to be 1,392 TWh in 2050
and 2,764 TWh in 2070. This firmly links hydrogen deployment to clean power expansion
and long-term electricity market reforms, including open access, long-tenor PPAs, and robust
storage mechanisms.
Biofuels
Biofuels play a key transitional role in both scenarios, though their scale and application vary
(see Figure 4.8). India’s rapid ethanol expansion, reaching 20% blending with petrol by mid-
2025 (around 10 billion litres), five years ahead of target, demonstrates how policy, supply
chains, and demand can align to accelerate clean fuel adoption.
Current Policy Scenarios (CPS) Net-Zero Scenario (NZS) 
0
5
10
15
20
25
20502070
Ethanol
0
5
10
15
20
25
30
35
8
13
19
32
20
22
13
22
20502070
SAF
Billion LitersBillion Liters
Figure 4.8: Projected demand of select biofuels (Sustainable Aviation Fuel (SAF), and Ethanol)
under Current Policy Scenario (CPS) and Net Zero Scenario (NZS) for 2050 and 2070 Scenarios Towards Viksit Bharat and Net Zero: An Overview 56
India’s Transition Pathways
Under the Current Policy Scenario (CPS), biofuels remain largely confined to road transport.
Ethanol peaks near 21 billion litres by the mid-2040s. Bio-CNG adoption remains modest,
playing only a niche role in select citygas and transport applications. By contrast, Sustainable
Aviation Fuel (SAF) uptake grows more significantly from a very low base, reflecting offsetting
requirements on international flights.
In the Net Zero Scenario (NZS), biofuels use is higher. Ethanol reaches around 22 billion litres
post-2050, supported by flex-fuel vehicles reaching 10% of car sales by 2050. Sustainable
Aviation Fuel (SAF) grows to 32 billion litres by 2070, helping low-carbon transition in aviation.
India’s biofuel production currently relies on first-generation feedstocks like sugarcane, maize,
and vegetable oils, which scaled quickly due to mature technologies and blending mandates.
However, these sources face limits due to land and water use, food-security concerns, and
seasonal variability. To sustain growth, future strategies must include feedstock caps, resource-
efficiency standards, and a shift toward second-generation residues and advanced biofuel
technologies to avoid long-term resource lock-in.
Box-4.2: Biofuel Supply Potential in India
India’s ethanol production currently relies mainly on maize (~50%) and sugarcane (~30%),
with the remainder coming from damaged food grains and other sources. According to
the NITI Aayog Crop Husbandry Report on Demand and Supply (2024), by 2047–48,
India’s food grain production is expected to exceed domestic demand, creating a surplus
of over 40 million tonnes. This potential surplus could support ethanol production of
more than 16 billion litres, which would cover a substantial portion of the expected
ethanol requirement of around 22 billion litres, indicating feedstock availability for
higher blending goals without compromising food security.
Beyond ethanol, there is also notable potential for other biofuel pathways. For
Compressed Bio-Gas (CBG), The International Energy Agency (IEA) estimates India’s
biogas potential at around 87 Billion Cubic Metres (BCM), suggesting significant scope
for gaseous biofuels in transport sector. For SAF, the Feasibility Study on the Use of
Sustainable Aviation Fuels in India (conducted under the ICAO ACT-SAF Programme)
indicates significant potential for developing a domestic SAF industry, with production
estimates cited around 41.5 billion litres. At the same time, competing biomass uses
will persist, requiring careful assessment of trade-offs related to cost, energy balance,
water use, and emissions.
4.2.2 Energy-GDP Decoupling
India’s projected development trajectory for 2025–2050 can leverage on historical lessons and
emerging opportunities. Figure 4.9 visually captures this by comparing 25-year development
phases of the USA and China: the USA’s post-war industrialisation (1960–1985), China’s rapid
manufacturing-led growth (2000–2025). We also compare this with India’s projected pathways
under the Current Policy and Net Zero scenarios. Scenarios Towards Viksit Bharat and Net Zero: An Overview 57
India’s Transition Pathways
6.1
14
8.58.5
1.3
3.7
2.0
1.8
4.7
3.8
4.2
4.7
USA 1960-8 5 China 2000-25 India CP SIndia N ZS
GDP per capita Gro wth Energy per  capita Gro wth Decoupling  Factor
Figure 4.9: Historical trends of energy and GDP decoupling for select countries and
comparison with India’s projections for period 2025-2050 under CPS and NZS
The USA’s experience shows strong GDP per capita growth during 1960-1985 (about 6.1 times),
while energy use per capita rose only 1.3 times, yielding a decoupling factor of 4.7. This period
marks a shift toward a service-driven economy, where growth has become less energy-intensive.
China’s path contrasts sharply, with GDP per capita rising 14-fold during 2000-2025. However,
energy use increased 3.7 times, resulting in a lower decoupling factor of 3.8. This underscores
the energy-heavy nature of its rapid industrialisation, largely powered by coal.
Taken together, the experiences of the USA and China show that even when GDP per capita
grows several-fold, energy use per capita tends to increase at a slower pace, indicating that a
decoupling is possible between economic growth and energy consumption. This decoupling
reflects a combination of structural economic shifts, improvements in energy efficiency,
technological progress and change in composition of growth, from heavy industry towards
services in the case of the USA and towards more efficient industrial processes in the case of
China.
Against this backdrop, the Current Policy Scenario for India estimates that as GDP per capita
grows 8.5 times by 2050, energy per capita expands 2 times, achieving a decoupling factor of
4.2. In the Net Zero Scenario the decoupling factor rises to 4.7 with a slightly lower energy
growth of 1.8 times. This suggests India is also likely to progressively decouple GDP growth
from energy use through strategic choices on technology and energy mix.
While the decoupling of energy growth from GDP observed in the chart demonstrates India’s
strong efficiency trajectory, the pattern for emissions is less straightforward. In both the US
and China, absolute per capita emissions increased during their industrial transitions, even as
energy-GDP decoupling improved. Scenarios Towards Viksit Bharat and Net Zero: An Overview 58
India’s Transition Pathways
Energy Intensity of GDP and Per-Capita Energy Trajectories
Structural changes can lead to improvements in energy intensity of GDP and energy consumption
per unit of GDP. By 2050, India’s energy intensity is projected to fall to 39-43% of the 2025
level. It further reduces to 20-23% by 2070 as compared with the 2025 level (see Figure 4.10).
This decline from around 0.22 MJ/INR in 2025 to approximately 0.04-0.05 MJ/INR by 2070
reflects improvements in energy efficiency, greater electrification, technology upgradation,
process optimisation and adoption of cleaner and more efficient production methods across
the economy.
Figure 4.10: Projections of India’s energy intensity to GDP (Mega Joules per INR) (left)
and per-capita primary energy (Mega Joules per person) (right)
Per-capita primary energy consumption (see Figure 4.10) is projected to rise with income from
about 30 GJ per person in 2025 to 60 GJ per person in 2050 and 64 GJ in 2070 under the
Current Policy Scenario (CPS). It is expected to be lower at 54 GJ per person in 2050 and 56
GJ per person in 2070 under the Net Zero Scenario (NZS). Even at this level, India’s per-capita
consumption remains below the current world average of 75.4 GJ per person, and well below
OECD benchmarks (typically 125.6–167.4 GJ/person), reflecting population scale and efficiency
gains.
The declining energy intensity is a metric of success–it means India is getting more economic
output from each unit of energy, essentially “doing more with less”. This reduction facilitates the
pathway to Net Zero by lowering total energy (and hence the magnitude of the decarbonisation
task). It also delivers economic benefits: a less energy-intensive economy is more competitive
and less vulnerable to energy price swings. The rise in per-capita energy use, on the other
hand, signals improved prosperity with people accessing more electricity, mobility, and modern
fuels, which is a positive, but must be met through efficient and sustainable forms of energy
to support long-term growth.
4.3 ELECTRICITY
Electricity becomes the main channel for energy services: India’s total electricity consumption
(utility + non-utility) is projected to grow from 1,541 TWh in 2024 to 8,070 TWh in the Net Zero
Scenario (NZS) compared to 6,550 TWh under the Current Policy Scenario (CPS) by 2050, and Scenarios Towards Viksit Bharat and Net Zero: An Overview 59
India’s Transition Pathways
13,000 TWh under the NZS as compared to 9700 TWh under the CPS by 2070 (see Figure
4.11). It is important to note that projections for electricity follow a trend different from that of
primary enegry (Figure 4.3). The total primary energy supply is lower under NZS as comapared
to CPS, both by 2050 and 2070. As against this, the electricity consumption is higher in NZS
because of deeper electrification across end-use sectors such as transport, industry, cooking,
and greater utilisation of green hydrogen. This enables lower use of energy, owing to higher
efficiency of electric technologies.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2020 202520502070
Agricult ure Commercial Residen tial Industry
CookingTransportElectric ity for GH2 Miscel laneous
Electricity Consumtion, TWh
CPS NZS CPS NZS
1,248
1,670
6,550
8,070
9,700
13,000
Figure 4.11: Projections of electricity consumption (TWh) under Current Policy Scenario (CPS) and
Net Zero Scenario (NZS) for 2050 and 2070
Industrial electricity consumption is projected to increase from about 680 TWh in 2025 to 2,700
TWh under the Current Policy Scenario (CPS) and 3,850 TWh under the Net Zero Scenario
(NZS) by 2050. By 2070, consumption rises further to 3,900 TWh in CPS and 6,300 TWh in NZS.
Electricity demand for green hydrogen production is a major driver of this growth. It is projected
to reach 470 TWh in CPS and 1,400 TWh in NZS by 2050, and 1,330 TWh in CPS and 2,765
TWh in NZS by 2070, with most of this demand coming from the industrial sector.
Even with faster electrification in the transport sector under the NZS, electricity demand in
2050 remains broadly comparable with CPS at around 550 TWh. This is because of lower
overall travel demand per person and per unit of freight transport. By 2070, wider adoption of
EVs under NZS leads to moderate divergence of electricity demand reaching about 1,000 TWh
compared to 860 TWh in CPS.
Residential and commercial demand is projected to grow with greater use of appliances and
cooling but remains lower in NZS due to improved efficiency, design and standards. Agriculture
energy use electrifies efficiently, with solar pumps and electric tractors reducing diesel reliance.
Together, these sectors reinforce the shift toward electricity while underscoring the importance
of demand-side interventions. Scenarios Towards Viksit Bharat and Net Zero: An Overview 60
India’s Transition Pathways
4.4 EMISSIONS
The greenhouse gas emissions pathway reflects a development-oriented transition in which
economic growth is progressively decoupled from emissions. This approach is embedded in
the nationally determined climate strategy, which prioritises reductions in emissions intensity
over absolute emissions, consistent with development needs, equity considerations, and
differentiated responsibilities. Early progress demonstrates that significant efficiency gains and
structural shifts can be achieved alongside economic expansion.
By 2020, India had already achieved an estimated 33% reduction in emission intensity compared
to 2005 levels, demonstrating early progress toward its NDC targets. Across both policy
pathways, emissions intensity continues to decline over time, with deeper reductions under
more ambitious Net Zero mitigation scenarios. In the long term, this results in a clear decoupling
of economic growth from greenhouse gas emissions, particularly under a Net Zero aligned
transition. While emissions will increase in the medium term due to rising energy demand
associated with development, the overall trajectory reflects improving energy efficiency, cleaner
energy supply, and structural transformation of the economy. Overall, this development and
equity-aligned pathway demonstrates that reductions in emissions intensity can be achieved
alongside sustained economic growth.
4.4.1 Pillars of Transition
India’s pathway to Net Zero rests on a portfolio of measures that cumulatively determines the
emissions trajectory. The chart below (Figure 4.12) shows the relative contribution of different
“pillars of transition” in reducing gross emissions from a Current Policy Scenario trajectory to
the Net Zero outcome by 2070. Importantly, even after all these interventions, India will have
resiual emissions of 22%. These can only be elmininated by carbon capture technologies.²₂ff
₄₄ ²₂ff₄ff ²₂ff₄ff ²₂ff₄
₂ffff ²₂ff₄ff₄ ²₂ff₄₂₄
₄ ²₂ff₄ff ²₂ff₄
²₂ff₄₄
₂₂
Figure 4.12: Key Levers to reduce GHG emissions from Current Policy Scenario to
Net Zero Scenario by 2070 Scenarios Towards Viksit Bharat and Net Zero: An Overview 61
India’s Transition Pathways
Demand-side Efficiency
Demand-side efficiency is the fastest and most cost-effective way to reduce emissions while
supporting economic growth. It relies on improved performance standards for appliances and
equipment, 5-star air conditioners, refrigerators, motors, pumps, and fans. It also includes
enforcement of building codes like Energy Conservation and Sustainable Building Codes
(ECSBC) and Eco-Niwas Samhita (ENS), alongside deep retrofits and smart controls to cut
heating, cooling, and lighting loads.
In industry, best available technologies, including variable-speed drives, high-efficiency boilers
and furnaces, energy management systems, and waste-heat, drive major efficiency gains. These
are further amplified by behavioural shifts under Mission LiFE and digital optimisation through
Interenet of Things (IoT) and Artificial Intelligence (AI).
Under Net Zero Scenario (NZS), sustained efficiency improvements contribute 14% of total
emission reductions compared to Current Policy Scenario (CPS), avoiding ~0.86 GtCO₂e annually
by 2070, while lowering the scale and cost of new energy supply. Macroeconomic modelling
shows India’s energy intensity of GDP halves by 2047 and falls to one-fifth of today’s level by
2070, reflecting cumulative efficiency gains and structural transformation.
Clean Power
Decarbonising the power sector is the foundation for economy-wide emission reductions, as
a clean grid enables end-use electrification. Under the NZS, the grid’s emission factor declines
from 0.71 kgCO₂/kWh in 2025 to 0.257 kgCO
2
/kWh in mid-century to near zero in 2060s,
delivering the largest cut compared to CPS (Figure 4.13).
0.713
0.710
0.328
0.257
0.067
0.000
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2020 202520502070
kgCO
2
/kWh
CPS NZS CPS NZS
Figure 4.13: Projection of grid carbon intensity under Current Policy Scenario (CPS) and Net Zero
Scenario (NZS) for 2050 and 2070 (kgCO
2
/kWh)
Achieving this requires an unprecedented build-out of renewables with cumulative solar and
wind capacity reaching 3,000-3,200 GW by mid-century and continuing thereafter, supported
by large-scale battery and pumped-hydro storage. The share of nuclear as a source of firm
baseload power rises to nearly 13% of supply by 2070. CPS retains around 6%-12% coal Scenarios Towards Viksit Bharat and Net Zero: An Overview 62
India’s Transition Pathways
generation by 2070, whereas the NZS discontinues all unabated coal from dispatch, with 140-
160 GW as reserve capacity.
Technology Switch & Electrification
Technology switch and end-use electrification replace millions of diffuse combustion sources
with a rapidly decarbonising power system, shifting emissions from stacks and tailpipes to
renewables, hydrogen, and modern bioenergy.
Under the Net Zero Scenario (NZS), electricity’s share of final energy is projected to increase
from 21% in 2025 to 60% by 2070 compared to 40% in Current Policy Scenario (CPS). In
transport, oil use for road travel is projected to be nearly eliminated by 2070 as electric vehicles
dominate, with green hydrogen and e-fuels mainly used for the hardest-to-electrify segments. In
buildings, cooking energy is likely to shift to electric systems while space heating and cooling
pivot to heat pumps and efficient appliances. Industry electrifies low and medium-temperature
heat and motor systems, and green hydrogen supplies process heat for the most challenging
applications, with a demand of 50 Mt demand by 2070. This pillar delivers roughly 20% of the
overall emissions reduction by 2070.
Circular Economy and Material Efficiency
Circular economy strategies decouple growth from raw material use by maximising reuse,
recycling, and material recovery. Under Current Policy Scenario (CPS), measures like extended
producer responsibility (EPR), end-of-life vehicle (ELV) rules, and improved recycling deliver
notable gains. The Net Zero Scenario (NZS) builds on this foundation with deeper interventions
across key sectors.
22%
30%
40%
0%
10%
20%
30%
40%
50%
2020 2050 20702020 2050 20702020 2050 2070
Share of Scrap-SteelShare of Scrap-AluminiumClinker to Cement Ratio 
27%
36%
40%
0%
10%
20%
30%
40%
50%
0.67
0.62
0.55
0.50
0.55
0.60
0.65
0.70
Figure 4.14: Net Zero Scenario share of scrap in steel and aluminium, and clinker to cement ratio
in cement production projections
In steel, scrap utilisation is projected to rise from 22% today to 30% by 2050, and reaching
40% by 2070, reducing reliance on energy-intensive ore-based smelting. In aluminium sector,
recycling is projected to become dominant route of production, using just 5% of the energy
required as compared with primary production. Cement is projected to lower clinker ratios and
adopt blended cements with recycled aggregates, cutting both process and fuel emissions.
Plastics and fertiliser are projected to shift toward mechanical and chemical recycling and
precision nutrient application, reducing demand for virgin feedstocks (Figure 4.14).
Collectively, these interventions account for 6% of emissions reductions under the Net Zero
Scenario compared to the Current Policy Scenario and reduce reliance on imported coking
coal, and polymer feedstocks. Scenarios Towards Viksit Bharat and Net Zero: An Overview 63
India’s Transition Pathways
Transit-Oriented Development
By 2070, nearly two-thirds of Indians, an additional 800 million people, are expected to live in
cities, making urban planning central to India’s low-carbon future. Transit-Oriented Development
(TOD), built around metro and rail stations with safe walking, cycling, and reliable last-mile
options offer major co-benefits: reduced congestion, improved air quality, fewer road fatalities,
and lower transport costs. When scaled across cities, TOD can help avoid millions of private
vehicle purchases through high Floor Area Ratio (FAR) development near transit hubs, parking
restrictions, and non-motorised street design.
India has strong institutional support: Smart Cities Mission, AMRUT, national TOD guidelines,
Metro Rail Policy, and Mission LiFE, which can be strengthened through unified transport
authorities and integrated mobility platforms. Early examples in Delhi, Ahmedabad, and Kochi
show how proximity to quality transit and dependable last-mile connectivity shifts travel
behaviour and shortens commutes.
Managing Residual Emissions through Carbon Capture Technologies
As shown in Figure 4.12, even after deploying all the above mentioned measures, the Net Zero
Scenario will have residual emissions of about 1.3 GtCO₂e by 2070. These will remain in certain
hard-to-abate sectors by 2070: for example, methane and nitrous oxide from agriculture, some
industrial process emissions, and fossil fuel use in aviation, shipping, and industry.
Agriculture, 21%
Waste , 0.50%
Cooking , 2%
Transport , 3%
Steel , 6%
Cement , 40%
Ethylene , 3%
Refinery , 2%
, 0.50%
Aluminium , 5%
Others , 17%
Balanced through Sink  Amenable to CCS at source Not amenable to CCS
Chlor-Alkali
Figure 4.15: Projections of Residual emissions in Net Zero in 2070
Residual emissions will persist due to technological, behavioural, and economic barriers. In the
aluminium industry, a key challenge is the absence of commercially viable inert anode technology,
which is needed to eliminate potent perfluorocarbon (PFC) emissions from the anode effect. Scenarios Towards Viksit Bharat and Net Zero: An Overview 64
India’s Transition Pathways
In the cooking sector, behavioural barriers dominate, as long-standing cultural preferences and
practices hinder wider adoption of clean electric cooking. In industry, major emissions stem from
process emissions in high-energy sectors such as cement and petrochemicals. In other industrial
segments, economic constraints prevail: small-scale, dispersed combustion units face limited
grid and fuel access, capital shortages, and slow policy enforcement, making electrification
difficult.
In the agriculture sector, sustainable farming practices and improved soil management deliver
mitigation co-benefits, contributing to an estimated 2% reduction in overall GHG emissions
in the Current Policy Scenario (CPS), while simultaneously strengthening food security and
rural livelihoods. However, significant residual emissions from agriculture, around 21% of gross
emissions under the Net Zero Scenario (NZS), remain by 2070. This reflects the sectors
deliberate adaptation-first approach and recognises agriculture’s central role on climate justice
and inclusive growth. By scaling multi-benefit pathways, the sector balances limited near-term
mitigation potential with long-term resilience and socio-economic sustainability.
These barriers mean that residual emissions will remain until technologies mature, costs decline,
and practices evolve. Even by 2070, the Net Zero pathway anticipates around 1.3 GtCO₂e of
residual emissions annually, after accounting for the 0.5 GtCO₂ per year natural sink, emissions
that are difficult to eliminate through behaviour or technology alone.
Point-source CCUS can be deployed in the cement (process CO₂ from calcination), steel,
and refining/chemicals. Figure 4.16 underscores this distribution where capture volumes are
concentrated in cement kilns, petrochemicals, and iron- and steel-making, reflecting areas
where inherent process emissions persist even after technology shifts.
While two-thirds of residual emissions remain amenable to carbon capture and storage (CCS),
the remainder currently lacks proven technological options and relies on Direct Air Capture
(DAC) technologies that exist only in a few pilots globally and carry extremely high costs.
CCUS requires additional power alongside CO₂ transport and storage infrastructure; planning
therefore, must incorporate “capture-ready” designs into new hard-to-abate assets to ensure
future retrofit flexibility. 5
SECTORAL TRANSITION
PATHWAYS 66Scenarios Towards Viksit Bharat and Net Zero: An Overview
5
Sectoral Transition
Pathways
Following the comprehensive economy-wide analysis, this chapter turns to sector-specific
pathways that will shape India’s transition to Net Zero emissions. It examines each major sector:
transport, buildings, industry, agriculture, and waste, through the lens of its distinct dynamics,
including structural shifts, efficiency gains, technological advancements, and evolving energy
mix. This chapter presents a clear picture of the incremental progress and transformative shifts
envisioned under the Net Zero Scenario, offering insights into the targeted actions required to
build a balanced, inclusive, and resilient low-carbon economy.
While this chapter provides a broad transition outlook across sectors, detailed sector-specific
analyses are presented in separate reports for each sector, which together form a series under
this Net Zero Pathways work.
5.1 POWER SECTOR
Electricity lies at the heart of India’s transformation. Reliable, and affordable electricity will
underpin progress in every sector of the energy economy, including industry, transport,
agriculture, and services, while enabling a higher quality of life for citizens across both urban
and rural India.
Against this backdrop, India’s electricity generation landscape undergoes a profound
transformation under both scenarios assessed. The analysis draws on two capacity-expansion
models: (1) NITI’s TIMES model and (2) CEA’s ORDENA model, which are closely aligned in their
core assumptions, including sectoral electricity demand, the portfolio of available generation
technologies, and projected investment cost trends.
Detailed methodology and scenario assumptions for the power-sector low-carbon transition
are documented in the Working Group Report on the Power Sector (Volume 7). This section
focuses on the broad results, presenting the evolution of the capacity mix, generation mix, and
per-capita electricity consumption.
5.1.1 Installed Capacity
India’s power sector undergoes a major shift toward non-fossil sources: Figures 5.1 and 5.2,
and Table 5.1 show the power generation installed capacity for Current Policy Scenario (CPS)
and Net Zero Scenario (NZS) respectively. Each figure has results for both 2050 and 2070 using
the output of NITI (TIMES) model and CEA (ORDENA) model. By 2050, non-fossil capacity is
projected to reach 89% under the NZS and 81-83% under CPS. By 2070, this increases further 67
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
to 98% in NZS and 94-95% in CPS (see Figures 5.1 and 5.2). It is noteworthy that even in CPS,
there is significant uptake of non-fossil sources. This reflects existing policy momentum and
growing competitiveness of renewables.
However, this shift must be viewed in context. As mentioned in the previous section, electricity
demand in 2070 under Net Zero Scenario (NZS) is 34% higher than that under Current
Policy Scenario (CPS). As a result, similar percentage shares mask a significant difference in
absolute clean energy deployment, NZS requires a much larger non-fossil base to meet deeper
electrification and low-carbon growth goals.
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
2050 2070 2050 2070
2020
446 535*
2,805
4,7354,686
2,527
2025NITI AayogCEA
Installed Capacity  (GW): Current Policy Scenario
Coal Gas Nuclear Biomas s Hydro Solar Wind Ofshore Wind Onshor e
GW
Figure 5.1: Projected electricity generation capacity for 2050 and 2070 in
Current Policy Scenario (CPS)
0
500
1,500
2,500
3,500
4,500
5,500
6,500
7,500
2050 2070 2050 2070
2020 2025NITI AayogCEA
Installed Capacity (GW): Net Zero Scenario
Coal Gas Nuclear Biomas s Hydro Solar Wind Ofshore Wind Onshor e
GW
446 535*
3,829
6,766
3,809
7,347
Figure 5.2: Projected electricity generation capacity for 2050 and 2070 in
Net Zero Scenario (NZS)
*In case of total installed capacity of 2025, captive installed capacity (excluding diesel) is estimated. Data for
utility-based generation capacity for 2025 is taken from India Climate & Energy Dashboard. 68
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Table 5.1: Capacity mix across two models in Current Policy Scenario (CPS)
and Net Zero Scenario (NZS)
 2020 2025
20502070
CPS NZS CPS NZS
Coal 58% 50% 17%-18% 10% 5%-6% 2%
Gas 10% 6% 0%-1% 0% 0% 0%
Nuclear 2% 2% 2% 3% 2%-3% 4%-5%
Biomass 2% 2% 1% 1% 1% 1%
Hydro 11% 10% 4% 3% 3% 2%
Solar 8% 21% 57%-59% 63%-65% 67%-69% 72%-77%
Wind 9% 10% 16%-17% 18%-21% 17%-22% 15%-18%
RE and Storage: New Core of the Grid
In the Current Policy Scenario (CPS), RE capacity is projected to increase from 229 GW in 2025
to around 4400 GW by 2050 and 6300-6900 GW in the Net Zero Scenario (NZS) by 2070. As
variable renewables dominate the capacity mix, Battery Energy Storage Systems (BESS) shift
from being peripheral assets to be core grid infrastructure. BESS capacity is expected to surge
to 2,500-3,000 GW by 2070 under NZS. Even CPS sees significant growth in BESS capacity
reaching 1,300–1,400 GW by 2070. In parallel, pumped hydro storage capacity is projected to
expand to 150–165 GW in NZS Vs 110 GW in the CPS by 2070, providing multi-hour to multi-
day firmness and reducing renewable curtailment.
Coal-Plan New Units for Initial Years Base-load
While coal plants remain important for adequacy and flexibility in the near-to-medium term, their
role diverges across scenarios. Coal capacity is projected to rise from 268 GW in 2025 to around
450-470 GW in CPS, and to 400 GW in NZS by 2050. The capacity in subsequent decades
is projected to decline due to substantial non-fossil capacity addition in both the scenarios.
This shift underscores the need to review new coal investments. Any upcoming plants must
be designed for deep turndown, fast ramping, low minimum loads, and cycling capability.
Nuclear Power’s Scale-up is Crucial
Nuclear power is crucial to achieving long term goals of power sector decrabonisation. It
provides firm, low-carbon power, high-temperature heat, and electrolyzer backing for green
hydrogen. Nuclear power is projected to grow from the present 8.18 GW in 2025 to 295–320
GW by 2070 under NZS; an increase of 36 to 39 times. Even CPS envisions 90–135 GW; an
increase of 10 to 15 times. The earlier and larger buildout under the Net Zero Scenario better
matches the flexibility and reliability needs of a renewables-dominant grid. 69
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Box 5.1: There could be multiple pathways to achieve
Net Zero in the power sector.
One scenario retains a sizeable coal fleet in the generation mix even in 2070. However, realising
full power sector decarbonisation in such a pathway would hinge on large-scale deployment
of carbon capture, utilisation, and storage (CCUS) technologies on coal plants. This situation
becomes relevant if the growth of renewable energy (RE) and nuclear power is slower than
anticipated, owing to high capital costs of nuclear, challenges in land acquisition, environmental
clearances, grid integration constraints, supply chain bottlenecks, or delays in nuclear project
development and public acceptance. In this coal-plus-CCUS pathway, firm coal capacity partially
substitutes for long-duration storage, reducing the BESS requirement significantly.
Another scenario is where the rise in nuclear capacity remains limited, which would necessitate
even higher RE capacity, especially solar, surpassing 5,500 GW. This pathway, however, would
further increase the requirement for energy storage capacity to ensure reliability and flexibility
of the grid.
Achieving Net Zero depends on the complementary roles of RE paired with storage, delivering
scalable flexible power; and nuclear, providing firm, low-carbon generation, together with
the pace at which both are deployed.
5.1.2 Electricity Generation
India’s power system is expected to scale to multi-petawatt-hour output while its fuel mix is
projected to shift from coal-led to renewables-led (see Figures 5.3 and 5.4). Both modelling
streams (CEA and NITI) show the same trajectory: in the Current Policy Scenario (CPS), gross
generation grows from ~2,000 TWh (2025) to 7,350–7,700 TWh (2050) and ~11,100 TWh (2070).
The Net Zero pathway has higher generation due to higher electrification; 9,700–10,200 TWh
in 2050 and ~16,000 TWh in 2070.
The RE share in generation is projected to increase from 20% in 2024-25 to over 80% in the CPS
and over 85% in the Net Zero Scenario (NZS) by 2070, reflecting the dominance of renewables
in future electricity generation, supported by a large increase in the capacity of energy storage
systems.
Further, the contribution of nuclear power increases many fold, from 3% to 13-14% in NZS
vs 5-8% in CPS by 2070, reflecting its growing role in displacing coal-based generation and
providing carbon-free baseload power. Lastly, coal’s share in overall electricity generation is
projected to remain 6-10% by 2070 in CPS, while in NZS, there is limited generation from coal
capacity. A significant coal capacity in NZS (~140-160 GW) may be reserve capacity rather than
actively generating. 70
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Box 5.2: Enabling legislative framework for Nuclear Power
Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI)
Act, which repeals existing legislations (Atomic Energy Act, 1962 and Civil Liability for Nuclear
Damage Act, 2010) and provides a comprehensive legal framework aligned with India’s current
and future energy needs, is significant. It allows private/PSU entities to build-own-operate-
decommission plants and participate in the fuel value chain.
While both scenarios see a significant decline in coal capacities, PLF during the intermediate
period, hovers around 62-65% indicating partial load operation.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2050 2070 2050 2070
2020 2025
1621
2,038*
7,724
12,012
7,383
11,181
NITI AayogCEA
Electricity Generation (TWh): Current Policy Scenario
Coal Gas Nuclear Biomas s Hydro Solar Wind Ofshore Wind Onshor e
TWh
Figure 5.3: Projected electricity generation mix for 2050 and 2070 in Current Policy Scenario (CPS)
using NITI (TIMES model) and CEA (ORDENA model)
1,621 2,038*
9,651
16,03616,059
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2050 2070 2050 2070
20202025NITI A ayogCEA
Electricity Generation (TWh): Net Zero Scenario
Coal Gas Nuclear Biomas s Hydro Solar Wind Ofshore Wind Onshor e
TWh
10,217
Figure 5.4: Projected electricity generation mix for 2050 and 2070 in Net Zero Scenario (NZS) using
NITI (TIMES model) and CEA (ORDENA model)
*In case of total generation of 2025, captive generation is estimated. Utility based generation for 2025 is India Climate
& Energy Dashboard. 71
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Table 5.2: Generation mix across two models in Current Policy Scenario (CPS) and
Net Zero Scenario (NZS)
  2020 2025
20502070
CPS NZS CPS NZS
Coal 74% 74% 33%-34% 21%-23% 6%-12% 0%
Gas 5% 3% 0% 0% 0% 0%
Nuclear 3% 3% 5% 7%-8% 5%-8% 13%-14%
Biomass 1% 1% 0.4% 0.4% 0.4% 0.3%
Hydro 10% 8% 4%-6% 4% 4%-5% 2%-3%
Solar 3% 7% 42% 50%-51% 58%-62% 64%-67%
Wind 4% 4% 14% 15%-18% 18%-21% 16%-19%
Three system insights follow:
• Coal power is expected to shift from energy generation to insurance against shortages
(capacity/availability matters more)
• Energy storage systems convert variability into value by absorbing mid-day solar and curbing
curtailment (so part of the higher Net Zero TWh is the cost of flexibility that enables near-
zero-carbon supply)
• Planning focus migrates from adding thermal megawatts to orchestrating solar-wind-storage-
nuclear-hydro portfolios with stronger transmission and time-of-day price signals
.
5.1.3 Per-capita Electricity Consumption
India’s per-capita electricity consumption is projected to rise from a relatively low base. At
roughly 1,400 kWh/person in FY2023–24, the country remains in the early stages of demand
compared with OECD economies and nations that achieved similar income levels earlier. This
underscores the significant untapped demand across productive, social, and household uses
as incomes rise, services expand, and electrification accelerates. With substantial headroom for
electricity-driven growth in households, urban services, MSMEs, industry, and clean mobility,
India’s power system can be strategically planned to accommodate this long-term expansion.
As shown in Figure 5.5, under Current Policy Scenario (CPS), per-capita electricity use is
projected to reach about 4,600 kWh/person by 2050. Under Net Zero Scenario (NZS), the
same indicator rises to around 6,000 kWh/person, because of greater electrification of cooking,
road transport (EVs), and industrial processes to replace fossil fuels. By 2070, CPS trajectory
rise further to about 6,900 kWh/person, while NZS outcomes reach around 9,900 kWh/
person, even as there are continued improvements in energy intensity and active demand-side
management. 72
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Figure 5.5: Per-capita electricity consumption in different scenarios
5.1.4 Challenges and Suggestions
The power sector is the backbone of India’s development and is also crucial for achieving India’s
Net Zero ambitions. Reliable, affordable, and clean electricity is essential for industrial growth,
and quality of life. India has expanded electricity access and scaled renewables rapidly, but
coal still supplies ~75% of generation, and Distribution Companies (DISCOMs) face persistent
financial stress. Large scale integration of variable renewables remains a challenge.
1. Generation
Challenge: India’s grid is dependent on coal. A long-term expansion of clean and flexible
resources requires effective grid management. Variable renewable energy exposes the system
to intermittency; long duration energy storage and nuclear have yet not scaled.
Suggestions:
i. Scale nuclear power to 100 GW by 2047 and 200-300 GW by 2070, including
advanced reactors and Small Modular Reactors (SMRs) to provide reliable 24×7 clean
supply. Delivering this requires:
Nuclear Captive Shift: Industrial and large captive consumers may be encouraged
to transition from coal-based captive power plants to Small Modular Reactors
(SMR), enabling cleaner baseload generation. This shift would support national
low-carbon transition goals while maximising the use of existing land, transmission
connectivity, and industrial infrastructure.
Develop and implement the Nuclear Energy Mission to deliver the 100 GW
roadmap by 2047. This requires addressing several issues such as long gestation
and ecosystem constraints through fast-tracking approvals, enabling site readiness
and pre-project development, ensuring assured offtake (including DISCOM
procurement frameworks). It also needs commensurate fuel supply augmentation,
scaling domestic manufacturing/EPC capacity with an assured order book, 73
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
expanding workforce and certified training capacity, and strengthening insurance
capacity for a multi-operator market.
Accelerate indigenous Small Modular Reactor (SMRs): Accelerate development
and deploy SMRs with private participation in industries.
ii. Scale up co-located solar–wind hybrids with storage to improve land-use efficiency,
transmission and distribution system efficiency, reduce curtailment, and deliver a firmer
clean supply. Key reforms include:
Ministry of New and Renewable Energy (MNRE) in coordination with state nodal
agencies, should identify priority hybrid zones, facilitate land aggregation, and
streamline single-window clearances.
SECI and State Discoms may issue coordinated tenders supported by standardised
PPAs and robust payment security mechanisms.
iii. Promote Distributed Energy Resources (DERs): India may prioritise decentralised
solar as a core DER to meet the Viksit Bharat 2047 and net-zero objectives. This
approach can reduce land pressures, T&D losses, and system vulnerabilities arising
from geographic concentration of generation. As land is likely to remain a binding
constraint, given its competing uses for livelihoods, grazing, and biodiversity, policy
should also emphasise land-neutral solutions such as agrivoltaics, floating solar, rooftop
solar and building-integrated PV, supported through operational VGF:
Develop and operationalize Viability Gap Funding for promotion of land-neutral
solar solutions such as Agri-PV, Floating Solar and Building Integrated PV
MNRE, in collaboration with state DISCOMs, may expand Renewable Energy
Service Company (RESCO) and utility-led aggregation models under PM Surya
Ghar and PM-KUSUM through standardised guidelines, bankable contracts, and
robust payment security mechanisms.
DERs, including community solar paired with decentralised storage, may be
formally integrated into distribution planning and resource adequacy frameworks,
enabled through regulatory mechanisms such as virtual or group net metering
and subscription-based models.
iv. Improve Flexibility of Existing Thermal Fleets: To integrate higher shares of VRE, coal
based power plants must operate more flexibly under a clearly defined framework for
flexible coal operation. This should include norms for Minimum Technical Load (MTL),
CEA, in collaboration with relevant agencies may implement and monitor a phased
flexibility programme to progressively achieve deeper minimum-load operation.
To incentivise flexible operation, CERC/SERCs need to operationalise and extend
compensation frameworks for flexible operation and enable market-based
monetisation of flexibility.
Identify old inefficient units for retirement, and repurpose these sites for captive
nuclear and RE+Storage leveraging existing land, water and transmission
infrastructure. 74
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
v. Set national storage targets and procure at scale (across technologies): Establish
clear national targets for storage deployment across BESS, pumped storage and
emerging long-duration options. Accelerate deployment through a predictable tender
pipeline (standalone and RE and storage). This entails:
Notifying technology-wise storage targets/trajectory (GW/GWh) and integrateing
into national/state resource and transmission planning.
SECI and State DISCOMs to roll-out tenders and enforce qualification/realisation
safeguards to avoid “race-to-the-bottom” bids
vi. Repower ageing wind/solar to add generation without new land/transmission:
Repower old RE assets with higher-efficiency equipment to raise output using existing
sites and evacuation, minimizing incremental land and grid buildout.
MNRE in collaboration with State DISCOMs identify potential repowering assets.
State DISCOMs in partnership with project owners to identify repowering-friendly
Power Purchase Agreement (PPA) pathways and incentivise incremental energy
through clear metering/settlement for uprated capacity.
vii. Develop and implement a Viability Gap Funding scheme to accelerate emerging
technologies such as Concentrated Solar Power (CSP) projects, long duration energy
storage, advanced solar/wind designs (e.g., higher-efficiency modules, higher hub-
height turbines), and other promising technologies with support linked to independently
verified performance. The VGF framework should be technology-agnostic and targeted
toward projects that demonstrate strong potential for cost reduction, grid stability, and
domestic value creation.
2. Transmission and Distribution
Challenge: Renewable energy is often generated far from load centres, requiring long distance
transmission. Often, there are delays in building transmission lines leading to curtailment risks.
The mounting debt and losses of DISCOMS are a cause of concern, which limits investment.
Local grids were not designed for rooftop solar injections, bi-directional flows, or new loads like
EV charging. Digitisation has lagged behind targets, and only ~20% of approved smart meters
had been installed.
Suggestions:
i. Improving the financial viability of DISCOMs: Ministry of Power (MoP) may consider
designing a one-time DISCOM debt takeover and structuring scheme, with central
support provided on a conditional basis. DISCOMs may also explore additional revenue
streams by monetising non core assets, such as leasing unused land and increasing
participation in non-PPA power markets.
ii. Enable Competition and Active System Management in Distribution: This will require
amendments to the Electricity Act, to allow multiple distribution. to supply consumers
over the incumbent utility’s network through mandatory, non-discriminatory open
access. In parallel, the introduction of Distribution System Operators (DSOs) for real- 75
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
time management of the distribution network may be considered for actively managing
the low-voltage networks, integrating distributed energy resources, including virtual
storage such as smart loads and vehicle-to-grid systems.
iii. Enable End-to-End digitalization of the grid: To meet the growing power demand
and enable large-scale renewable integration, India must accelerate the digitalisation
of its grid. This includes upgrading existing infrastructure with real-time monitoring
systems, automating substation operations, and adopting centralised control through
Supervisory Control and Data Acquisition (SCADA) and remote monitoring tools.
Utilities should implement predictive maintenance using AI-based tools, develop
grid “digital twins” to simulate network behaviour, strengthen cybersecurity
protocols, and train personnel in digital operations. Deploy distribution digital
twins (live network replicas) to improve planning, loss reduction and reliability at
scale, building on pilots such as the Global Energy Alliance for People and Planet
(GEAPP)/International Solar Alliance (ISA) Rajasthan digital twin.
Operationalise United Energy Interface (UEI) at scale by mandating interoperable
APIs and consent-based data sharing, enabling portable consumer switching, and
implementing dynamic tariffs and standard protocols for demand response and
prosumer settlement.
iv. Feeder Separation for 24x7 Reliable and Quality Power Supply: To ensure all
consumer categories receive, high quality reliable electricity supply, feeder segregation
is critical. Each state may therefore adopt a feeder-segregation model best suited to
its network conditions and consumer mix, guided by rigorous cost-benefit analysis and
implemented within a clearly defined time frame.
v. Strengthen Cross-Border Transmission Networks: Strengthen and expand
interconnections with neighbouring countries like Nepal, Bhutan and Sri Lanka to
import/ export low-cost hydropower, export surplus solar/wind, and improve seasonal
and diurnal balancing, enhancing reliability and reducing system costs.
3. Cross Cuttting Issues
Challenges: India’s clean energy transition faces several interlinked challenges:
i. Domestic manufacturing gaps: Limited manufacturing depth for solar, wind, batteries,
and electrolyzers, increasing import dependence and vulnerability to cost and
geopolitical shocks. End -of-life waste streams from solar PV and batteries will grow
rapidly. In the absence of adequate recycling, this will create environmental risks.
ii. Cybersecurity risks: Growing digitalisation needs robust protocols, to reduce exposure
to cyberattacks and operational disruptions.
iii. Low R&D investment: limits innovation in emerging technologies such as storage,
hydrogen, digital grid solutions, and advanced chemistries.
iv. Planning and land bottlenecks: Fragmented planning, slow clearances, and land
disputes delay RE and transmission projects; renewable energy zones and corridors
are not pre-identified; land records remain inadequately digitised. 76
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
v. Workforce gaps: Coal-dependent regions risk job losses; skilling programmes are
fragmented and misaligned.
Suggestions:
(i) Strengthen domestic manufacturing & circularity: Reduce import dependence and
geopolitical risks by building depth across solar, wind, storage and electrolyzer
manufacturing, while closing the loop on PV and battery end-of-life to recover critical
materials.
Expand PLI scheme to cover inverters, and critical equipment beyond solar cell-
to-module manufacturing.
Operationalise traceability and recycling standards for PV and batteries (under
updated waste rules) to create an assured feedstock pipeline for recyclers.
Develop a Production Linked Incentives (PLI)/Output Linked Incentive (OLI)
framework that rewards production of high-purity refined and recovered materials.
Further, VGF may also be designed to catalyse large scale recycling facilities.
(ii) Mandatory Cyber-Security framework for Power Sector: CEA, in coordination with
designated Government Agencies such as CERT-In & NCIIPC may mandate a uniform
minimum cybersecurity framework for utilities, grid operators and critical power
infrastructure. This framework should cover inter alia, regular third-party security audits,
incident reporting protocols, network segmentation, access controls, and supply-chain
security for both hardware and software.
(iii) Strengthen R&D & innovation ecosystem by scaling private investment in clean energy
R&D, establish dedicated centres in leading institutes. Incentivise industry-academia
partnerships, and support innovation in storage, hydrogen, digital grid solutions, and
demand-side management. Expand clean-tech incubators and global collaborations
(e.g., Mission Innovation).
(iv) Enhance policy stability and investor confidence by publishing long-term, predictable
roadmaps for tariffs, auction designs, and manufacturing support to avoid abrupt shifts.
A stable and transparent regulatory environment is essential to attract both domestic
and global capital at scale. Key measures include:
Shift beyond PPAs to flexible market design expanding short-term market, capacity
market, and ancillary service markets that reward flexibility and reliability.
Strengthen open access rules so that large consumers can procure renewable
power directly and competitively.
Scaling out Time-of-Day (ToD) and Time-of-Use (ToU) tariffs nationwide,
supported by smart meters and the Unified Energy Interface (UEI).
Strengthen institutional and regulatory capacity by increasing staffing and
budgets of State Electricity Regulatory Commissions (SERCs) and DISCOMs to
manage renewable integration, efficiency enforcement, and new technologies.
Improve planning and land processes through pre-identification of Renewable
Energy Zones (REZs) and transmission corridors, cumulative impact assessments, 77
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
digitised land records, and single-window clearances with strict timelines, clear
compensation and early stakeholder engagement.
Continuous training for regulators and grid operators on forecasting, flexibility,
digitalisation, and cybersecurity.
(v) Skilling and reskilling the workforce by aligning national programmes such as Skill
India, PM-KUSUM, and PM Vishwakarma, with emerging clean energy industries. Reskill
coal and thermal power workers for renewable, storage, and grid-service roles. Expand
vocational training and certification for installers, O&M technicians, and digital grid
specialists. 78
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
5.2 TRANSPORT
The transport sector plays a critical role in energy transition, given its strong linkage with
economic growth, urbanisation, and mobility demand, as well as its historically high dependence
on fossil fuels. Accordingly, a detailed representation of transport activity, modal structure, and
technology choice is essential for assessing long-term low-carbon growth pathways.
Transport activity is projected in billion passenger-kilometres (BPKM) for passenger transport and
billion tonne-kilometres (BTKM) for freight. The projections of these transport activity demands
are driven by macroeconomic growth, using a saturation-based model where transport demand
increases with per capita GDP until it saturates, as discussed in Chapter 3. The total activity is
allocated across transport modes: Road, Rail, Metro, and Air for passengers, and Road, Rail, Air,
Water, and Pipelines for freight, then further segmented by vehicle type and fuel/technology.
For a complete methodology and detailed scenario assumptions related to the transport sector
energy transition, the Working Group Report on the Transport Sector (Volume 3) may be
referred to. However, the broad results on modal shift, final energy consumption, and fuel mix
are presented here.
5.2.1 Modal Shift
India’s transport demand remains overwhelmingly road-centric. In 2023, road transport
accounted for 78% of passenger movement, followed by rail (17%), air (4%), and metro (1%).
Freight transport shows a similar pattern: 67% is moved by road, 22% by rail, 8% by waterways,
4% by pipelines, while air transport remains negligible. These figures highlight India’s heavy
dependence on road networks, with rail serving as a strong but secondary mode. Meanwhile,
metro systems in cities and inland waterways for freight remain underutilised, despite their
potential to ease congestion, cut costs, and reduce emissions.
Modal Shift in Passenger Transport
Road dominance persists but declines steadily: India’s passenger transport system is projected
to undergo a gradual modal shift by 2070, as shown in Figure 5.6. Road transport’s share is
projected to fall to 70% under Current Policy Scenario (CPS) and 64% under Net Zero Scenario
(NZS) driven by the expansion of rail, metro, and aviation, while remaining the dominant mode
of passenger transport.
Rail emerges as a low-emission backbone: Rail’s expansion is supported by plans to double the
network by 2047 and major efficiency upgrades. This is expected to push passenger volume
up from 6.9 billion in 2024 to 19.2 billion by 2051 (NRP). Under NZS, rail’s share rises to 25%
by 2070 compared with 20% under CPS, positioning it as the primary low-carbon option for
medium- and long-distance travel.
Urban metro systems scale rapidly: Metro and rapid transit networks are expected to grow
from about 1,000 km in 2025 to 3,600 km under Current Policy Scenario (CPS) and 5,000 km
under Net Zero Scenario (NZS) by 2047. While the CPS represents a gradual rebalancing, the
NZS delivers a deeper structural shift towards efficient, low-emission urban mobility, mirroring
progress in Japan and Europe. 79
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
20202025 2050 2070
Modal  Share: Passeng er Transport 
RoadRailAirMetro
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2020 2025 2050 2070
Modal Share: Freight Transport 
RoadRailAirWaterPipeline
CPS NZSCPS NZSCPS NZSCPS NZS
Figure 5.6: Projections of modal share in transport-passenger and freight under Current Policy
Scenario (CPS) and Net Zero Scenario (NZS) for 2050 and 2070
Shift towards public transport accelerates: In 2023, 53% of passenger road usage is private
and 47% public. By 2070, this shifts to 50% public under the CPS and 60% under the NZS
by 2070, driven by initiatives such as PM-eBus Sewa (10,000 e-buses in 100 cities), state-led
mobility programs, and investments in digital ticketing, first/last-mile connectivity, and shared
mobility, enhancing accessibility and affordability.
Personal Vehicular Ownership
India’s vehicle fleet is dominated by two-wheelers, followed by cars, reflecting affordability-driven
mobility. Trends show a gradual shift toward four-wheelers and shared mobility as incomes rise.
Vehicle ownership is expected to grow sharply by 2070, intensifying urban congestion. India’s
private vehicle ownership stood at 197 per 1,000 people in 2023 (167 two-wheelers, 30 cars).
By 2070, car ownership is projected at 250 per 1,000 under CPS and 200 under NZS. It is
reinforcing the shift toward public transit, shared mobility, and compact urban development.
Modal Shift in Freight Transport
India’s freight mix evolves differently under the Current Policy and Net Zero scenarios. Road
freight is projected to remain dominant but declines to 65% by 2070 under Current Policy
Scenario (CPS), and 60% under Net Zero Scenario (NZS). Rail and waterways are likely to
expand through policy support and infrastructure investment. Waterways, boosted by the
Maritime Amrit Kaal Vision 2047, are likely to quadruple cargo handling by 2047, reaching 7-8%
share. Overall, CPS delivers incremental modal shifts, while NZS achieves a more transformative
rebalancing, with rail and waterways gaining prominence.
Within these modal shares, transport energy demand is estimated using a bottom-up ASIF
framework, which decomposes energy use into four components: Activity (A), Share (S),
Intensity (I), and Fuel (F). Energy demand is derived by multiplying travel activity with the
energy intensity (or mileage) of each vehicle technology under each category. 80
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
5.2.2 Transport Sector Electrification
Rising energy demand, declining battery costs, and the need to cut transport emissions are
driving rapid electrification of India’s transport sector, with adoption rates varying across vehicle
types and scenarios. This study projects that two-wheelers (2Ws) and three-wheelers (3Ws)
will lead the transition due to smaller batteries and faster total cost-of-ownership parity, while
four-wheelers, buses, and commercial vehicles adopt EVs more slowly owing to higher upfront
costs and larger battery requirements. Barriers such as limited charging networks, expensive
financing, and supply chain constraints need to be addressed.
5.2.3 Final Energy Consumption
In 2025, India’s transport sector consumed 137 Mtoe of energy, with average intensities of 483
kJ/pkm and 585 kJ/tkm
i
in passenger and freight, respectively. This also aligns with the global
average intensities at 500-600kJ/pkm in passenger transport and 500-700/tkm in freight
transport. Figure 5.7 show the projections on fuel wise energy consumption for passenger and
freight transport under different scenarios.
Under both scenarios, final energy consumption initially increases and subsequently declines by
2070. Total energy consumption in Current Policy Scenario (CPS) vs Net Zero Scenario (NZS)
(including both passenger and freight) is at 307 Mtoe vs. 192 Mtoe in 2070 (lower by 37%). This
trend is primarily driven by the rising share of electric vehicles in the overall vehicle stock, which
leads to lower energy consumption due to the higher energy efficiency of EVs. In addition, the
lower transport energy use under NZS is a result of multiple factors: reduced transport demand
driven by Transit-Oriented Development (TOD), modal shift from road to rail, increased share
of public transport, fuel efficiency, and technology shift, as shown in Figure 5.8.
0
50
100
150
200
250
300
350
2020 2025
120
137
335
250
307
192
20502070
Mtoe
ATFGasolineDiesel
Fuel OilCNG/LNG/CBG/GH2 GH2 Derivatives (Shipping)
Ethanol/Biodiesel/SAF Electricity
CPS NZS CPS NZS
Figure 5.7: Fuel consumption in transport sector for 2050 and 2070 under Current
Policy Scenario (CPS) and Net Zero Scenario (NZS), Million tonne of oil equivalent (Mtoe)
i kj/ pkm - kilojoules per passenger kilometre travelled; kj/tkm - kilojoules per tonne kilometre of freight 81
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview ffififf₂²₄³₄fla₂ ffi ffififf₂²₄³flaa ffi ffififf₂²₄³fla ffififf₂²₄³flafffl ffi ffififffi₂ ffififf ffififf₂ ffi ffifi ffififi ffififf ffififi ffififf ffififi ffififf ffififfff₂²₄³fla
₂²ffa
Figure 5.8: Drivers of lower energy use in Net Zero Scenario (NZS) by 2070
Fuel Mix: Currently, nearly 96% of India’s transport energy demand is met by petroleum products
and gas, as depicted in Figure 5.7. Under Current Policy Scenario (CPS), the sector remains
predominantly fossil-based, with over three-quarters of supply fossil based in 2050 and 64% by
2070. In contrast, the Net Zero Scenario (NZS) triggers a shift toward low-carbon carriers: by
2050, electricity, biofuels, and hydrogen are collectively projected to reach almost half of the
transport energy mix, increasing to nearly 90% by 2070. Petroleum products are almost entirely
phased out from road transport, leaving aviation turbine fuel (ATF) as the primary residual
fossil fuel, reflecting the challenges of aviation decarbonisation. Relative to the Current Policy
Scenario (CPS), the Net Zero Scenario (NZS) is projected to reduce fossil fuel consumption by
176 Mtoe in 2050, lowering exposure to price volatility and enhancing macroeconomic resilience.
Role of Natural Gas: Natural gas offers a vital short to medium-term bridge for India’s transport
low-carbon growth, but long-term success depends on a decisive shift to zero-emission
technologies. CNG and LNG are expected to grow steadily until 2050, serving as an effective
bridge fuel for urban buses, taxis, and high-mileage freight fleets. This growth helps cut local
air pollution and reduce costs while the ecosystems for electric and hydrogen-based mobility
scale up.
The long-term trajectory of natural gas in transport diverges depending on policy choices. Under
Current Policy Scenario (CPS), gas demand continues to rise, potentially reaching 65 Mtoe by
2070. By contrast, under Net Zero Scenario (NZS), natural gas consumption in transport peaks
at about 32 Mtoe around 2045, plateaus briefly, and then got substituted by Bio-CNG utilising
existing infrastucture along with other gaseous fuel including Green Hydrogen.
Role of Biofuels: India’s commitment to ethanol-based technologies and advanced biofuels
is steadily gaining momentum, fuelled by the need to reduce oil imports and diversifying the
mobility energy mix. The achievement of 20% ethanol blending by mid-2025 (five years ahead
of its original timeline) illustrates India’s capacity to scale policy-driven clean energy solutions
and build robust supply chains. 82
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
However, under CPS, biofuels remain primarily focused on road transport: ethanol is projected
to peak at about ~21 billion litres in the mid-2040s before slightly decreasing through 2070,
Sustainable Aviation Fuel penetration remains modest under CPS.
In contrast, under NZS, biofuels scale over time. Ethanol is projected to reach around 11 Mtoe
(~22 billion litres) by mid-century, and then plateau thereafter through higher adoption of flex-
fuel vehicles that can operate on higher ethanol blends (E20–E85/E100). SAF becomes the
primary growth engine, scaling up to 32 billion litres by 2070. Together, they reinforce India’s
goals of energy security, industrial competitiveness, and deep decarbonisation in the transport
sector.
As electrification accelerates, flex-fuel hybrids and advanced biofuels (CBG, FFVs) will
continue to play a vital role as enablers of a diversified and resilient clean mobility transition.
Role of Green Hydrogen: India is advancing hydrogen and fuel cell technologies as part of its
long-term clean mobility strategy. Under Net Zero Scenario, hydrogen fuel cell vehicles (HFCVs)
complement battery EVs from 2035, especially in segments where electrification faces limits.
HFCVs are projected to consume ~2 million tons by 2050 and ~5 million tons by 2070, with
buses and heavy trucks accounting for up to 20% of sales, providing low-emission solutions for
long-range, high-utilisation transport.
Additionally, green hydrogen derivatives (consumed in shipping sector) including e-methanol
and green ammonia reaches 2.4 Mtoe and 7.1 Mtoe, respectively. This pathway aligns with
global perspectives that long-haul trucking, shipping (via ammonia), and synthetic fuels will be
demand centres for green hydrogen. Unlocking this potential will require large-scale electrolyser
deployment and dedicated renewable energy capacity.
India’s transport transition will hinge on modal shifts, energy efficiency, technology adoption,
and fuel diversification. Under Current Policy Scenario, progress is gradual, with road transport
and fossil fuels remaining dominant. In contrast, Net Zero Scenairo charts a transformative
path–expanding rail and public transport, accelerating EV adoption (led by 2Ws and 3Ws to
start and expanding to all segments later), promoting biofuels through flex-fuel and Bio-CNG
based vehicles, and advancing green hydrogen for heavy-duty segments. Shipping and aviation
also evolve, with ports adopting shore power and green fuels (e-methanol, ammonia) and
aviation scaling SAF. Together, these shifts reduce fossil fuel dependence, curb emissions, and
strengthen energy security, aligning India’s transport system with a low-carbon, high-efficiency
future.
5.2.4 Challenges and Suggestions
A comprehensive avoid-shift-improve strategy is needed to decarbonise transport while
enhancing accessibility, affordability, and safety.
1. Integrated Urban Mobility and Safety
Challenges: Passenger transport is dominated by road (78% in 2025), while metro and rail
contribution is modest. Rising private vehicle ownership worsens congestion. The declining
share of public and non-motorised transport undermines urban livability and system efficiency. 83
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Suggestions:
i. Promote compact, transit-oriented development (TOD) by embedding TOD principles
in city master plans and revising land-use regulations to support high density, mixed-
use development near transit hubs.
ii. Expand and integrate mass transit systems such as metro rail, Regional Rapid Transit
System (RRTS), and formal bus networks, ensuring alignment with demand patterns
and user preferences.
iii. Ensure seamless last-mile connectivity by linking major transit systems with electric
feeder buses, mini-buses, and shared mobility services, while formalizing and regulating
paratransit modes for safety and accessibility
iv. Disincentivise excess usage of personal vehicles by implementing congestion pricing,
high parking fees, and ownership taxes in urban centres.
v. Transition State Transport Undertakings (STUs) from operators to regulators by
adopting models such as gross contracting, where private operators run services
under public oversight.
vi. Establish Unified Metropolitan Transport Authorities (UMTAs) in major cities to
coordinate metro, buses, regional rapid transit (RRTS), and intermediate public
transport (auto-rickshaws, e-rickshaws).
vii. Strengthen investment in non-motorised transport given its co-benefits for emissions,
air quality, and public health.
viii. Scale-up well-designed pedestrian pathways and cycling networks across cities and
towns to support a safe and inclusive infrastructure for everyday mobility.
2. Future-Ready Freight and Logistics
Challenge: Freight remains dominated by road (66.4% in 2025), with rail and waterways
constrained by low speeds, capacity gaps, and poor multimodal integration
ii
.
Suggestions:
i. Promote freight modal shift to rail by setting clear freight rail targets, supported by
dedicated funding including exploring PPPs (double tracking, increased axle loads &
train lengths, scaling DFCs), reform freight pricing system to make it more competitive,
and provide assured and timely delivery of goods.
ii. Scale up inland waterways and coastal shipping by using public cargo (fertilizers,
coal, etc.) to seed demand on priority routes, i.e., major rivers, the North-East, and
coastal regions.
iii. Maximize pipeline utilisation to decongest road and rail networks through petroleum
product pipeline grid by connecting all LPG and major petroleum distribution
installations through pipelines. This strategic shift will free up critical capacity on rail
and road networks, enabling them to better serve expanding passenger mobility and
high-value freight segments
ii Rail carries ~22% of freight, with average freight speeds of ~19 km/h due to capacity constraints and mixed-traffic
sections. Waterways carry ~7.6% of freight and remain underutilised because of shallow drafts, limited terminals,
and weak multimodal integration. 84
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
iv. Accelerate build-out of the national gas pipeline grid by prioritising connectivity
across industrial clusters, high-density freight corridors, urban transport zones, and
hinterland regions to support wider adoption of CNG, LNG, and CBG.
v. Future-proof all new pipeline infrastructure by incorporating technical standards that
can accommodate the eventual transport of green hydrogen, biofuels, and SAF.
vi. Optimise locations for multimodal logistics infrastructure including logistics parks,
integrated freight corridors, and seamless trans-shipment facilities supported by an
end-to-end digital logistics platform to enhance the competitiveness of rail and water-
based freight systems.
vii. Accelerate clean fuel infrastructure by expanding the network of Battery Charging
cum Swapping Stations (BCSS), and LNG fuelling stations along select high-density
highways, logistics hubs, and industrial corridors, with mandated station density to
ensure accessibility and commercial viability. To encourage setting up of a network
of BCSS, Government may consider allotment of land on long term lease basis at
concessional/promotional rates near the National Highways.
viii. Strengthen domestic manufacturing for clean freight technologies by supporting
R&D and localisation of components, including advanced storage systems.
3. Enabling shift to clean fuels
Challenge: India’s clean mobility transition faces multiple, interlinked challenges. Public charging
infrastructure remains sparse and unevenly priced, driving range anxiety and slowing EV
adoption, especially for high-utilisation fleets that need fast, reliable DC charging. Total Cost of
Ownership (TCO) parity for EVs is largely limited to two-wheelers, as heavier vehicles remain
costlier due to high battery costs. At the same time, challenges in domestic critical mineral
extraction and refining make the EV supply chain highly import-dependent for critical minerals
cells, chips, and power electronics, exposing India to price and geopolitical risks.
Complementary pathways are also underdeveloped. Flex-fuel
iii
and LNG vehicles
iv
could support
hard-to-electrify segments. However, sparse retail fuelling infrastructure, pricing issues, OEM
hesitation, low consumer awareness, and food–fuel concerns constrain scale. More broadly,
the absence of clear, segment-wise Zero-Emission Vehicles (ZEVs) promotion and supporting
incentives keeps overall penetration below its potential.
Suggestions:
i. Raise regulatory ambition on efficiency and emissions by strengthening CAFE III and
IV norms progressively covering all vehicle categories and encouraging measures such
as lightweighting and material efficiency.
ii. Adopt a phased approach to Zero-Emission Vehicles (ZEVs): Begin with the phased
elimination of the polluting vehicles and a shift to lower-emission options (CNG, hybrids,
EVs). Subsequently, expand use of biofuels through FFVs, high CBG blends, and hybrid
FFV models alongside continued EV growth. Finally, move to full deployment of ZEVs
iii Flex-fuel uptake remains limited due to sparse retail availability, OEM caution, and low consumer awareness.
iv LNG trucking faces high vehicle costs, limited OEM supply, and inadequate refuelling corridors 85
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
(EVs, Hydrogen based vehicles, FFV, and CBG based drivetrains), backed by segment-
specific targets, timelines, and compliance mechanisms.
iii. Build out supporting infrastructure at scale by expanding EV, CBG, LNG, and flex-fuel
refuelling/charging networks along highways, logistics hubs, industrial corridors, and
priority freight routes, with minimum station density and focused deployment on the
top 20 freight corridors.
iv. Drive fleet transition to ZEVs through targeted incentives and aggregation by
using purchase subsidies, toll and tax exemptions, lower GST rates, and aggregated
procurement of e-buses and e-taxis supported by risk-sharing guarantees and RESCO
models to de-risk and lower upfront costs for public and commercial fleets.
v. Embed EV readiness into urban and commercial infrastructure by mandating EV-ready
provisions in all new public buildings and a defined share of new private buildings,
retrofitting existing public spaces, and providing time-bound capital and operational
subsidies for charging infrastructure until it is commercially viable.
4. Strengthening Vehicle Retirement and Recycling
Challenge: End-of-life vehicle (ELV) recycling remains largely informal, with environmental risks
and continued use of old, high-emission vehicles.
Suggestions:
i. Build robust end-of-life vehicle (ELV) scrappage ecosystems by mandating state-level
scrappage policies aligned with the national framework, through PPPs and incentives
from state governments.
ii. Increase voluntary scrapping using targeted financial incentives such as road tax
waivers, reduced registration charges, combined with simplified registration and RTO
fee structures and public awareness campaigns.
iii. Strengthen battery end-of-life management by ramping up collection of retired lithium-
ion batteries, introducing deposit–refund or other recovery schemes, and adopting
national guidelines for safe handling, transport, and storage.
iv. Promote battery circularity and reuse through standards for refurbished and second-
life applications, circularity-friendly battery design, safety certifications, and dedicated
R&D for sustainable recycling technologies, supported by a “Battery Aadhaar”
v
system
for traceability, data management, and lifecycle monitoring.
v Digital battery traceability (“Battery Aadhaar”) enables safer recycling, second-life use, and material recovery. 86
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
5.3 INDUSTRY
India’s industrial sector has been modelled using a structured, bottom-up approach that links
production activity with energy use and emissions outcomes. This study models nine major
segments: cement, iron & steel, aluminium, textiles, paper & pulp, chemicals, chlor-alkali (soda
ash and caustic soda), fertilisers, and aggregated other industry, covered under the Perform,
Achieve, and Trade (PAT) scheme. The remaining industries are grouped under “other industries”.
The modelling framework uses projected production output for each industry category as its
core activity driver. Annual production forecasts are derived from macroeconomic indicators,
sector-specific growth trajectories, and policy-linked targets, including those outlined under the
Viksit Bharat vision.
For a complete methodology of production projection and detailed scenario assumptions
related to the industrial sector energy transition, the Working Group Report on the Industry
Sector (Volume 4) may be referred to. However, the broad results on total production, final
energy consumption, and fuel mix are presented here.
5.3.1 Industrial Production and Energy Demand
In 2023, the production in various industrial segments was: Steel–120 MT, Cement–360 MT,
Aluminium–5.4 MT, Textiles–7.46 MT, Fertilisers–38 MT, Chlor-alkali–6.54 MT, Ethylene–6.41 MT,
and Paper & Pulp–22.43 MT. Using the methodologies outlined in the Working Group report
on the Industry sector, the projected production for each segment is presented in Figure 5.9.
0
2
4
6
8
10
12
Ethylene TextileAlumi nium SteelChlor- AlkaliCementPaer & PulpFertili sers
seulav 0202 fo elpitluM
Growth in  Indus trial Production
20502070
Figure 5.9: Projected growth in industrial production for 2050 and 2070, in multiple of 2020 values
In addition to activity levels, the model incorporates specific energy consumption (SEC) and
fuel mix as inputs, with values differentiated by technology. Based on scenario definitions, each
sub-sector is mapped to its prevailing technology pathways and the corresponding SEC and
fuel consumption patterns. This includes distinguishing between thermal and electrical energy
(grid and captive) and identifying the fuel mix, such as coal, petroleum products, natural gas, 87
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
electricity, and renewable sources. Energy demand is then calculated by multiplying estimated
production volumes with sub-sector- and technology-specific energy intensity values (in Giga
Joules or Tonnes of Oil Equivalent per tonne).
India’s industry sector consumed about 302 Mtoe of energy in 2020 and 369 Mtoe in 2025
vi
,
dominated by coal and fossil fuels. In the fuel mix for 2020, coal supplied roughly 34% of energy
demand, followed by petroleum products (37%), natural gas (12%), electricity (15%), and 1%
biomass (see Figure 5.10). Within this, a sizeable fraction of fuels is used as feedstock rather
than for combustion, e.g. naphtha/natural gas in chemicals and petrochemicals and natural gas
in ammonia/urea, creating process-related emission profiles distinct from those of fuel use.
The Current Policy Scenario (CPS) reflects continuation of current policies, with gradual
improvements in energy efficiency, moderate fuel diversification, and incremental adoption of
cleaner technologies, leading to modest carbon reductions per unit of output. In contrast,
the Net Zero Scenario (NZS) represents a transformative pathway toward India’s Net Zero
target by 2070, assuming proactive policies, accelerated innovation, and a system-wide shift
to electrification, low-carbon fuels, circular economy practices, and carbon capture, guided by
global best practices. However, both the scenarios use the same production projections.
0
200
400
600
800
1000
1200
CPS
302
370
986
908
1240
1086
NZ CPS NZ
2020* 2025*20502070
Energy (Mtoe): Industry Sector
Biomass Coal Natural  Gas Petro leum Product ElectricityGH2ffififf₂
* This includes fuels for non-energy uses, as well as consumption categorised under the “non-specified” category and
statistical differences in the MoSPI energy balance, which are assumed to be captured within the “Other Industries”
category, after accounting for transport sector allocations.
Figure 5.10: Projected energy consumption in industry sector for 2050 and 2070 under Current
Policy Scenario (CPS) and Net Zero Scenario (NZS)
Under Current Policy Scenario (CPS), industrial energy consumption is projected to rise from
369 Mtoe in 2025 to 1,147 Mtoe by 2070, a three-fold increase in industrial commodity demand.
Although the share of fossil fuels declines modestly from 83% to 72%, the sector remains heavily
dependent on them. Electrification is projected to grow gradually, from 16% to 29% by 2070,
vi This includes fuels for non-energy uses, as well as consumption categorised under the “non-specified” category
and statistical differences in the MoSPI energy balance, which are assumed to be captured within the “Other
Industries” category, after accounting for transport sector allocations. 88
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
but the sheer scale of industrial expansion leads to a 2.7-fold increase in absolute coal and
natural gas demand, reinforcing the dominance of fossil energy.
In contrast, Net Zero Scenario’s (NZS) energy demand is lower by 15% as compared to CPS
by 2070 through enhanced efficiency, electrification, waste heat recovery, and circularity. Clean
energy carriers, electricity and green hydrogen, emerge as the backbone of industrial energy,
reducing coal’s projected share to 7.6% (from 35% under CPS) and petroleum to 11% (from 17%
under CPS). This transition requires electrification, hydrogen deployment for high-temperature
processes, and a shift to renewables, significantly cutting emissions and import reliance.
By 2070, electricity, green hydrogen, and biomass are collectively projected to meet 74%
of industrial energy demand in Net Zero Scenario (NZS), almost double the 39% projected
share under Current Policy Scenario (CPS), but demand large-scale infrastructure investments
to realise. Electrification is projected to rise from 16% to 55% in NZS by 2070. Further, with
expected improvements in the reliability of grid, in both scenarios, the captive share of electricity
is expected to decline from 30% in 2024 to 23% under NZS by 2070.
Current policies lock India’s industry into fossil energy; Net Zero path cuts demand and
transforms the fuel mix.
Role of Green Hydrogen (GH
2
)
In industry, hydrogen is a critical decarbonisation vector for many high-emission processes—
serving as a clean reducing agent in ironmaking, a zero-carbon feedstock for ammonia and
fertiliser production, and a desulfurisation agent in refineries. From a near-zero green baseline in
2020 (when hydrogen use was mostly grey and concentrated in refineries and fertiliser plants),
the two scenarios (CPS and NZS) diverge sharply.
i. In the CPS, GH₂ grows as a supplement to fossil-fuel based production routes. Total
demand is projected to reach about 5 Million Tonne (M)t in 2050 and 19 Mt in 2070.
Sectoral demand shifts progressively toward steel, with consumption of about 13 Mt
in 2070, while fertilisers account for roughly 3.5 Mt, and refineries for around 2 Mt.
ii. In the NZS, GH₂ becomes a core decarbonisation fuel. Industrial hydrogen demand rises
to 17.4 Mt in 2050 and 35 Mt in 2070, almost double that under CPS. Steelmaking is
the anchor load (28 Mt in 2070) as hydrogen-based DRI/EAF replaces coal. Fertilisers
transition to green ammonia (4.5 Mt), and refineries shift to green hydrogen (2.3 Mt)
for hydrotreating processes (desulfurisation, denitrogenating, and deoxygenation).
Circular Economy
India’s industrial base remains heavily dependent on primary materials; cement production is
clinker-intensive, and steel manufacturing primarily relies on iron ore-based routes. To address
the domestic shortage of scrap, India supplements its supply through imports. In 2023, the
country was the world’s second-largest importer of ferrous scrap, at almost 11.5 million tonnes.
Circular economy can bend these trajectories by 2070.
i. Cement: The clinker ratio is projected to fall from 0.67 in 2024 to 0.60 in Current Policy
Scenario (CPS) and 0.55 in Net Zero Scenario (NZS) by 2070. Cement production is
projected to reach 1,985 Mt in same duration. This implies ~100 Mt clinker is avoided 89
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
annually through use of higher supplementary cementitious materials (SCMs) such as
slag, calcined clay, limestone, fly ash or natural pozzolans.
ii. Steel’s scrap/Electric Arc Furnace (EAF) share increases from 18% in 2025 to 40% by
2070, and aluminium’s secondary share rises from 31% in 2025 to 40%.
The proposed production pathways could avoid tens of millions of tonnes of primary demand
and provide scale for secondary commodities, reducing energy use and process CO₂ emissions.
This would also lower reliance on imported coking coal while strengthening domestic scrap
collection and processing to meet future demand locally.
India’s industry shifts from primary dependence to a circular materials in future; circularity
begins to reshape India’s cement and steel trajectories; scrap becomes the new backbone
of India’s steel growth
Carbon Capture
Even after higher efficiency in energy use, electrification, circularity, and using green hydrogen,
India’s industry retains a large “hard” core of process CO₂ (cement calcination, steel off-gases,
aluminium anode) and residual fuel/feedstock emissions such as in petrochemicals production.
i. Under CPS, no CCUS is assumed to be installed, so these emissions remain unabated.
ii. In the NZS, carbon capture scales as the last-mile lever: rising from pilot volumes
in 2035 to around ~35 MtCO₂/yr by 2050, then expanding with CO₂ hubs, pipelines,
and saline storage to roughly ~1,000 MtCO₂/yr by 2070 covering essentially all point-
source-amenable residuals.
5.3.2 Challenges and Suggestions
Industrial decarbonisation requires a mix of efficiency, electrification, new technologies, recycling,
finance, and skilling.
1. Improving Energy Efficiency
Challenge: India has demonstrated significant progress on energy efficiency. Programmes
like Perfom, Achieve and Trade (PAT) have shown that market mechanisms work (~8% annual
savings across designated entities by 2022-23). A key gap lies in improving efficiency of MSMEs
owing to lack of real-time monitoring, lack of capital for upgrades, higher credit costs due to
weak balance sheets and lack of awareness.
Suggestions:
i. Increase audit frequency for high-intensity processes and deploy ISO 50001-aligned
digital monitoring leveraging IoT and AI tools.
ii. Scale up the Assistance in Deploying Energy Efficient Technologies in Industries
and Establishments (ADEETIE) scheme by rapidly operationalizing it in key industrial
clusters. Using ESCO/RESCO models, ADEETIE can bundle interest subvention, energy
audits, Detailed Project Reports (DPRs), and Monitoring and Verification (M&V) to
deliver priority retrofits (e.g., heat pumps, variable-speed drives, waste-heat recovery)
and on-site clean power with low upfront costs. 90
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
iii. Considering Waste Heat Recovery as RE for the purpose of Renewable Consumption
Obligations (RCOs)
iv. Publish simple, sector-wise benchmarks and retrofit menus (textiles, foundries, etc.)
to cut search and transaction costs.
2. Circularity in Manufacturing
Challenge: Industrial decarbonisation is slowed by heavy reliance on virgin materials, low
recycling and reuse rates, especially in industrial sectors such as textiles, pulp and paper,
and construction and demolition waste. Circularity is further constrained by the dominance
of informal scrap collection and processing, low-quality and contaminated scrap, and limited
deployment of advanced sorting and recycling technologies. India’s growing dependence on
imported scrap exposes industry to global policy shifts, export restrictions, and price volatility.
Suggestions:
i. Extended Producer Responsibilty (EPR) backed circularity and compliance: Strengthen
EPR frameworks in plastics, e-waste, and autos by tightening recovery and recycling
obligations, supporting audits, certification, and traceability. Expand EPR to additional
areas such as textiles, footwear, batteries, etc. Further, implement minimum recycled
content mandates where feasible.
ii. Notify Green Public Procurement (GPP) norms, which will incentivise use of BIS-
labelled recycled material. BIS norms will ensure quality standards for secondary
materials.
iii. Industrial symbiosis with clear standards: Promote “waste exchange” clusters, whereby
by-products of one industry (e.g., slag, sludge, heat) become inputs for another under
robust technical standards(e.g. steel slag to cement, fly ash to concrete, textile waste
to insulation).
iv. Promote Unified waste management license enabled through a digital single-window
system with time-bound approvals.
v. Establish decentralised and common pre-processing infrastructure in MSME clusters
(drying/shredding/baling) near waste sources to densify materials, reduce transport
costs, and ensure consistent quality for industrial users.
vi. Integrate informal workers into EPR supply chains via verified IDs, training and Personal
Protective Equipment (PPE).
vii. Promote Transparent, investable circular markets: Organise scrap auctions, adopt
index-linked pricing, enable digital material-flow tracking, and use fiscal levers such
as tipping fees for waste use, rationalise GST and import duties to favour recycling.
3. Electrification of Industrial Energy Demand
Challenge: Only 16% of industrial energy demand is electrified. Barriers include high industrial
tariffs (cross-subsidised in favour of households), unreliable 24×7 green power, regulatory
hurdles for green open access, and high capex for electric boilers, furnaces, and heat pumps.
MSMEs face the steepest hurdles. 91
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Suggestions:
i. Reform power pricing so that industrial tariffs reflect the true cost of electricity,
improving the business case for electrification and flexible, demand-aligned consumption.
Facilitating timely approvals for industry seeking Green Energy Open access.
ii. Develop dedicated power feeders for industrial zones which can provide assured
24×7 grid power, reducing dependence on self-generation and encouraging industries
to shift to cleaner electricity sources.
iii. Promote and scale RESCO models that aggregate demand, achieve economies of
scale, and offer professional energy management services, reducing the operational
burden on individual industries. Scale implementation of Firm Dispatchable Renewable
Energy (FDRE) contracts through deployment of Hybrid plants matching industrial
load profiles.
iv. Develop a sector-wide electrification map linking temperature ranges, processes, and
available electrification technologies to guide industries in sequencing their transition.
v. Promote blended finance instruments with assured green premiums for mature electric
technologies such as electric boilers, where high operating costs limit adoption despite
technical and cost competitiveness.
4. Deployment of New Technologies & Fuels
Challenge: Deployment of frontier low-carbon technologies such as H₂-DRI steel, CCUS for
cement, inert anodes in aluminium, and Limestone Calcinated Clay Cement (LC3) remain early-
stage and expensive. Private sector hesitates to invest in “First-of-a-Kind” (FOAK) commercial-
scale projects due to technical risks and uncertain returns. Green alternatives have high upfront
costs with uncertain returns
Suggestions:
i. Scale up pilot and demonstration projects in H₂-DRI, inert anodes in aluminium, LC3
cement, blue ammonia plants, and CCUS-equipped cement plants to prove technical
feasibility, build investor confidence, and reduce perceived risk.
ii. Ensure assured offtake through creation of buyer’s platform for low-carbon products
such as Sustainable Aviation Buyers Alliance, the Zero Emissions Maritime Buyers
Alliance and the Sustainable Steel Buyers Platform. These platforms can also leverage
Article 6.2/Article 6.4 for enabling trade in low-carbon products.
iii. Strengthen climate taxonomies to explicitly include all low-carbon process routes/
technologies, with clear benchmarks, and thresholds. Harmonise definitions and
reporting boundaries with major international frameworks to reduce transaction costs
and uncertainty for investors. Government and industry bodies to roll out Type III eco-
labels and rating systems for key materials.
5. Employment Risks and Opportunities
Challenge: Rapid adoption of low-carbon and digital technologies is already outpacing
workforce readiness. Low technical and digital skills are creating a transition gap that needs to
be addressed on priority. 92
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Suggestions:
vi. Sector Skill Councils (SSCs) should institutionalise continuous collaboration with
industry partners and ITIs to ensure that training curricula and occupational standards
are regularly updated in line with evolving skill requirements. Certification systems must
be strengthened through employer-led assessments and periodic third-party audits so
that SSC credentials gain stronger labour market credibility and wage signalling value.
vii. Emphasise on-the-job training and practice-oriented courses to upskill the existing
workforce, particularly in emerging technologies and new production processes.
viii. Develop sector-specific transition skill roadmaps to identify at-risk occupations and
facilitate reskilling into low-carbon roles, enabling firms and workers to adapt smoothly
to decarbonisation pressures.
ix. A national skills intelligence system should be developed to generate forward-looking
labour market information and forecast future skill demand at sectoral and regional
levels.
6. International Competitiveness and Trade
Challenge: Indian industry faces rising exposure to global climate-related trade measures,
including the European Union’s Carbon Border Adjustment Mechanism (CBAM) beginning
2026, and growing resource nationalism (scrap export bans and taxes from the EU, China
etc). Domestically, high import tariffs on intermediate goods can raise input costs, while strong
competition from China, Vietnam, and Bangladesh pressures export competitiveness.
Suggestions:
i. Accelerate low-carbon transition in export-oriented sectors to upgrade competitiveness.
Leverage domestic carbon pricing i.e. Carbon Credit Trading Scheme (CCTS) and
Article 6.2/6.4 of Paris Agreement to enable the use of low-carbon technologies/fuels.
ii. Institutionalise a periodic “tariff stocktake” to assess impact on domestic manufacturing.
iii. Launch a “Green Stamp” initiative for exports to certify and showcase the environmental
footprint of Indian products. Develop standardised assessment frameworks (analogous
to the EU’s Product Environment Footprint Category Rules (PEFCR) guidelines) for
priority export sectors, create credible lifecycle assessment (LCA) data repositories,
and implement digital product passports that track product sustainability attributes. 93
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
5.4 BUILDINGS
The building sector covers residential, commercial, and cooking segments. This chapter estimates
the operational energy use for services such as lighting, cooling, appliances, and cooking. It
has excluded embodied and end-of-life emissions. These embodied emissions are indirectly
accounted for in the industry section, while estimating demand of construction materials such
as steel, cement, aluminium etc.
Energy demand is estimated using sector-specific methodologies that account for economic
growth, urbanisation, climate, technology transitions, and household behaviour. This is aligned
with approaches adopted by leading national and expert institutions to ensure robustness and
consistency with broader macroeconomic trends.
For a complete methodology and detailed scenario assumptions related to the building sector
energy transition, the Working Group Report on the Building Sector (Volume 5) may be referred
to. However, the broad results on total electricity consumption in commercial, residential and
fuel mix in cooking sector are presented here.
5.4.1 Commercial Buildings
Commercial sector energy demand is estimated using a bottom-up model that considers
projected floor space (linked to service sector employment), building typologies, and Energy
Performance Index (EPI) values for air-conditioned (AC) and non-air-conditioned (Non-AC)
areas. As the service sector expands and urban centres modernise, commercial floor space
is expected to increase leading to significant increase in energy use. The model factors in
energy savings from Energy Conservation and Sustainable Building Codes (ECSBC), ECSBC+
and Super ECSBC compliant buildings. In 2025, electricity demand of the commercial building
sector was about 137 TWh.
In this sector, differences across scenarios are driven by the changes in the Energy Performance
Index (EPI) and adoption of low-carbon building standards. Efficient appliances reduce EPI
by ~10% in Current Policy Scenario (CPS), limited by older stock and retrofit scope, and
by ~15% in Net Zero Scenario (NZS). This is through higher deployment of Building Energy
Management Systems (BEMS), occupancy-based controls, and improved Heating Ventilation
and Air Conditioning (HVAC) zoning. Floor area assumptions remain same in both scenarios.
Average EPI (AC+non-AC) for a particular building category is expected to rise slightly due
to the growing share of AC floor space under both scenarios, which is inherently moderated
through adoption of efficient building codes. By 2070, efficient building penetration is assumed
to reach 35% (20% ECBC, 10% ECBC+, and 5% Super ECBC) in CPS. In NZS, it reaches 60%
(30% ECBC, 20% ECBC+, and 10% Super ECBC). With the combined effect of reduction in EPI,
increase in AC floor space and penetration of efficient buildings, the reduction of effective EPI
is 11% in CPS and 20% in NZS by 2070.
Accounting for projected floor space and AC share along with effective EPI values, the total
commercial electricity demand (excluding data centres) is projected to rise to 504 TWh under
CPS and 428 TWh under NZS by 2070 (Figure 5.11). This is because of stronger building codes,
enhanced energy management, and widespread efficient HVAC and lighting deployment. 94
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
0
100
200
300
400
500
600
2020 202520502070
 Hospital  Hotels  Retail Education al Ins titute  Ofces  Warehous e  Trans it Assembly Places
CPS NZS CPS NZS
TWh
106
138
417
383
504
428
Figure 5.11: Projected electricity consumption in commercial building sector by 2050 and 2070
under Current Policy Scenario (CPS) and Net Zero Scenario (NZS), Terawatt-hour (TWh)
5.4.2 Residential Buildings
Residential energy demand is modelled using a bottom-up, appliance-based approach that
reflects India’s consumption patterns, where energy use is driven by appliance ownership and
usage. Demand is projected by estimating appliance stock, based on the number of households,
appliance penetration rate, and average units per household, and appliance-specific power ratings
and usage hours. These include services like lighting, cooling, refrigeration, water heating, pumping,
and washing. Electric Vehicles (EVs) charging is excluded and covered under the transport sector.
The model incorporates expected improvements in appliance efficiency and behavioural changes
over time for usage pattern and hours, with separate assumptions for urban and rural segments.
Electricity consumption in the Residential Sector evolves from a profile dominated by lighting
and other appliances towards one shaped by cooling requirements (see Fig 5.12). Rising incomes,
urbanisation, and improved access to electricity are the main drivers, coupled with higher
expectations for thermal comfort. Residential electricity demand is projected to increase from
385 TWh in 2025 to 1,290 TWh in Current Policy Scenario and 925 TWh in Net Zero Scenario
by 2070.
0
200
400
600
800
1000
1200
1400
2020 2025
308
385
1228
773
1290
925
20502070
TWh
Lighting Cooling Heating Refriger ator+TV+Other Appliances
CPS NZS CPS NZS
Figure 5.12: Projected electricity consumption in residential building sector by 2050 and 2070 under
Current Policy Scenario (CPS) and Net Zero Scenario (NZS), Terawatt-hour (TWh) 95
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Cooling demand is the standout: Under Current Policy Scenario (CPS), cooling demand is
projected to reach 834 TWh in 2070. Under Net Zero Scenario (NZS), higher use of efficient
ACs, adoption of Eco-Niwas Samhita standards in new homes, and Mission LiFE behaviour
shifts lead to a lower cooling demand at around 596 TWh by 2070. Other appliances such as
refrigerators, washing machines, televisions also expand rapidly, with total residential electricity
demand expected to more than triple by 2070 under the CPS, but slightly lower under NZS
through technology and efficiency gains.
Heating, which includes both space and water heating, is gaining significance with the
affordability of electric and solar geysers and space heating needs in colder regions. Under
the CPS, electricity demand from this segment is expected to grow from 43 TWh in 2025 to
96 TWh by 2050 and 106 TWh in 2070. Under NZS, with more efficient technologies, demand
is projected to reach 76 TWh in 2050 and thereafter reduce to 70 TWh by 2070.
Other appliances, covering refrigerators, televisions, washing machines, and other household
devices reflect India’s improving living standards. Under the CPS, electricity use for other
appliances is expected to grow from 123 TWh in 2025 to 277 TWh by 2050 and 281 TWh by
2070. Under NZS demand is projected to reach 192 TWh by 2050 and to 210 TWh by 2070
(See Figure 5.12).
5.4.3 Cooking Sector
Cooking, a daily necessity in every household, is also at the heart the country’s energy transition.
To understand this shift, the analysis begins with a simple premise: the energy required to cook
a meal. Using average per capita daily useful energy needs, benchmarked against national and
international studies, the study estimates total demand based on population and household
size, accounting for differences in urban and rural fuel access. The model does not separate
residential from commercial cooking, reflecting the blurred lines in real-world usage. Total
demand is derived from population and household size, differentiated by urban–rural fuel access.
Final energy use is calculated by applying fuel-specific efficiencies across LPG, PNG, electricity,
biomass, and biogas, with fuel shares projected based on adoption trends, urbanisation, policies,
and technology progress.
Even as cleaner fuels like LPG became more widely available, many rural families continue to
“fuel-stack,” blending LPG with biomass to balance affordability and availability. This practice,
while pragmatic, slows the transition to cleaner cooking.
The inefficiency of traditional fuels for cooking is apparent. Biomass supplied over 75% of
India’s cooking energy in 2020, but delivered only about 40% of the actual cooking service.
In contrast, LPG, used more efficiently, accounted for just 22% of energy input but met nearly
57% of cooking needs. Piped natural gas (PNG) and electricity were emerging options, mostly
in urban areas, while biogas remained marginal.
This snapshot of 2020 reveals both the challenges and the opportunities in India’s cooking
energy landscape. As shown in Figure 5.13, scenario results reveal that:
i. Under Current Policy Scenario (CPS), urban households largely stop using biomass
after 2045; rural use reduces sharply and becomes negligible by 2070. LPG remains
a significant source through mid-century but gradually reduces as pipeline network
expands. By 2070, PNG is the leading carrier in this sector, electricity gains a meaningful
share, LPG remains significant, and bio-CNG also is in use at a low share. 96
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
ii. Under Net Zero Scenario (NZS), the fuel mix evolves more rapidly. Traditional biomass
use stops by 2040s; PNG rises to 20%, electricity share more than 50%, LPG reduces
to 15%, and Bio-CNG reaches approximately 7% by 2070.
Across both pathways, total cooking energy consumption declines substantially, from about
97 Mtoe in 2025 to 46 Mtoe (in CPS) vs 41 Mtoe (in NZS) by 2070. The reduction is driven by
end-use efficiency gains associated with the shift from traditional biomass to LPG/PNG and
electric options. The transition delivers significant health benefits and time savings especially
for rural households alongside emissions reductions.
0%
20%
40%
60%
80%
100%
Rural
Urban
Rural
Urban
CPS Rural
CPS Urban
NZS Ru ral
NZS Urban
CPS Rural
CPS Urban
NZS Ru ral
NZS U rban
2020 2025 20502070
Biofuel Biomas s ElectricityLPG PNG
0
20
40
60
80
115
97
58
46 46
41
120
100
CPS NZS CPS NZS
2020 2025 20502070
Mtoe
Final Energy:  Cooking Sector
Fuel Mix:  Cooking Sector
Biofuel Biomass ElectricityLPG PNG
Note: CPS - Current Policy Scenario; NZS - Net Zero Scenario
Figure 5.13: Projected fuel consumption in cooking sector by 2050 and 2070 under Current Policy
Scenario (CPS) and Net Zero Scenario (NZS)
Across both Current Policy Scenario (CPS) and Net Zero Scenario (NZS), India’s transition
from biomass to LPG, PNG, electricity, and bio-CNG cuts total cooking energy use by over half
by 2070, delivering significant health and emissions benefits, especially for rural households. 97
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
5.4.4 Emerging Load: Data Centre Facilities
Data centre demand is projected using IT load
vii
growth and power usage effectiveness (PUE)
over time. High energy intensity and continuous operation mean that data centres are a distinct
and increasingly relevant end-use category within the commercial sector. Their energy demand
is estimated using:
Electricity Demand = IT Load Capacity × Utilisation Factor × Power Usage Effectiveness (PUE)
0
100
200
300
400
500
600
700
800
203020502070
TWh
Figure 5.14: Projected electricity consumption in data centres, Terawatt-hour (TWh)
India’s IT load capacity is projected to reach 4 GW by 2030, largely driven by data localisation
policies and digital service expansion. At a typical utilisation rate of 40% and a PUE of 1.6, this
translates to an estimated electricity demand of around 2.6 GW in 2030.
In the medium-term (2030–2047), IT load is expected to grow at 12% per annum due to AI
integration. By 2047, IT load is projected to reach 65 GW, UF to 50% and PUE dropping to 1.4,
resulting in a total electricity demand of approximately 45 GW (394 TWh).
In the long-term (2047–2070), the integration of quantum computing and further digitalisation
is expected to sustain growth at 6% per annum. By 2070, IT demand could reach 105 GW, with
further operational improvements (UF at 60% and PUE at 1.3), resulting in an estimated energy
demand of about 80 GW (700 TWh).
These projections underscore the increasing importance of data centres in national energy
planning. While their energy footprint expands, efficiency improvements through optimised
cooling systems, renewable energy integration, and advanced power management can help
moderate their energy demand.
5.4.5 Challenges and Suggestions
More than 80% of the floor space that will exist in 2050 is yet to be built, making it both an
opportunity and a risk. If construction follows business-as-usual practices, India will lock in high
energy demand and emissions for decades. While appliance efficiency schemes (like UJALA
and the Bureau of Energy Efficiency’s Standards & Labelling scheme) have delivered gains,
vii Projections of IT load for data centres are undertaken via extensive stakeholder consultation 98
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
building codes remain narrow in scope and weakly enforced. Embodied carbon, passive design,
and retrofit measures receive limited attention.
1. Building Codes coverage and performance
Challenge: India’s building codes remain narrow in scope and weakly adopted, with several
states and Union Territories yet to notify them
viii
. Residential codes are largely voluntary and
have seen minimal uptake
ix
. No code applies to the vast stock of existing buildings.
Even where codes are in force, they focus mainly on design-stage operational energy and
exclude whole-life and embodied carbon, passive design, thermal-envelope performance, heat-
resilience standards, and commissioning protocols. These gaps risk locking in buildings with
high cooling loads, costly retrofits, and poor resilience.
Suggestions:
1. Upgrade existing codes by adding mandatory thermal-envelope performance
thresholds, whole-life and embodied-carbon metrics, heat-resilience standards, and
commissioning protocols to ensure long-term efficiency at minimal additional cost.
2. Expand coverage via tiered framework for commercial buildings: Full Energy
Conservation and Sustainable Building Code (ECSBC) for large commercial and
simplified codes for small commercial reflecting proportionality of regulatory burden.
3. Promote Eco-Niwas Samhita (ENS) for new large residential buildings (>500 metre2)
with Residential Envelope Transmittance Value (RETV) threshold set according to
Climate zones.
4. Develop a retrofit code for existing stock, triggered at major renovation or change-
of-use, requiring measured Energy Performance Index (EPI) disclosure.
5. Set a phased, time-bound pathway that progressively aligns all codes with India’s Net
Zero objectives while giving industry clear visibility on future tightening.
2. Building Code Implementation and enforcement
Challenge: Adoption and compliance vary widely across states and Union Territories. Many
Urban Local Bodies (ULBs) depend on manual and self-declared processes, lack skilled staff,
and have too few qualified assessors. Clear, enforceable penalties are missing, and fragmented
systems prevent the creation of reliable national datasets.
Suggestions:
i. Standardize & professionalize Third Party Assessors (TPAs) through a national
registry with uniform eligibility, training, and protocols, recognised across all states/
UTs; mandate TPA reviews at design-stage and during the site inspections.
viii The Energy Conservation Building Code (ECBC) and the Energy Conservation and Sustainable Building Code
(ECSBC) apply only to new commercial buildings above 100 kW (or 120 kVA in some states) and remain unadopted
in 10 states and 3 Union Territories.
ix The Energy Conservation Building Code for Residential (ENS) is voluntary for plots above 500 m², and the new
ECSBC-R (2024) is yet to be adopted by states and UTs. 99
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
ii. Promote digital-by-default compliance by ensuring every state/UT operates a common
ECBC/ECSBC/ECSBC-R portal for submissions, reviews, approvals, audits, and updates
built on shared data schemas and APIs that feed into a national dashboard.
iii. Define clear, enforceable penalties for non-compliance, including withholding
occupancy certificates and essential service connections (electricity, water, telecom)
until issues are rectified and publish non-compliance and remediation status on the
portal for transparency.
3. Market Development and Innovation
Challenge: There is a need for a mature ecosystem for low-carbon, efficient, and resilient
buildings. Consumers have little information on building performance, benchmarking frameworks
are weak, and incentives are inconsistent. Appliance demand is booming, but the Standards &
Labelling (S&L) programme and Minimum Energy Performance Standards (MEPS) lag global
best practice.
On the supply side, domestic manufacturing remains import-dependent for key appliance
components, embodied-carbon benchmarks are absent, public procurement ignores lifecycle
emissions, and greenwashing risks persist. Data gaps such as no embodied carbon database,
scarce measured building-performance data, and little feedback from demonstration projects
limit market confidence.
Suggestions:
i. Demand-side:
Phased introduction of Environmental Product Declarations (EPDs) for building
materials & products. Develop Product category rules (PCRs) for materials used
in construction such as steel, brick, admixtures, etc. to enable EPD measurement.
Further, create an inventory of accredited EPDs.
Adopt green public procurement by updating schedules of rates to include low-
carbon, EPD-certified products, creating large-scale demand and economies of
scale.
Design and implement financial incentives for green buildings linked to %
improvement over ECSBC and ENS. Incentives may be provided both for developer
and end customer (e.g., stepped increase in FAR depending on modelled EPI for
developer and rebate on property taxes for buyer).
Strengthen appliance efficiency by expanding BEE’s Standards & Labelling (S&L)
programme to cover heat pumps, evaporative coolers, fans, pumps, and TVs,
including refrigerant emissions; strengthening third-party testing and enforcement
to include green labelling of products and appliances.
ii. Supply-side
Upgrade Minimum Energy Performance Standards (MEPS) to align thresholds
with international best practice and tighten regularly.
Implement a super-efficient appliances programme targeting Brushless Direct
Current (BLDC) fans, air conditioners, and refrigerators. 100
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Boost domestic manufacturing by strengthening Production-Linked Incentive-
White Goods (PLI-WG) scheme, simplifying access, broadening technology
coverage (e.g., heat pumps, electronics), and enabling MSME participation.
Accelerate secondary material use through incentives for Construction &
Demolition (C&D) waste and industrial/agri by-products, use mechanisms such as
landfill taxes to redirect waste streams.
iii. Cross-cutting
Establish a national building-data public platform integrating real-world
performance, appliance test data, India-specific EPD database for embodied
carbon disclosure and retrofit outcomes. Use insights to refine codes, standards,
and incentives.
Create a dedicated program to encourage R&D for green/ low-carbon materials
and products, along with commercialisation support to bring the products from
lab to demonstration projects.
Provide support for commercialisation through RESCO/ESCO models targeting
low energy and low-cost cooling, low-carbon masonry, prefabricated systems,
high-performance envelopes.
4. Workforce Capacity and Skills
Challenge: The building workforce, including architects, engineers, masons, HVAC installers, and
facilities managers, lacks targeted training for low-carbon construction. Most existing programs
do not focus on low-carbon materials, energy management, or new technologies. The informal
sector, which dominates construction, is largely excluded from training initiatives. Training
efforts are spread across institutions with weak coordination and monitoring, and no central
feedback mechanism. As a result, the sector is not well prepared to deliver the next generation
of energy-efficient and climate-resilient buildings.
Suggestions:
i. Design dedicated curricula for architects, engineers, trades, and facility managers,
covering low-carbon materials (e.g., alternative cements, agrocrete blocks), building
energy management, and installation of solar PV, HVAC, and insulation systems.
ii. Integrate sustainability modules into national skilling schemes, including the Pradhan
Mantri Kaushal Vikas Yojana (PMKVY), Accelerated Mission for Better Employment and
Retention (AMBER), and PM Vishwakarma.
iii. Include the informal workforce by delivering outreach and training through local
building centres, SHGs, and cooperatives, ensuring last-mile capacity building.
iv. Encourage developers and real estate companies to invest CSR funds in workforce
skilling for green construction practices.
v. Strengthen certification and monitoring via accredited courses on sustainability and
operational-energy management, along with a central mechanism to assess, track, and
update skills programs.
vi. Build regulatory and enforcement capacity by training ULB officials and code assessors
in ECSBC/ENS compliance, modern technologies, and best practices, and significantly
scale up the pool of State Designated Entities. 101
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
5.5 AGRICULTURE
Agriculture modelling is examined for: (i) Agricultural services that generate non-energy emissions,
such as rice cultivation, soil management, agricultural residue burning, enteric fermentation, and
manure management), and (ii) Energy consumption services, such as irrigation pumping and
land preparation, which drive energy-related emissions.
For a complete methodology and detailed scenario assumptions related to the agriculture
sector energy transition, the Working Group Report on the Agriculture Sector (Volume 6) may
be referred to. However, the broad results on non-energy emissions, final energy consumption,
and fuel mix are presented here.
5.5.1 Agriculture Non-Energy Services
Livestock enteric fermentation, rice cultivation, and fertiliser application are major agriculture
sources of non-CO₂ GHGs. This is primarily from methane (CH₄) and nitrous oxide (N₂O), whose
global warming potentials (GWP) are 28 and 265 times that of CO₂ respectively over 100 years
(IPCC 2014). In 2020, agriculture contributed 76% of India’s CH₄ and 70% of its N₂O emissions,
driven by enteric fermentation from livestock, rice cultivation, and synthetic fertiliser use.
The emissions projections methodology follows a two-step process:
1. Projecting production: Baseline data (2019 and earlier) for key crops and livestock
are used to project future production for eight key crops and milk, based on farming
practices, input use, and supply-demand trends. Production trajectories are common
to both scenarios.
2. Estimating emissions: Projected production is combined with India-specific emission
factors aligned with international standards. The main assumptions and interventions
used for projecting agricultural emissions are detailed in the working group report on
agriculture Sector (Vol. 6).
Two pathways: Current Policy Scenario and Net Zero Scenario are assessed; emission reductions
(“mitigation co-benefits”) are evaluated over time across nine key areas.
Figure 5.15 shows projected non-energy emissions from agriculture under two scenarios.
Current Policy Scenario: Total agricultural emissions are projected to increase from 506 MtCO₂e
in 2020 to 531 MtCO₂e by 2070.
i. Rice methane emissions are projected to decline by ~30% by 2070 from its value
in 2019 due to gradual adoption of sustainable practices like Alternate Wetting and
Drying (AWD), System of Rice Intensification (SRI), and Direct-Seeded Rice (DSR).
ii. Soil N₂O emissions are projected to fall by ~12% from the 2019 value, because of better
fertiliser use and growth in chemical-free/ natural farming.
iii. Livestock emissions are projected to increase by ~20%, driven by a rise in milk
production, which offsets gains from improved breeds and nutrition. 102
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Overall, Current Policy Scenario (CPS) shows modest progress in emission reduction, limited by
slow adoption of resource-efficient practices and continued livestock expansion.
0
100
200
300
400
500
600
CPS NZS CPS NZS
201920502070
MtCO2eAgriculture Non-Energy Emissions
Rice EmissionsAgri. Soil Emissions
Agri. Waste Biomass BurningEnteric Fermentation
Manure Management
* 2019 emission reported in Third National Communication (TNC) were 421 MtCO
2
e (estimated using AR-2 method),
converted using AR-5 method in above chart
Figure 5.15: Non-Energy emissions from agriculture sector under Current Policy Scenario (CPS) and
Net Zero Scenario (NZS) by 2050 and 2070 (Million Ton CO
2
e)
Net Zero Scenario: Presents a more ambitious path, with total emissions falling by ~21% by
2070, offering a 25% reduction compared to CPS. Importantly, this reduction is achieved
through interventions that primarily strengthen agricultural resilience, with emissions mitigation
delivered as a co-benefit rather than the primary objective.
i. Rice methane emissions are projected to reduce by 62% in 2070, driven by crop
diversification, yield improvements, and widespread adoption of sustainable rice
practices.
ii. Soil N₂O emissions are expected to reduce by ~20%, as compared to 2019, supported
by large-scale chemical-free farming and improved fertiliser efficiency (up to 50%).
iii. Livestock emissions are likely to fall by ~8% by 2070 as compared to 2019, due to
higher productivity (15 kg milk/day/animal) from genetic and nutritional upgrades.
System-wide transformation, combining technology, ecology, and demand-side shifts, can
align India’s agriculture with its Net Zero and resilience goals.
5.5.2 Agriculture Energy Use
Energy use in agriculture is estimated for two key services: 1) Irrigation pumping, and 2) Land
preparation, including tillage and field operations using tractors and power tillers. Long-term
energy demand for agriculture is assessed under the contrasting Current Policy and Net Zero
pathways. Both share the same production outlook driven by population and dietary changes, 103
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
with total crop output roughly doubling by 2070. However, they diverge in how irrigation and
mechanisation needs are met, and in the pace of technology transitions, resulting in different
energy use trajectories.
d. Pump Irrigation Energy Consumption: Energy demand for irrigation is estimated by
converting water-pumping needs into useful energy and then final energy, accounting
for efficiency improvements. Using data from the 5th Minor Irrigation Census (2017)
and field studies, a typical irrigation pump is assumed to be 5-6 HP with a discharge
of 20 m³/h. Electric and solar pumps operate about 750 hours annually, while diesel
pumps run only for 250 hours due to higher fuel costs. These assumptions yield a
base-year stock of 20 million electric and 10 million diesel pumps, consistent with
Minor Irrigation Census (MIC, 2017).
Under CPS, irrigation expands steadily: ~65% of GCA is irrigated by 2070, with
groundwater supplying ~65%. Electric pumps dominate while diesel pumps decline
slowly amid limited solar pump uptake. Average pumping head is assumed to rise
from 28 m (2020) to ~50 m (2070) as aquifers fall. Pump-motor efficiency edges up
to ~40% (diesel/electric), with solar comparable to electric.
In contrast, Net Zero Scenario (NZS) envisions a more efficient and sustainable irrigation
system. The irrigated share of GCA stabilises near 60%, with reduced groundwater
dependence (60%) owing to improved canal systems and aquifer recharge. Widespread
adoption of efficient irrigation technologies (drip and sprinkler systems) improves
water productivity by about 25% compared to 2019 levels. Diesel pumps are fully
phased out by 2035, replaced by high-efficiency solar and electric pumps that achieve
50% efficiency by 2070. The average pumping head remains moderate at 35 metres,
supported by better water management and recharge measures.
0
10
20
30
40
50
60
2020 2025 20502070
Mtoe
Energy Consumption in Agricul ture Pumpin g
DieselElectricitySolar
CPS
21
24
38
31
51
36
NZS CPS NZS
Figure 5.16: Energy demand and fuel mix in agriculture pumping under Current Policy Scenario
(CPS) and Net Zero Scenario (NZS) by 2050 and 2070
India’s irrigation pumping consumed around 21 Mtoe in 2020, with diesel accounting
for about 10% of the total. By 2070, this demand is projected to rise to 51 Mtoe under
Current Policy Scenario (CPS) and 36 Mtoe under the Net Zero Scenario (NZS) (Figure
5.16). Diesel pumps are phased out after 2040 in the CPS and by 2035 in the NZS. 104
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Consequently, by 2070 the CPS fuel mix is 60% electricity and 40% solar, while in the
NZS it is 40% electricity and 60% solar, reflecting faster clean-energy adoption.
e. Land Preparation Energy Consumption: Land preparation energy demand is linked
to India’s Gross Cropped Area (GCA), as each hectare requires preparation every
season. The GCA was 185 Mha in 2019-20 and is projected to increase to 218 Mha
by 2050 and 226 Mha by 2070. With the current mechanisation level of 47%, about
93 Mha were prepared using tractors or tillers in 2020, with the remainder relying on
traditional methods. Mechanised preparation is dominated by tractors. Power tillers
remain important for smallholder farms as over 85% of farmers own less than 2 ha,
and tillers are cost effective for fragmented plots.
The energy demand is estimated using operating hours per hectare and fuel consumption
by equipment type: tractors require fewer hours per hectare but consume more fuel
per hour, while power tillers operate longer hours but use less fuel. These factors yield
per-hectare energy intensities for both technologies.
Under CPS, energy demand is projected to rise to 2.1 Mtoe in 2020 to 3.8 Mtoe in
2050 and 3.3 Mtoe by 2070, with 9% diesel and 8% CNG required even by 2070.
Efficiency gains and precision agriculture reduce per-hectare fuel use, but expanding
mechanisation drives overall demand.
Under NZS, total energy demand is expected to stabilize at ~2.5 Mtoe by 2070 despite
full mechanisation. Diesel is fully phased out by 2070, replaced by electric tractors and
tillers. CBG sourced from crop residues and animal waste acting acts as a transitional
fuel in the 2040s. By later decades, electric tractors dominate, offering ~30% higher
efficiency and integration with a decarbonised grid and solar charging.
0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
2020 2025
2.1
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3.8
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2.6
20502070
Energy Consumpti on in Ag ricultur e Land Pr eparation 
Diesel
Mtoe
CNG/CBG Electricity
CPS NZSCPS NZS
Figure 5.17: Energy demand and fuel mix in agriculture land preparation under Current Policy
Scenario (CPS) and Net Zero Scenario (NZS) by 2050 and 2070
India’s agricultural energy transition depends critically on the sequencing of efficiency
measures and clean-energy adoption. Substituting diesel/grid pumps with solar reduces
emissions but may not lower total energy use if irrigation volumes continue to rise; under
current policies, pumping demand increases with deeper aquifers and expanding irrigated 105
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
area. An efficiency-first approach coupling solarisation with micro-irrigation (drip/sprinkler)
and daytime irrigation scheduling can reduce water (and thus energy).
5.5.3 Challenges and Suggestions
Agriculture and allied sectors (including livestock) are unique in India’s climate context. They
account for a significant share of emissions yet are highly vulnerable to climate change and
tightly tied to livelihoods and food security. Unlike energy or industry, emissions here come from
millions of dispersed producers and biological processes, making them harder to control. At the
same time, most Indian farmers are smallholders, for whom yields and income are naturally the
biggest priority. Given the sector’s structural constraints and dependent livelihoods, there is a
clear need for an adaptation-first framework delivering mitigation as co-benefits.
1. Crop Diversification
Challenge: India’s food security has long depended on rice and wheat, particularly in Green
Revolution states. Despite the Crop Diversification Programme under Rashtriya Krishi Vikas
Yojana (RKVY) 2015 onwards, rice acreage remains high. Over-dependence on water-intensive
paddy contributes to methane emissions, groundwater depletion, and soil stress.
Suggestions:
i. Encourage supply-side diversification by promoting pulses, millets, oilseeds, and
horticulture, leveraging flagship government missions and budget commitments.
Prioritise water-stressed, low-yielding regions where nutri-cereals are already grown.
ii. Create demand-side linkages and diet diversification: Integrate pulses and millets into
the Public Distribution System (PDS) under the National Food Security Act (NFSA) to
give farmers assured markets while reshaping consumption.
iii. Align food welfare schemes: Production shifts must be matched by changes in the
food items supplied through welfare schemes, so that diversification crops actually
reach households.
2. Rice Water Management
Challenge: Methane from rice is produced mainly from continuously flooded fields. Even as
rice yields rose ~14% from 2011–2019 without acreage expansion, irrigated high-yielding rice in
major states remains predominantly flooded, sustaining methane and groundwater stress. Some
water-scarce states have shifted toward Alternate Wetting and Drying (AWD) and aerobic rice,
but uptake is uneven.
Suggestions:
i. Scale AWD and aerobic rice where agro-climatic conditions permit, drawing on
experience from states already applying these practices.
3. Nutrient Management
Challenge: Nitrous oxide (N₂O) emissions from soils are driven by nitrogen fertiliser use and
rising cropping intensity. Fertiliser application averages of ~140 kg/ha per cycle indicate heavy 106
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
nitrogen use. Between 2011 and 2019, cropping intensity rose from 139% to 151%, while Nitrogen
Use Efficiency (NUE) continued to decline. This raises both emissions and input costs.
Suggestions:
1. Expand precision fertilisation through the Soil Health Card scheme, site-specific
nutrient management, and techniques like deep urea placement and fertigation.
2. Improve fertilizer quality by scaling neem-coated urea and closely monitor the rollout
of nano urea.
3. Promote balanced nutrient use, restoring phosphorus and potassium application
alongside nitrogen to correct imbalances.
4. Natural and Chemical-Free Farming
Challenge: India’s productivity gains have relied on synthetic fertiliser expansion and high-
yielding varieties. While this has stabilised emissions relative to production, it has caused soil
degradation, falling Nitrogen Use Efficiency (NUE), and water stress. Initiatives such as the
National Mission on Natural Farming (NMNF), Paramparagat Krishi Vikas Yojana (PKVY), and
Bharatiya Prakritik Krishi Paddhati (BPKP) promote natural farming, but adoption remains below
3% of cropland. Scaling is slowed by uncertain yields during transition, weak value chains for
inputs and outputs, and limited certification systems.
Suggestions:
i. Target hotspots using agronomic (fertiliser intensity), biophysical (soil health, rainfall,
water stress), and socio-economic (SHG/FPO presence) criteria.
ii. Adopt context-specific scaling in rainfed areas to raise yields and resilience; in Green
Revolution belts to restore soils and aquifers. Rollout should be staggered and state-
specific.
iii. Develop value chains via Biodiversity Resource Centres (BRCs) for bio-inputs and
training; link organic/natural produce to reliable procurement and marketing systems.
iv. Strengthen certification systems to secure consumer trust, ensure price premiums,
and protect farmers from unstable markets.
5 Livestock and Manure Management
Challenge: Livestock contributes ~60% of agricultural emissions, mostly methane from enteric
fermentation. Between 2011–2019, milk production rose 55%, while emissions increased only
~2%, due to higher productivity and herd restructuring. Yet, average productivity remains below
global levels, and rising milk demand could raise emissions and fodder pressure.
Suggestions:
x. Improve breeds through scaled crossbreeding, artificial insemination, and IVF adapted
to local conditions.
xi. Enhance animal nutrition and health by addressing fodder deficits, promoting silage-
making, and improving feed quality. 107
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
xii. Increase feed efficiency by raising protein content in diets to reduce methane per
litre of milk.
xiii. Adopt better manure management through household and community-level biogas
digesters.
6. Systems and Governance Approaches
Challenge: Scaling interventions in isolation risks counterproductive trade-offs. Balancing food
security, nutrition, environment, and livelihoods requires an integrated governance approach.
Suggestions:
i. Develop calibrated, intervention-specific roadmaps for crop diversification, natural
farming, and livestock productivity, grounded in economic, environmental, and social
feasibility and sequenced geographically.
ii. Adopt an agri-food systems approach linking production, processing, distribution,
consumption, and waste, so nutrition, environment, and livelihoods progress together.
Operationalise through district-focused programmes e.g., Pradhan Mantri Dhan Dhaanya
Krishi Yojana (PMDDKY) type designs that align production, diets, climate-resilient
seeds, irrigation, and post-harvest infrastructure. 108
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
5.6 WASTE
Waste sector emissions include emissions from solid waste management and from domestic and
industrial wastewater. In 2020, the sector accounted for just 2.56% of India’s total GHG emissions,
but its emissions have risen by over 7.3% between 2011 and 2020, driven by population growth,
urbanisation and higher waste generation. Wastewater treatment and discharge contributed to
74% of the sector’s emissions, while solid waste disposal contributed 26%. Methane (CH4) is
the dominant gas emitted across both streams.
x
India’s urban population is projected to reach 51% by 2047, up from 37% in 2023. This
rapid urbanisation, combined with population growth, economic expansion, and changing
consumption patterns, will significantly increase municipal solid waste (MSW) and wastewater
volumes, further intensifying emissions.
i. Solid Waste: India generated about 100.9 MT of solid waste in 2020, of which 61%
was landfilled and the rest treated, processed, or incinerated. Of the processed waste,
28.5% was composted, 0.9% bio-methanated, 0.02% converted to bio-CNG, 0.5%
recycled, and 2.8% incinerated (including RDF and pelletisation).
ii. Domestic Wastewater: In 2020, India generated 77,256 Million Litres per Day (MLD) of
urban and 143,917 MLD of rural wastewater. Rapid population growth and urbanisation
are driving this increase, while inadequate infrastructure hampers collection and
treatment. In rural areas, only 3% of households have sewer connections, 36% use
septic tanks, and 25% rely on pit latrines. In urban areas, 47% households use septic
tanks, 33% are connected to sewers, and 55.1% of collected sewage remains untreated.
Among treatment facilities, 63.75% use aerobic processes and 36.25% use anaerobic
treatment.
iii. Industrial Wastewater: India generated about 18836 MLD of industrial wastewater
in 2020 (estimate-based) with more than three-fourth contributed by pulp & paper
(43%), dairy (18%), and fertiliser (17%) segments.
5.6.1 Waste Generation and Emissions
Solid waste: India’s solid waste is projected to rise from 100.9 MT in 2020 to 476.2 MT by 2070
(CAGR ~3.2%), driven by rapid urbanisation, population growth, and changing consumption with
urban areas accounting for most of the increase (Figure 5.18b).
Domestic Wastewater: India’s domestic wastewater generation is expected to rise from 221,173
MLD in 2020 to 265,791 MLD by 2070, (see Figure 5.18a). Urban wastewater will grow from
77,256 MLD to 171,938 MLD, while rural wastewater will decline from 143,917 MLD to 93,853 MLD
due to falling rural population shares (from 65% to 35%). This shift eases rural infrastructure
pressure but calls for major investments in urban sewer networks and treatment facilities.
x ICLEI South Asia. Low Carbon Action Plan for the Waste Sector of Bihar. 2023. Available at: https://southasia.
iclei.org/wp-content/uploads/2024/05/Bihar-LCAP-Waste-Sector-Report_Combined_low-res.pdf (accessed 08
September 2025). 109
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
0
100
200
300
400
500
600
2020 2025 2050 2070
Solid Waste Generation
0.5
0
 1.0
 1.5
 2.0
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 3.5
2.4
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3.3
101
125
333
476
2020 2025 2050 2070
Wast e Water Generat ion
IndustrialDomesti c
Lakh  MLDMillion Tonne
Figures 5.18a & 5.18b: Wastewater generation (domestic and industry) projections in India, projected
solid waste generation in India
Industrial wastewater: Industrial wastewater is projected to rise sharply by 2070, driven by
growth in sectors such as dairy, petroleum, sugar, fish processing, textiles, paper and pulp,
fertilisers, and meat (Figure 5.18a). These industries generate high organic wastewater and
methane emissions, highlighting the need for efficient treatment technologies and sustainable
wastewater management.
These projections underscore the need for stronger infrastructure and policy to manage rising
waste and wastewater. Emissions modelling for the sector uses Current Policy Scenario (CPS)
and Net Zero Scenario (NZS) to guide its strategies and activities.
CPS projects outcomes from 2020–2070 under existing measures and gradual efficiency gains.
By 2070, urban solid waste is expected to be 85% processed and 15% landfilled; rural is 50/50,
with urban open burning phased out after 2030. Sewer coverage is likely to reach ~65% in
urban and ~50% in rural areas. Wastewater treatment plants improve efficiency, achieving ~10%
methane recovery. Industrial wastewater emissions remain broadly flat due to limited technology
shifts.
The NZS aligns with India’s 2070 Net Zero goal, prioritising circularity and low-carbon
technologies. Urban per-capita waste is expected to stabilise after 2040; bio-methanation and
bio-CNG expand significantly. Sewer coverage targets ~85% in urban/60% in rural; while STPs
undergo full upgrades, achieving 100% methane recovery from anaerobic systems by 2047.
Industrial wastewater moves towards near-zero methane via improved aerobic treatment and
enhanced recovery from anaerobic units.
xi
Based on these assumptions to model two scenarios, waste sector emissions are projected to
be lower by 95.9% in Net Zero Scenario (NZS) compared to Current Policy Scenario (CPS),
reaching 10.9 MtCO₂e by 2070, as shown in Figure 5.21. The largest reduction is expected
from industrial wastewater (49.4%), followed by domestic wastewater (37%) and solid waste
management (13.6%).
xi These assumptions are further elaborated in the detailed sectoral report on the Waste Sector – Volume II. 110
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
0
50
100
150
200
250
300
129
220
47
266
17
2020* 20502070
Waste Sector GHG  Emissions
Solid Was te Management Domsti c Wastewater
Industrial Wa stewater
CPS NZS CPS NZS
Milli on Tonne
Figure 5.19: Projected emissions from waste sector by 2050 and 2070 under Current Policy Scenario
(CPS) and Net Zero Scenario (NZS)
To move towards a Net Zero future, India will need to focus on continuously revising its Net
Zero strategies to address residual/remaining emissions from the waste sector. It is crucial
to acknowledge that the level of effort outlined in the NZS requires adaptation measures,
substantial policy support, enabling frameworks, overcoming implementation barriers, capacity
building, and financial support from city, state, and national governments, and the international
community.
5.6.2 Challenges and Suggestions
India’s waste sector sits at the intersection of urbanisation, public health, resource efficiency, and
climate mitigation. While policy intent has strengthened over the past decade, implementation
on the ground remains uneven. The challenges span the full waste lifecycle-generation,
segregation, collection, processing, treatment, disposal, and are compounded by data gaps,
financing constraints, behavioural barriers, and institutional capacity limitations. Addressing
these challenges is critical not only for environmental outcomes, but also for India’s pathway
to Net Zero emissions and sustainable urbanisation.
1. Waste Generation and Handling
Challenge: India’s solid waste and wastewater volumes are rising rapidly with urbanisation
and changing consumption patterns, while engineered disposal space, sewerage networks and
treatment capacity have to keep pace. Overburdened dumpsites, unsafe landfills, untreated
sewage and weak faecal sludge systems can increase public health risks, pollute rivers/
groundwater, and lock in avoidable methane emissions. A key driver of poor outcomes can
be limited source segregation, which contaminates recyclables and organics, undermines low-
carbon processing (composting/bio-methanation), and reduces overall recovery value. The core
challenge is not only infrastructure deficit, but also the sustained O&M capacity required to
keep assets functional across diverse geographies. 111
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
Suggestions:
i. Reduce waste at source and strengthen circularity through Extended Producer
Responsibility (EPR), eco-design incentives, eco-labelling, and the development of
eco-industrial parks focused on recycling industries.
ii. Achieve 100% door-to-door collection, supported by waste quantification surveys to
identify leakage (Swachh Bharat Mission 2.0).
iii. Strengthen primary collection by identifying the required workforce and vehicle
capacities and deploying compartmentalised vehicles for segregated waste streams.
iv. Build/upgrade transfer stations where haul distances are high; minimise handling and
add pre-sorting/decentralised Material Recycling Facilities (MRFs) where segregation
is weak.
v. Expand sewerage wherever feasible to reach ~85% coverage, and deploy decentralised/
on-site alternatives where centralised systems are not viable
2. Waste processing
Challenge: Scientific processing remains limited, informal recycling is under-integrated, and
plastics leak into waterways and ecosystems. Emerging end-of-life streams (solar PV and
batteries) can rapidly scale without traceability and recycling capacity, creating environmental
risk and future material insecurity.
Suggestions:
i. Match processing choices to local waste composition and ensure adherence to standard
norms to maintain efficiency, sustainability, and scalability.
ii. Expand composting and bio-methanation, prioritising bio-methanation where
segregation is strong.
iii. Target ~85% Municipal Solid Waste (MSW) treatment through a portfolio approach ,
i.e., Bio-CNG, bio-methanation, composting for organics; MRFs for recyclables; Waste
to Energy (WtE) only for non-recyclable dry/mixed waste sending only inert/process
rejects to landfills.
iv. Achieve 100% treatment of collected wastewater by 2047; prioritise anaerobic systems
with methane recovery targets.
v. Promote reuse of treated wastewater (agriculture, construction, horticulture).
3. Cross-cutting areas
Challenge: Capacity constraints, fragmented funding, and poor-quality, non-standardised data
weaken planning, accountability and investment prioritisation.
Suggestions:
i. Continuous training for officials and operators (data protocols, digital tools,
categorisation, QA/QC). 112
Sectoral Transition Pathways Scenarios Towards Viksit Bharat and Net Zero: An Overview
ii. Crowd-in private investment in processing, recycling, sustainable packaging and circular
models; scale Sustainable Alternative Towards Affordable Transportation (SATAT) and
GOBARdhan schemes with greater private participation.
iii. Strengthen behaviour change via MyGov/workshops/education and mainstream
Mission LiFE.
iv. Integrate datasets (CPCB, MoHUA, NITI Aayog, NEERI, SPCBs) with standard methods
and formats via a central digital platform. Enable transparency and third-party
validation.
v. Mandate disaggregated reporting by local bodies (per-capita waste/wastewater,
disposal pathways, and processing outcomes) to improve planning accuracy. 6
FINANCING NET
ZERO PATHWAYS
FOR INDIA 114Scenarios Towards Viksit Bharat and Net Zero: An Overview
6
Financing Net Zero
Pathways for India
6.1 BACKGROUND
Globally, finance for climate action rose to about USD 1.9 trillion annually in 2023 but remained
well below the USD 6–9 trillion required annually to stay on a 1.5°C trajectory. Finance flows
remain heavily concentrated with 80% flows to three regions namely East Asia, Western Europe,
and North America, leaving South Asia and Sub-Saharan Africa dependent on limited public
sources. Debt dominates these global flows, while adaptation and early-stage technologies
continue to be underfunded.
In the Indian context, cumulative investment needs are estimated at USD 15–20 trillion by 2070,
translating into USD 300-450 billion per year compared to annual flows of USD 135 billion
in 2024 (of which only USD 70-80 billion supports clean energy). This large financing gap
compounded by high capital costs, limited concessional finance, and structural constraints deter
investment in India’s low-carbon sectors.
While several studies assess climate finance needs, they differ in scope, methodology and time-
horizon. India’s transition spans technologies at different maturity levels. For instance, mature
renewables need low-cost capital, and mid-stage options like storage and e-mobility require
concessional or structured finance. Frontier areas such as Green hydrogen and Carbon Capture,
Utilisation, and Storage (CCUS) depend on grants and blended capital. A stage-sensitive,
technology-specific financing strategy is therefore essential.
This report addresses some of these limitations by developing a comprehensive assessment
of investment needs, aggregate flows from domestic (Institutional capital, Banks/Non-Banking
Financial Companies (NBFCs), Capital market), and foreign sources (Foreign Direct Investment,
Foreign Portfolio Investment and External Commercial Borrowing) and assessing the financing
gap at both aggregate and sectoral level. The study adopts an asset-flow model to estimate
the likely availability of finance across sectors under a plausible set of enabling reforms.
In this study, the assessment was deliberately scoped to estimate the finance required to achieve
India’s Net Zero goal, and did not include detailed costing of climate adaptation measures.
At the national level, the Ministry of Environment, Forest and Climate Change (MoEFCC) is
currently leading the preparation of India’s first comprehensive National Adaptation Plan (NAP)
which will provide a strategic framework for identifying adaptation priorities and estimating
financing needs for adaptation, consistent with Government of India and UNFCCC guidance.
Subsequent versions of NITI’s study will incorporate adaptation cost assessments to present a
more holistic view of financing requirements.
(Scenarios towards Viksit Bharat and Net Zero: Financing Needs (Vol. 9) examines these issues
in depth, this chapter synthesizes the key findings from that detailed analysis.) 115
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
Caveat: The study estimates India’s investment needs and projected capital availability across
three key mitigation sectors–power, transport, and industry. The estimates presented are indicative
in nature and are contingent on underlying assumptions and specific modelling choices, including
technology pathways, policy trajectories, and cost parameters. The results should be interpreted
as directional rather than definitive. Other mitigation-relevant sectors, including buildings, waste,
etc. are not included in the current investment estimation but are included for energy and
emission estimation. These sectors will be analysed and incorporated in subsequent iterations
of the study to provide a more comprehensive investment assessment.
6.2 RESULTS
6.2.1 Investment Requirement for Net Zero
The study assesses the cumulative investment requirement at USD 22.7 trillion by 2070 in
Net Zero Scenario, with the power sector accounting for more than half of the investment
requirement to drive higher demand electrification and to meet this demand through low-
carbon power sources. Out of the total cumulative investment, USD 8 trillion needs to be
front-loaded by 2050 with almost USD 5 trillion needed in the power sector, as most of the
low-carbon technologies require substantial up-front investment.
After 2050, the Net Zero pathway shifts from scaling proven technologies to deploying risk heavy
technologies. Green hydrogen becomes central for hard-to-abate sectors, while CCUS and DAC,
negligible before 2050, scale up. Although investments in renewables and T&D continue, their
relative share declines as frontier technologies absorb a larger portion of capital, explaining the
higher long-term investment requirement.
In comparison with other studies, the quantum of investment differs due to differences in
scope, methodology and time-horizon, the sectoral pattern remains consistent: the power
sector accounts for highest share in investment needs, followed-by transport and industry (See
Figure 6.1).
Estimates of Incremental Investment Requirements: The study estimates cumulative investment
at USD 14.7 trillion in Current Policy Scenario and USD 22.7 trillion in Net Zero Scenario. Therefore,
there is an incremental requirement of USD 8.1 trillion needed for Net Zero which reflects the
cost of accelerated low-carbon technology deployment, policy interventions, and system-level
investments essential for aligning with the net-zero pathways. At a sectoral level, the power
sector accounts for the largest share of the incremental requirement (about USD 4.5 trillion),
followed by industry (USD 2.7 trillion), and transport (USD 0.9 trillion) (See Figure 6.2). 116
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
12.3
4.3
6.1
22.7
8.4
0.2
1.5
10.1
9.0
7.8
2.8
19.6
0.0
7.5
15.0
22.5
30.0
Power sector Transport sector IndustryTotal
USD Trillion
NITI Aayog CEEW UBS
Figure 6.1: Estimates on cumulative investment requirements for Net Zero across various studies
xii
Current Policy Scenario Net Zero Scenario Incremental
7.79
3.443.42
14.66
12.33
4.30
6.11
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4.54
0.86
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0.0
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USD Trillion
Figure 6.2: Sector-wise estimates of cumulative and incremental investment
requirements for Net Zero by 2070
Technology-wise Investment Requirements: Up to 2050, the Current Policy and Net Zero
pathways remains anchored in electrification and network buildout with the power sector
accounting for more than half of the investment. The largest incremental differences with the
Current Policy Scenario arise from higher investments in transport electrification, grid storage,
and enabling infrastructure, reflecting the need to scale charging networks and system flexibility.
By contrast, investment in frontier solutions such as Carbon Capture, Utilisation, and Storage
xii Note: UBS estimates include Power–Renewable capex for utilities, Solar PV Manufacturing, Storage CAPEX from
utilities, Transmission capex, overheads; Transport – EV battery capex from OEMs, EV battery manufacturing,
overheads; Industry – Storage battery manufacturing, Associated equipment and systems, Green hydrogen,
Electrolysers manufacturing, overheads. 117
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
(CCUS), Direct Air Capture (DAC), offshore wind, and Small Modular Reactors (SMRs) remains
limited by mid-century, underscoring that the near-term transition is driven primarily by scaling
proven technologies rather than deep industrial transformation (See Figure 6.3).
0.00.20.40.60.81.0 1.2 1.4 1.6 1.8
Transport*
Industry (Including Captive)
CCUS/DAC
GH2 (RE+Electrolyser)
Utility RE (Excluding Of-shore Wind)
Utility Fossil
Grid Storage
Of-shore Wind
Nuclear
T&D
Net Zero Scenario Current Policy Scenario
USD trillion
(A)
0.0 1.0 2.0 3.0 4.0 5.0 6.0
Transport
Industry (Including Captive)
CCUS/DAC
GH2 (RE+Electrolyser)
Utility RE (Excluding Of-shore Wind)
Utility Fossil
Grid Storage
Of-shore Wind
Nuclear
T&D
USD trillion
Net Zero Scenario Current Policy Scenario
(B)
Figure 6.3: (A) Total cumulative investment required (2025-2050): USD 8.1 trillion (NZS)
vs USD 5.8 trillion (CPS) (B) Total cumulative investment required (2025-2070): USD
22.7 trillion (NZS) vs USD 14.6 trillion (CPS) 118
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
By 2070, the Net Zero investment requirements profile diverges sharply, marking a shift
towards hard-to-abate solutions. Green hydrogen (including renewable capacity dedicated
to electrolysers) emerges as a core pillar of the Net Zero pathway, absorbing a materially
larger share of capital than under the Current Policy pathway and signalling its central role
in promoting low-carbon transition in steel, refining, fertilisers, and long-distance transport.
Carbon Capture, Utilisation, and Storage (CCUS) and Direct Air Capture (DAC), negligible
before 2050, scale meaningfully only in the later decades, highlighting their role as backstop
solutions for residual emissions rather than early levers. While investments in mature renewables
and networks continue, their relative share declines as the transition increasingly depends on
capital-intensive, technology and risk-heavy solutions, underscoring why post-2050 financing
challenges are fundamentally different from those of the near term.
6.2.2 Availability of Investments
The previous sections estimated that India needs USD 22.7 trillion of investment for Net Zero
pathway by 2070. It also estimated that there is an incremental finance need of USD 8.1 Trillion
over the Current policy Scenario. This section looks at the availability of finance from both
domestic and international sources.
Figure 6.4 shows the projected flows from various sources (domestic and international) mapped
to end use sectors (power, transport, and industry). It also shows the various instruments (equity,
debt, and bonds).
With coordinated reforms across domestic and external fronts, this study estimates that India
can credibly mobilise around USD 16.2 trillion towards its Net-Zero transition by structurally
expanding the scale, depth, and efficiency of capital. Domestically, this requires deepening
the corporate bond market from ~16% of GDP in 2023 to ~30% by 2070, and increasing the
financialisation of household savings from about 60% in 2023 to 75% by 2070. It also requires
enabling institutional funds such as pensions and insurance to reduce their exposure to
government securities from 55–60% to around 50% by 2070 while protecting investor returns
through diversified, high-quality corporate and green assets. Externally, it needs scaling FDI to
3–4% of GDP and tripling Foreign Portfolio Investment (FPI) participation by 2047. This should
be supported by credible transition roadmaps and a strong pipeline of bankable projects.
In terms of sources, banks and Non-Banking Financial Companies (NBFCs) continue to dominate,
accounting for 42% of the total flows, followed by institutional investors and corporations (36%).
In terms of instruments, the financing mix continues to be driven by equity (49%) and loans
(45%) with a complementary role played by bonds. Across sectors, capital allocation continues
to be concentrated in the power sector (43%), followed by industry and transport. 119
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
NBFCs: Non- Banking Financial Institutions
PE/VC: Private Equity and Venture Capital
FDI: Foreign Direct Investment
FPI: Foreign Portfolio Investment
Figure 6.4: Projections of the sources and end use of finance supply
for Net Zero (2026-70, USD billion) 120
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
Sectoral Analysis
The Power sector attracts the largest share of aggregate flows (USD 6.9 trillion) and is
overwhelmingly domestically financed (~86%). Domestic banks and NBFCs are the dominant
financiers, while foreign capital plays a smaller but still meaningful role, led mainly by FDI. The
financing structure is debt-heavy, with loans accounting for just over half of total flows, followed
by equity; bonds play a relatively limited role, indicating reliance on balance-sheet lending
rather than capital markets.
The Transport sector accounts for USD 4.0 trillion, with a higher foreign share (~24%) compared
to power, reflecting stronger participation of external investors. Domestic finance is still led by
banks and NBFCs, while foreign inflows are significant. Unlike power, transport financing is split
almost evenly between equity and loans, suggesting projects rely on project equity and bank
lending.
The Industry sector absorbs USD 5.3 trillion and shows a more diversified financing mix. While
domestic sources dominate (~77%), foreign capital is substantial, again largely via FDI. On the
domestic side, banks and NBFCs remain important, but institutional investors play a nearly equal
role, indicating deeper capital-market participation. Equity is the primary instrument (around
60%), with loans secondary, pointing to higher risk-sharing and growth-oriented financing
relative to power and transport.
6.2.3 Assessing India’s Net Zero Financing Gap
Against an investment need of USD 22.7 trillion for the Net Zero Scenario and estimated
aggregate flows of USD 16.2 trillion, a financing gap of USD 6.53 trillion emerges, even with
enabling measures on both the domestic and foreign fronts. Given that additional domestic
finance remains scarce and that higher demand for domestic finance can crowd out investment
and raise interest rates, thereby impacting economic growth, this financing gap is expected to
be bridged by external sources. This raises the contribution of international sources to 42% of
total capital needs by 2070, compared to 17% of flows from international sources in FY 2022–23.
External capital therefore has a crucial role to play in India’s Net Zero transition, especially in
the form of concessional capital and grant to support technologies which are needed for Net
Zero but are presently not commercially viable.
For 2026-2050, the financing gap is estimated at USD 2.5 trillion or USD 100 billion per
year. The power sector remains the primary driver of this gap (~USD 80 billion per year),
accounting for the bulk of investment requirements in renewable energy, transmission, and
storage infrastructure. Industry and transport sectors also have a financing gap as they enter
more capital-intensive phases of low-carbon transition.
For 2026-2070, the overall financing gap expands to USD 145 billion per year of additional
investment (Figure 6.5). The power sector financing gap rises from USD ~80 billion per year till
2050 to 120 billion per year till 2070. The escalation reflects the intensification of low-carbon
transition efforts across all sectors, led by the power sector’s transition toward full renewable
integration and large-scale storage. Industry faces growing costs from advanced technologies
such as Carbon Capture, Utilisation, and Storage (CCUS) and green hydrogen, while transport’s
financing demand increases with the full rollout of EVs, clean freight, and sustainable fuels. 121
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
5.56
16.22
8.05
22.74
-2.49
-6.52
-10
0
10
20
30
2026-502026-70
USD Trilli on
Financing Available Financing Needs Financing Gap
Figure 6.5: Projections of total needs, availability and gap (USD trillion)
Power sector: The analysis reveals a significant and widening financing gap in India’s power
sector as the country advances toward its Net Zero 2070 target. Till 2050, the cumulative
financing needs for the power sector are estimated at USD 4.32 trillion, while available finance is
projected at USD 2.34 trillion, resulting in a funding shortfall of USD 1.98 trillion. This gap more
than doubles for 2070 needs, reaching USD 5.4 trillion, as cumulative financing requirements
rise sharply to USD 12.33 trillion against an availability of USD 6.93 trillion (Figure 6.6). The
expansion of this gap underscores both the scale of investment required and the structural
challenges in mobilising long-term, low-cost capital for renewable energy, grid modernisation,
and storage technologies.
2.34
6.93
4.32
12.33
-1.98
-5.40
-10
-5
0
5
10
15
2026-502026-70
USD Trilli on
Power
Financing Available Financing Needs Financing Gap
Figure 6.6: Power sector: Projections of total needs, availability and gap (USD trillion) 122
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
The substantial and growing gap also highlights the sector’s heavy dependence on banks and
NBFCs for debt financing, which are likely to face their own capital and exposure constraints
over time. To meet its long-term financing needs, the power sector will need to diversify funding
sources and increasingly tap bond markets and other capital market instruments to secure
scalable, long-term debt capital. In addition, mobilising external sources of patient capital such
as global sovereign wealth funds, pension funds, and other long-term institutional investors will
also be critical to bridge the financing gap.
Transport sector: The transport sector shows a comparatively modest financing gap relative
to other sectors, but its magnitude and implications are still significant given the sector’s rapid
growth trajectory. By 2050, cumulative mitigation finance needs are projected at USD 1.54 trillion,
against USD 1.32 trillion in available financing, implying a shortfall of USD 0.22 trillion. This gap
widens slightly by 2070, reaching USD 0.3 trillion, with cumulative financing needs increasing
nearly threefold to USD 4.3 trillion, while available capital grows to USD 4.01 trillion (see Figure
6.7). Although the proportional gap narrows with time, the absolute financing requirements for
low-carbon transition in India’s transport system increase, reflecting the scale-up required in
electric mobility, biofuels, hydrogen infrastructure, and electrification.
1.32
4.01
1.54
4.30
-0.22-0.29
-2
0
2
4
6
2026-502026-70
USD Trilli on
Transport
Financing Available Financing Needs Financing Gap
Figure 6.7: Transport sector: Projections of total needs, availability and gap (USD trillion)
Industry sector: The industry sector exhibits a growing financing shortfall with increasing
decarbonisation needs. By 2050, cumulative financing requirements are estimated at USD 2.19
trillion, compared with USD 1.9 trillion in available finance, implying a financing gap of USD
0.3 trillion. However, by 2070, cumulative financing needs rise sharply to USD 6.11 trillion, while
available capital is USD 5.28 trillion, widening the gap to USD 0.83 trillion (see Figure 6.8). This
increasing shortfall reflects the mounting costs of transitioning India’s hard-to-abate industries
such as steel, cement, chemicals, etc. toward low-carbon technologies like green hydrogen,
Carbon Capture, Utilisation and Storage (CCUS), Direct Air Capture (DAC), and electrified
industrial processes. 123
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
1.90
5.28
2.19
6.11
-0.29
-0.83
-2.
0
2
4
6
8
2026-502026-70
USD Trillio n
Industry
Financing Available Financing Needs Financing Gap
Figure 6.8: Industrial sector: Projections of total needs, availability and gap (USD trillion)
6.2.4 Challenges and Suggestions
Taken together, the results underscore both the scale and the structural complexity of financing
India’s Net-Zero transition. While coordinated reforms could significantly expand the availability
of capital and mobilise substantial domestic and foreign flows, a persistent and widening
financing gap remains across sectors. Moreover, the evolving investment profile from mature
renewables in the near term to capital-intensive and risk-heavy frontier technologies in the long
term implies that financing constraints are not merely quantitative but also qualitative, relating
to risk allocation, cost of capital, tenor, and instrument suitability. These findings point to a set
of systemic, market, and policy challenges that must be addressed to translate potential capital
availability into actual, timely investments. The following section examines the key barriers to
climate finance mobilisation in India and outlines targeted recommendations to bridge the
identified gaps and enable a sustainable pathway to net zero.
1. Data, definitions, and transparency to build a credible data backbone
Challenge: India’s transition hinges on transparent, comparable finance and emissions data.
However, divergent methods, limited reporting, and uneven corporate reporting even with
SEBI’s Business Responsibility/Business Responsibility and Sustainability Reporting-Core
xiii
blur
the real financing gap and weaken investor confidence.
Suggestions:
i. Establish a unified national climate finance data platform that tracks SEBI Business
Responsibility and Sustainability Reporting disclosures, Carbon Credit Trading Scheme
(CCTS) registry entries, and government finance. This will enable coherent tracking,
facilitate cross-verification, and close persistent information gaps.
xiii BRSR refers to SEBI’s Business Responsibility and Sustainability Reporting, introduced in 2021 for the top 1,000
listed companies by market capitalisation. BRSR-Core is the mandatory assurance component notified in 2023,
requiring third-party verification of nine Key Performance Indicators (KPIs) covering emissions, energy, water, and
supply-chain disclosures. 124
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
ii. Mandate independent third-party assurance at scale enforcing high-quality
Measurement, Reporting, and Verification (MRV) under CCTS and instituting external
audits for Climate Finance Taxonomy compliance.
iii. Develop a sectoral Life Cycle Assessment (LCA) repository to set science-based
emissions baselines for key industries, support taxonomy thresholds, and strengthen
the credibility of CCTS reporting.
2. Regulatory coherence and market signals to align to Department of
Economic Affairs’ Climate Finance Taxonomy
Challenge: India’s climate finance regulations are being developed by multiple autonomous
regulators (RBI, SEBI, IRDAI, PFRDA, IFSCA) with different lenses, timelines, and disclosure
frameworks. This siloed approach risks inconsistent definitions, overlapping requirements, and
regulatory arbitrage, which can amplify greenwashing risk, weaken market signals, and prevent
a system-wide view of climate risk.
Suggestions:
i. Adopt the Climate Finance Taxonomy prepared by the Department of Economic
Affairs (DEA) as the single reference system, aligning rules, disclosures, and prudential
treatment across all regulators.
ii. Mandate cross-regulator harmonisation of definitions, data, and disclosures anchored
to the taxonomy.
iii. Apply proportionality (risk-based, size-appropriate obligations) so that smaller entities
face calibrated requirements without eroding credibility.
iv. Strengthen the existing working group mechanisms such as Finance Stability and
Development Council (FSDC) and Sustainable Finance Group housed in RBI to address
climate change and climate finance issues.
3. Building bankable project pipeline through Accelerating Sustainable State
Energy Transition (ASSET) platform
Challenge: Deployment of investments at scale requires a pipeline of credible and bankable
projects. However, several factors deter projects from achieving financial closure despite available
liquidity. In the power sector, discom financial distress, weak creditworthiness, and uneven Power
Purchase Agreement (PPA) enforcement elevate financing costs. Technologies such as offshore
wind and energy storage lack mature risk-mitigation and refinancing instruments. In industry,
high upfront costs and uncertain paybacks deter decarbonisation, especially for MSMEs that
face credit constraints and limited access to blended finance and de-risking facilities. Transport
finance is mode-specific and fragmented; private participation in metros and rail is limited, and
EV adoption faces high capital costs. In buildings, small-ticket fragmentation, long paybacks,
split incentives between owners and occupants, and weak enforcement of energy codes keep
efficiency upgrades and retrofits outside mainstream finance. 125
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
Suggestions:
i. Use ASSET platform for building a project pipeline: Building on the National
Infrastructure Pipeline (NIP) and National Monetisation Pipeline (NMP) playbook,
it is important to identify high value clean energy projects and help them achieve
financial closure with appropriate instruments. States are very important in design and
implementation of clean energy projects.
Accelerating Sustainable State Energy Transition (ASSET) Platform
NITI Aayog, in collaboration with the Ministry of Power and the Ministry of New and Renewable
Energy, launched the ASSET platform in November 2024. The platform is set-up with the objective
of formulating state energy transition blueprints along with aiding in its implementation, preparing
a pipeline of bankable projects and showcasing best practices across states.
ASSET can unlock early wins in many areas such as:
i. Urban Local Bodies (ULB) water-pumping upgrades through standardised energy
audits, demand aggregation, and ESCO/RESCO models backed by pooled payment
security.
ii. Scaling efficient air-conditioning by aggregating replacement demand and embedding
high-efficiency appliances in new housing via green finance incentives (e.g., concessional
developer finance, property-tax rebates, and green mortgages) alongside efficiency-
code nudges.
iii. Electrifying municipal garbage truck fleets using aggregated procurement and risk-
mitigation/structured finance to overcome high upfront costs and elevated financing
rates driven by technology and residual-value risk.
iv. Financing Metro Systems through Transit-Oriented Development (TOD) and value
capture.
v. EV adoption accelerated through anchor fleet contracts (logistics/e-commerce) and
route-based aggregation to create predictable cashflows.
vi. Industries to adopt efficiency or renewable solutions through ESCO/RESCO models,
which can be pooled to provide scale and combined with risk guarantee mechanisms
to improve project viability for investors.
vii. Implement blended finance solutions to promote adoption of waste heat recovery,
low-carbon process electrification, energy-efficient motors, and circularity.
ASSET is a recent initiative, its expansion should be phased with ASSET targetting early wins
in areas where aggregation and standardised contracting can quickly improve bankability. This
includes Urban Local Bodies (ULB) water pumping efficiency upgrades, high-efficiency cooling
programmes, and electrification of municipal fleets. Any scale-up should be guided by a clear
performance assessment framework and follow-on actionable recommendations, to avoid
premature expansion and strengthen credibility with financiers. 126
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
4. Cost of capital and technology readiness addressed by blending risk by
stage
Challenge: Climate transition is constrained as much by the cost of capital as by the availability
of capital. The cost of capital stays high because investors price in sovereign risk alongside the
additional uncertainty of new technologies. The result is a much higher Weighted Average Cost
of Capital (WACC) than in advanced economies. Climate Policy Initiative’s (CPI) study estimates
investors seek about 15.9% returns on clean energy investment in India versus 8.3% in Germany.
At these rates, big, early-stage bets in green hydrogen, CCUS, and hydrogen-based steelmaking
struggle to reach financial closing unless they come with credible de-risking/blended finance
to bring risk premia down.
Suggestions:
i. Blended finance: Deploy concessional/junior tranches, interest buy-downs, and
subordinated equity to improve project credit profiles.
ii. Credit wraps for First-of-a-Kind (FOAK) projects: Use first or second-loss guarantees
and performance/resource insurance (with Development Financial Institution/
Multilateral Development Bank participation) to crowd in senior lenders to hydrogen,
CCUS, long-duration storage, and offshore wind.
iii. Revenue certainty: Standardise long-term Power Purchase Agreements and strengthen
offtake credit enforcement.
iv. Targeted support: Use Viability Gap Funding (VGF) with sunset clauses and dedicated
credit lines for near-commercial/emerging technologies; fund R&D/demonstration to
build bankable operating histories.
5. Bridging India’s energy transition financing gap through domestic and
external capital mobilisation
Challenges: Current financial flows into India’s energy transition fall well short of the scale
required to meet future demand. The present study estimates that India will need approximately
USD 22.7 trillion in cumulative investment by 2070 to achieve a successful transition covering
both fossil and non-fossil sources. This translates to USD 450 billion annually, almost nine times
higher than the current flow of around USD 50 billion (annual average of FY2020-22).
Suggestions:
i. Domestic reforms to boost capital availability:
i. Deepening the corporate bond market from about 16% of GDP today to 25%
by 2047 and 30% by 2070 through streamlined regulation, digitised issuance,
improved liquidity, and a broader investor base.
ii. Reorienting long-term institutional portfolios toward green and transition assets
by reducing insurers’ and pension funds concentration in government securities
from around 55-60% to about 50% by 2047 and redirecting flows into high-quality
corporate and green debt.
iii. Mobilising household savings through transparent, low-risk products digitally
linked to green infrastructure. 127
Financing Net Zero Pathways for India Scenarios Towards Viksit Bharat and Net Zero: An Overview
ii. External reforms:
i. Proactively target long-term foreign capital including FDI, sovereign wealth
funds, and global pension funds to supplement domestic pools and ease upward
pressure on domestic borrowing costs. This requires establishing standardised
co-investment platforms anchored in International Financial Services Centres
Authority (IFSCA)/Gujarat International Finance Tec-City (GIFT City).
ii. Scaling FDI from about 2.3% of GDP today to 3–4% by 2047 by enabling strategic
technology partnerships, credible transition roadmaps, and a sustained pipeline
of bankable projects.
iii. Expanding foreign portfolio investment participation from around 0.5% to about
1.5% of GDP by 2047 by reducing currency risk through deeper FX markets,
longer-tenor hedging instruments, and supportive regulatory access.
6. Transition finance to bridge brown-to-green credibly
Challenge: India’s transition is not only about “pure green” assets, it also requires decarbonising
carbon-intensive incumbents like steel, cement, coal-linked power, refineries, and heavy transport
without constraining growth. In 2024, the IEA World Energy Investment report estimated India’s
total energy investment at USD 135 billion of which USD 87 billion is supporting clean energy.
This highlights that even in the current context, there is significant investment in fossil assets
which cannot be replaced overnight; transition finance is the bridge.
Suggestions:
i. Clear rules & labels: Operationalise IFSCA’s transition framework and SEBI’s
Sustainability-Linked Bonds (SLBs)/Transition Bonds; align with the Department of
Economic Affairs’ Climate Finance Taxonomy (recognising transition activities).
ii. Credible pathways: Tie financing to time-bound, third party-verified transition plans
with penalties for missed targets.
iii. Fit-for-purpose instruments: Use Transition Bonds and SLBs for specific brown-to-
green actions (e.g., clinker substitution, DRI-H₂ pilots, waste-heat recovery).
iv. Risk-sharing: Lower costs via partial/first loss/second loss guarantees and FX hedging
with MDB/DFI support to reduce pressure on domestic public balance sheets.
v. Market plumbing & disclosure: Extend Business Responsibility and Sustainability
Reporting (BRSR) to cover transition plans and post-issuance reporting. Any inclusion
of Scope 3 disclosures should be phased and proportional starting with large entities
in high-impact sectors to avoid disproportionate compliance burdens on MSMEs and
smaller suppliers. 7
MACROECONOMIC
IMPLICATIONS OF NET
ZERO TRANSITION 130Scenarios Towards Viksit Bharat and Net Zero: An Overview
7
Macroeconomic
Implications of Net
Zero Transition
7.1 BACKGROUND
As emphasized in the previous sections, this report first discusses India’s aspiration of becoming
a developed economy, Viksit Bharat by 2047 with a growth target of USD 30 Trillion by 2047.
The implication of this growth pathway across key energy consuming sectors such as Industry,
Transport, Power, Buildings and Agriculture are assessed.
While meeting this developmental objective, the report extends the analysis by imposing an
additional goal of achieving Net Zero greenhouse gas (GHG) emissions by 2070. This involves
evaluating sector-specific technology and policy options required to deliver Net Zero outcomes.
While several of these technologies are already commercially mature and cost-competitive,
others such as Green Hydrogen, Small Modular Nuclear reactors, and Carbon Capture, Utilisation
and Storage (CCUS) are at varying stages of development, with commercial viability expected
to emerge over time as costs decline and deployment scales up.
In this context, a critical question that emerges is about reconciling the pursuit of a Net Zero
pathway with India’s growth aspirations. This question is particularly salient given that the
primary objective remains the achievement of developmental goals, even as India contributes
to addressing the global challenge of climate change. The potential risk of technological lock-
in to capital-intensive or uncertain options, such as CCUS, and its implications for long-term
growth warrants careful examination.
A rigorous, economy-wide assessment is therefore undertaken to examine the interactions
between climate action, growth, investment, trade, and employment, and to identify potential
trade-offs and synergies across sectors through two Computable General Equilibrium (CGE)
modelling frameworks: the NCAER model and the World Bank’s MANAGE model
xiv
. The
implications are examined through the Current Policy Scenario (CPS) and multiple Net Zero
Scenarios differing by financing sources, redistributive mechanisms, and productivity co-benefits.
In terms of financing sources, the scenarios explore two extreme scenarios wherein the total
investment required is mobilized completely through domestic sources (NZdom) vs mobilized
through foreign sources (NZfor)
xv
. Within these scenarios, the variation in terms of productivity
co-benefits (represented through “+” scenarios) is also examined, i.e., whether additional
investment from domestic sources is productive (NZdom+) or unproductive (NZdom). In a
xiv MANAGE-World Bank is a Computable General Equilibrium (CGE) model developed by a network of CGE modellers
to support World Bank teams and clients in conducting macroeconomic analyses across a broad range of topics. It
is a single-country, open economy CGE model featuring multiple sectors, institutions, and factors of production.
xv The two scenarios represent two extreme cases in which funding is either completely through domestic or foreign
sources. These are theoretical constructs assumed for the purpose of modelling. Reality will be somewhere between
these two extremes. 131
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
productive scenario, additional investment leads to productivity improvements and high
economic output. The scenarios also examine redistributive policies wherein the impact on
energy prices can be mitigated through energy subsidies. Together, these variants define lower
and upper bounds for the growth implications of a Net Zero transition (see Table 7.1).
Table 7.1: Summary of Net Zero Scenarios using World Bank
xvi
and NCAER models

Benefits from incremental
investment in the Net Zero
Scenarios
Main source of
financing
Complementary measures
to facilitate the transition

Emission
reduction only
Output effectDomestic ForeignRE subsidyRedistribution
NZdom ✔ ✔
NZdom+ ✔✔ ✔
NZfor✔
✔
NZfor+ ✔✔ ✔
NZforSub ✔
✔ ✔
NZdomSub ✔ ✔ ✔
NZforRD ✔
✔ ✔ ✔
NCAER✔
(Scenarios towards Viksit Bharat and Net Zero – Macroeconomic Implications (Vol. 2) examines
these issues in depth, this chapter synthesizes the key findings from that detailed analysis.)
Caveat: These results exclude both negative externalities and positive co-benefits of climate
change. The negative impacts include reduced labour productivity or agricultural losses from
rising temperatures whereas the positive co-benefits include improvements in air quality and
health outcomes, which the model does not capture.
7.2 RESULTS
7.2.1 Impact on GDP
The results show that India’s Net Zero Scenario (NZS) has only a marginal impact on long-term
GDP growth but demands high investment and substantial capital mobilisation, particularly to
scale up nascent and emerging technologies (Figure 7.1 (A)). Across all Net-Zero scenarios, GDP
growth remains broadly aligned with the Current Policy Scenario (CPS). India achieves high-
income status in 2047 (USD 30 trillion) across all scenarios.
While the impact on overall GDP in NZS vs the CPS is marginal, there exist subtle differences
across scenarios depending on source of financing. As seen in Figure 7.1 (B), productive, foreign-
xvi The World Bank MANAGE model analyses seven Net Zero scenarios that vary by financing source, productivity
of incremental capital and redistribution policies. NZdom and NZfor are financed through domestic savings and
foreign capital, respectively; Sub variants add renewable energy subsidies to stabilise electricity prices; NZforRD
includes redistribution to protect the bottom 40% of households; and “+” scenarios assume Net Zero investments
generate productive output gains, representing upper-bound growth outcomes. 132
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
financed scenario (NZfor+) shows enhanced output (+2% during 2045-50 compared to CPS),
while domestically financed scenario has a lower GDP by -4.5% as compared with CPS in 2046-
50. These scenarios present two extreme cases of GDP change with other scenario results
falling within this range.
Trillion INR
0
500
1000
1500
2000
2500
3000
3500
4000
2022
2028
2034
2040
2046
2052
2058
2064
2070
Real GDP levels across all scenarios
CPSNZdom+NZdom
NZfor+NZforNZforSub
NZdomSubNZforRD
(A)
(B)
2022
2028
2034
2040
2046
2052
2058
2064
2070
% GDP deviation
NZdom+NZdomNzfor+
NzforNZforSubNZdomSub
NZforRD
-4.5%
-3.5%
-2.5%
-1.5%
-0.5%
0.5%
1.5%
2.5%
% deviation from CPS
Note: CPS = Current Policy Scenario; NZS = Net Zero Scenario
Figure 7.1 (A) Real GDP levels (trillion INR) (MANAGE model) (B) Net Zero Scenario GDP outcomes
across financing channels (deviation from the CPS in %) (MANAGE model)
7.2.2 Impact on GDP components
As seen in Figure 7.2 (A), in Current Policy Scenario, private consumption’s share in GDP is
projected to reduce from 58% in 2025 to 49% in 2070. Total investment share (public+private)
rises from 32% in 2025 to around 36% by 2050 and moderately reduces to 34% by 2070, a
trend seen in other developed economies. 133
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
Net Zero scenarios relying on domestic financing (NZdom, NZdom+, NZdomsub) generally have
a reducing effect on investment compared to Current Policy Scenario (See Figure 7.2 (B)). This
is most pronounced between 2040 and 2050, when investment under NZdom is lower than
the Current Policy Scenario by about 5%. In contrast, scenarios with external financing (NZfor,
NZfor+, NZforSub, NZforRD) show higher investments. The main reason is the higher real
interest rate under domestic borrowing which constrains access to affordable capital. Higher
interest rates also encourage households to save rather than spend, reducing consumption
in domestically financed scenarios. In the productive investment cases (NZdom+, NZfor+),
however, higher household incomes outweigh the drag from higher interest rates, producing
a net increase in consumption. Therefore, in Net Zero scenarios, domestic financing leads to
tightened liquidity, pushing up interest rates and crowding-out consumption, whereas foreign
financing eases interest-rate pressures and supports higher investment.
India’s transition to high-income status is accompanied by rising trade volumes, with exports
and imports both increasing in absolute terms, while remaining broadly stable as a share of
GDP (Figure 7.2 (C)) at around 23 - 25% under the Current Policy Scenario by mid-century.
Differences across Net Zero pathways are driven largely by financing choices. Domestically
financed scenarios show lower exports, reflecting higher domestic costs and tighter resource
constraints, but these are offset by substantial reductions in fossil fuel imports, resulting in lower
overall trade exposure. Foreign-financed scenarios moderate lowering of exports by avoiding
crowding out and supporting higher investment, though they are associated with larger current
account and trade deficits in the medium term due to higher capital inflows.
As seen in Figure 7.2 (B), in Net Zero scenarios, exports are projected to be lower by 2%
(NZfor+) to 9% (NZdom) relative to Current Policy Scenario, with the variation being maximum
between 2040 and 2050, though pressures ease in later years. These scenarios represent
extreme scenarios with others falling within this range. In case of imports, during 2040-50,
imports are higher by 4% in NZfor+ as compared to being lower by 7% in NZdom relative to
Current Policy Scenario.
60%
50%
40%
30%
20%
10%
0%
2022 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070
GDP components (at constant 2011-12 prices)
Private consumption Public consumption Private investment
Public investment Net exports
(A) 134
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview ffififf₂ ffififf ffififf ffififf ffififf ffifi ffifi ffifi ffifi ffifi ffififf ffififffi ffififf₂ ffififffi ffififf₂ ffififffi ffififffi ffififffi ffififf₂ ffififf ffififf ffififf ffififf ffifi ffifi ffifi ffifi ffifi ffififf ffififffi ffififf₂ ffififffi ffififf₂ ffififffi ffififffi ffififffi ffififf₂ ffififf ffififf ffififf ffififf ffifi ffifi ffifi ffifi ffifi ffififf ffififffi ffififf₂ ffififffi ffififf₂ ffififffi ffififffi ffififffi ffififf₂ ffififf ffififf ffififf ffififf ffifi ffifi ffifi ffifi ffifi ffififf ffififffi ffififf₂ ffififffi ffififf₂ ffififffi ffififffi ffififffi ffififf₂²₄³flafiff ffififf₂²₄³ 30%2514617C0PS7N0Zdo 30%2514617C0PS7N0Zdo 30%2514617C0PS7N0Zdo 30%2514617C0PS7N0Zdo ffififf₂²₄³ ffififf₂²₄³₂fi₄ ffififf₂²₄ ffififf₂² ffififf₂²₄ ffififf₂² ffififf₂²₄³fl ffififf₂²₄³fl ffififf₂²₄³
(B)
30%
25%
20%
15%
10%
5%
0
35%
30%
25%
20%
15%
10%
5%
0
20222025203020352040204520502055206020652070
Exports (% GDP)
CPS NZdom NZfor+CPS NZdom NZfor+
20222025203020352040204520502055206020652070
Imports (% GDP)
(C) 135
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview ffififf₂ ffifi ffififf₂ ffifi ffififf₂ ffifi ffififf₂ ffi ffififfiff ffififffi ffififffi ffififffi ffififffi Current Account Balance on GDP (%)
(D)
Note: CPS = Current Policy Scenario; NZS = Net Zero Scenario
Figure 7.2: (A) GDP components (at constant 2012 prices) in the Current Policy Scenario (MANAGE).
(B) GDP components (% deviation from CPS) (MANAGE) (C) Exports and imports as a percentage of
GDP (MANAGE model) (D) Current account balance (% of GDP, MANAGE model)
The Current Account Deficit is higher in all Net Zero scenarios compared to Current Policy
Scenario. Foreign-financed scenarios show larger Current Account Deficit (CAD) (peaking at
around 3.2% of GDP in 2045) compared to domestically-financed pathways (stabilizing at 2.3-
2.5%) driven by larger foreign inflows. (Figure 7.2 (D))
7.2.3 Impact on Sectoral output and shares
India’s long-term growth trajectory is characterised by a steady structural shift away from
agriculture toward industry and services. Under Current Policy Scenario, agriculture’s share in
gross value added (GVA) reduces gradually over time (~14.4% in 2025 to 9.8% in 2070), while
the share of industry grows from about ~30.7% in 2025 to 33.3% by mid-century and stabilises
thereafter. Services remain the dominant sector, with its share growing from 54.9% in 2025 to
around 55.5% by mid-century and continuing to increase to 56.8% by 2070 (Figure 7.3 (A)).
These changes are mirrored in employment patterns, with labour moving out of agriculture and
being absorbed primarily by industry, particularly clean energy manufacturing, construction,
and infrastructure-related activities.
In contrast, Net-Zero (NZ) pathways modestly accelerate this transformation without
fundamentally altering sectoral balances. The reallocation away from agriculture toward industry
and services is preserved across scenarios, with industry benefiting most from Net Zero driven
investment in electricity, construction, and clean-energy supply chains.
As seen in Figure 7.3 (B), sectoral outcomes vary by financing structure: domestically financed
Net Zero pathways (NZdom) experience temporary lower outputs compared to Current Policy
Scenario, especially during 2045–2050, with value added in industry being lower by up to
5–6% and services being lower by around 4–5% relative to Current Policy Scenario. In contrast,
foreign-financed and productive investment scenarios (NZfor+) show higher growth, particularly
of industry, with value added being higher by 2-2.5% relative to Current Policy Scenario. 136
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
Within industry, sharp decline in fossil fuel based activities are offset by expansion in construction
and clean energy sectors. Overall, the study shows that Net Zero reinforces India’s shift toward
higher-productivity, industry-led growth, with financing design playing a decisive role in shaping
sectoral outcomes.
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2022 20252030 20352040 2045 2050 20552060 20652070
Sectoral composition of value added 
(at constant 2012 prices)
Agriculture Industry Services
(A)
2030 2035 2040 2045 2050 2060 2070
Agriculture
NZdom-0.56 -1.59 -2.76 -3.50 -3.74 -2.62 -2.36
Nzfor+0.99 1.81 2.11 2.30 2.48 3.03 2.12
Industry
NZdom-0.64 -2.52 -4.49 -5.56 -5.64 -2.85 -1.72
Nzfor+2.06 2.71 2.42 2.32 2.52 4.09 3.69
Services
NZdom-0.92 -2.42 -3.87 -4.76 -4.93 -3.27 -2.82
Nzfor+1.12 1.69 1.64 1.62 1.71 2.16 1.09
(B)
Figure 7.3: (A) GVA sectoral composition in Current Policy Scenario (CPS) (constant 2012
prices, MANAGE model) (B) Sectoral value added (% deviation from CPS, MANAGE model)
xvii
xvii Colours represent the direction and magnitude of deviation relative to the Current Policy Scenario (CPS). Greener
shades indicate positive deviations, yellow denotes values close to CPS, and orange to red shades indicate negative
deviations, with darker colours reflecting larger absolute changes. 137
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
7.2.4 Impact on Investment
India’s growth trajectory is capital-intensive across all scenarios, with total investment quintupling
by 2070 (over 2030-35 levels) under Current Policy Scenario (~INR 4,200 lakh cr over 2065-70),
highlighting the scale of finance that must be mobilised (Fig 7.4 (A)). The service sector accounts
for the largest share of this expansion, followed by industry and agriculture, underscoring the
growing importance of services and capital-intensive activities in sustaining long-term growth.
This upward trajectory reflects the combined effects of sustained growth, capital replacement,
infrastructure expansion, and the economy’s gradual shift toward low-carbon sectors.
The deviation of Net-Zero pathways from Current Policy Scenario depends on the source of
financing. Domestically financed scenarios (NZdom) lead to crowding-out and slightly lower
investment across sectors, though industry is least affected, underscoring its central role in
electrification and technology deployment (Fig 7.4 (B)). In contrast, foreign-financed pathways
(NZfor+) generate crowding-in effects, with industry attracting larger capital inflows compared
to Current Policy Scenario and agriculture benefiting from biomass-related activities (Fig 7.4
(C)). Overall, the transition is highly capital intensive and increasingly driven by clean, hard-to-
abate technologies and system-level infrastructure.
0
-1%
-2%
-3%
-4%
-5%
-6%
-7%
-8%
-9%
-10%
NZdom
7%
6%
5%
4%
3%
2%
1%
0
NZfor+
(B)(C)
Agriculture Industry Service
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Sectoral investment
(A)
Agriculture Industry Service
INR lakh crore
% deviation from CPS% deviation from CPS
Note: CPS = Current Policy Scenario; NZS = Net Zero Scenario
Figure 7.4: (A) Sectoral investment in Current Policy Scenario (B, C) Net Zero Scenario investment
(%deviation from CPS) (MANAGE) 138
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
7.2.5 Impact on Electricity Price Trajectory
The Current Policy Scenario and Net Zero Scenario show distinct electricity price trajectories
(Figure 7.5). In the Current Policy Scenario, slower pace of demand electrification and resulting
lower investment needs, leads to electricity prices largely remaining stable till 2040 and declining
thereafter.
By contrast, the Net Zero pathway projects higher electricity prices in the near to medium
term, particularly over 2030–2045, as rapid electrification of transport and industry drives
up electricity demand. Meeting this surge requires substantial upfront capital investment in
renewable generation, storage, transmission upgrades, and emerging demand-side electrification
options such as heat pumps and electric boilers, which can be more capital intensive than
conventional technologies. These higher upfront costs push Net Zero electricity prices above
Current Policy levels during the initial phase of the transition.
After 2045, however, Net Zero electricity prices are projected to reduce from their peaks but
continue to remain above Current Policy levelsdue to higher electrification in Net Zero. This
decline reflects economies of scale, technology learning effects, and continuing cost reductions
in low-carbon technologies. By the 2050s and beyond, electricity becomes more affordable
under Net Zero, supporting long-term competitiveness, consumer welfare, and sustained
economic growth.
Electricity price trajectories under CPS and NZS 
(Index, 2025–2030 = 100)
0
20
40
60
80
100
120
140
2025-20302031-20352036-20402041-20452046-20502051-20602061-2070
CPS NZS
Note: CPS = Current Policy Scenario; NZS = Net Zero Scenario
Figure 7.5: Electricity price trajectories under Current Policy Scenario (CPS) and
Net Zero Scenario (NZS)
7.2.6 Impact on Government Revenue and Import Bill
This section explores the impact on government revenue and imports. In Current Policy Scenario,
revenues from fossil-fuels are expected to decline from 2.3% of GDP in 2022 to 0.8% by 2050
and 0.4% of GDP by 2070. In the Net Zero Scenario, the revenues are projected to decline to
0.5% of GDP by 2050 and 0.2% of GDP by 2070 (Figure 7.6 (A)). This shift away from fossil 139
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
fuels also delivers gains through lower import dependence. This is on account of reductions
in oil and gas imports, followed by coal. In Current Policy Scenario, the total fuel import is
projected to reduce from around 4% of GDP in 2022 to 1.4% by 2050 and 0.8% of GDP by
2070. In Net Zero scenario, it reduces to 0.9% of GDP by 2050 and 0.2% of GDP by 2070.
(Figure 7.6 (B)).
20222025203020352040204520502055206020652070
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
0%
1%
2%
3%
4%
20222025203020352040204520502055206020652070
Current Policy Scenario Net Zero Scenario
Current Policy Scenario Net Zero Scenario
(A)
(B)
Projected total fossil fuel revenue (as % of GDP)
Projected fuel import bill (as % of GDP)
Fossil fuel revenue as % of GDPFuel import bill as % of GDP
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
2030 2035 2040 2045 2050 2055 2060 2065 2070
Savings in Import bill (as a % of GDP)
-12000
-10000
-8000
-6000
-4000
-2000
0
2000
Oil and gas Coal Critical minerals +
Solar & battery cells
Nuclear fuel
2050 2070
Change in Imports vs CPS (Billion INR)
(C)
(D)
Savings in import bill as % of GDP
Commodity-wise change in imports (Billion 2011 INR) 140
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
0.0%
0.1%
0.2%
0.3%
0.4%
0.5%
0.6%
2030 2035 2040 2045 2050 2055 2060 2065 2070Savings in Import bill (as a % of GDP)
-12000
-10000
-8000
-6000
-4000
-2000
0
2000
Oil and gas Coal Critical minerals +
Solar & battery cells
Nuclear fuel
2050 2070
Change in Imports vs CPS (Billion INR)
(C)
(D)
Savings in import bill as % of GDP
Commodity-wise change in imports (Billion 2011 INR)
Note: CPS = Current Policy Scenario; NZS = Net Zero Scenario
Figure 7.6: (A) Projected total fossil fuel revenue (as % of GDP) (B) Projected fuel import bill (as %
of GDP) (C) Savings in import bill in Net Zero Scenario compared to Current Policy Scenario as a
% of GDP (D) Commodity-wise change in imports in Net Zero Scenario compared to Current Policy
Scenario (CPS) in years 2050 and 2070 (Billion 2011 INR)
The imports of critical minerals, solar modules, battery cells, and nuclear fuel are projected to
increase under both scenarios. However, these additions are much lower than the expected
savings in fossil-fuel imports. As a result, the overall energy fuel import bill is projected to see
net savings as early as 2035, at about 0.07% of GDP, rising to about 0.5% of GDP by 2050-
70. This highlights that, despite new dependencies on critical minerals, the Net-Zero transition
materially strengthens India’s external balance over the long term.
7.2.7 Impact on Household Income and Consumption
Under the Net Zero pathways, domestic financing scenarios (NZdom) are projected to reduce
household incomes relative to the Current Policy Scenario. In contrast, foreign financing eases
these pressures: external capital inflows prevent crowding out of investment, sustain labour
demand and incomes, and moderate consumption reductions (Figure 7.7). 141
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
-4.50%
-3.50%
-2.50%
-1.50%
-0.50%
0.50%
1.50%
2.50%
NZFor
-4.50%
-3.50%
-2.50%
-1.50%
-0.50%
0.50%
1.50%
2.50%
NZFor
% Deviation from CPS
-4.50%
-3.50%
-2.50%
-1.50%
-0.50%
0.50%
NZDom
-4.50%
-3.50%
-2.50%
-1.50%
-0.50%
0.50%
NZDom
Urban householdsRural households
Urban Quintile 1 (poorest) Urban Quintile 2
Urban Quintile 3Urban Quintile 4
Urban Quintile 5 (richest)
Rural Quintile 1 (poorest) Rural Quintile 2
Rural Quintile 3Rural Quintile 4
Rural Quintile 5 (richest)
2070
2030
2040
2035
2023
2045
2050
2060
2065
2070
2030
2040
2035
2023
2045
2050
2060
2065
2070
2030
2040
2035
2023
2045
2050
2060
2065
2070
2030
2040
2035
2023
2045
2050
2060
2065
% Deviation from CPS
% Deviation from CPS
% Deviation from CPS
Note: CPS = Current Policy Scenario; NZS = Net Zero Scenario
Figure 7.7: Impact of the Net Zero transition on real household consumption
(% deviation from CPS, MANAGE model)
Redistributive policies can offset these adverse effects. Targeted transfers through revenue
distribution (NZForRD) maintain the consumption of the bottom 40 percent at Current policy
Scenario levels. This shows that redistribution can mitigate short-term distributional impacts of
Net Zero. Similarly, electricity subsidies (NZForSub) funded by phasing out fossil fuel subsidies
reduce household electricity costs, cushioning welfare losses.
7.2.8 Impact on the Labour Market
As India becomes a USD30 trillion economy by 2047, labour force participation is projected to
increase commensurately with the Labour Force Participation Rate (LFPR) improving from 55%
in 2025 to 64% in 2050 and 70% in 2070. (Figure 7.9 (A)). Net Zero impacts on the overall
employment rate are seen to be relatively modest (+/- 1% ). Scenarios such as NZforSub and
NZfor+ result in a higher employment rate compared to Current Policy Scenario. Conversely,
the NZDom and NZforRD scenarios show a marginally lower employment rate compared to
Current Policy Scenario (Figure 7.8 (B)) 142
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
Employment structure: In both the Current Policy and Net Zero scenarios, employment is
projected to shift steadily from agriculture toward industry and services, mirroring the structural
transformation of the economy. In Current Policy Scenario, agricultural share of total jobs is
projected to go from about 46% in 2025 to 34% by 2050 and 26% by 2070. The reducing
share of agriculture in employment is offset by growth in industry especially clean energy
manufacturing sectors with industry share projected to go from 24% in 2025 to 34% by 2050
and 39% by 2070.
In terms of Net Zero scenarios, the impact on this structure is marginal. Compared to Current
Policy Scenario, in domestically financed Net Zero scenarios, employment in the services sector
is lower by 1-2% in 2050 and 0-0.5% in 2070 due to higher electricity prices and crowding-out
of capital. However, in foreign financing scenarios, this is moderated as the impact of crowding-
out is limited. A similar trend is also observed in the industrial sector.
80%
70%
60%
50%
40%
30%
20%
10%
0%
2025 2030 2035 2040 2045 2050 2060 2070
Employment rate in 
Current Policy Scenario(A)
(B)
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
Employment rate
(% Deviation from Current Policy Scenario)  143
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
-7
-6
-5
-4
-3
-2
-1
0
1
2
3
4
NZdom NZforSub NZforRD NZfor NZfor+ NZdom+ NZdomSub
Real wage (% deviation from CPS)
2030 2040 2045 2050
(C)
Figure 7.8: (A) Current Policy Scenario employment rate (MANAGE model) (B) Net Zero
Scenario employment rate (% deviation from CPS (MANAGE model)) (C) Real wages in
Net Zero Scenario (% deviation from CPS) (MANAGE model).
In the Current Policy Scenario, with significant fossil fuel share being there in 2050, direct and
indirect employment in the energy sector largely remain stable at around 6 million in 2022 but
is projected to be 4.2 million by 2070 as fossil fuel share reduces due to commercial maturity
of emerging technologies post-2050. In the Net Zero scenario, driven by greater demand for
clean technologies, the total direct and indirect employment in the energy sector is projected
to increase from 6 million in 2022 to 7 million by 2050 in domestically financed scenarios
compared to 6.7 million in foreign financed scenarios due to higher wage growth.
Wage impact: Real wage deviations from the Current Policy Scenario remain small in the near
term but widen after 2040. In the most optimistic foreign-financed scenario (NZfor+), real
wages are higher compared to Current Policy Scenario by up to 3% by 2050. Wages are lower
by about 5.1% compared to Current Policy Scenario under domestically financed scenarios
(NZdom) by mid-century (see Figure 7.8 (C)).
7.3 CHALLENGES AND SUGGESTIONS
The macroeconomic assessment indicates that the Net-Zero pathway can remain broadly
consistent with India’s long-term growth ambition of becoming Viksit Bharat, a developed
nation by 2047. It also highlights a distinct set of transition issues: large, front-loaded investment
needs, sensitivity of investment and consumption outcomes to the financing mix, and exposure
to evolving carbon-linked trade measures and compliance requirements.
Distributional and labour-market impacts are marginal at an economy-wide level and are more
relevant in terms of composition and transition risks. While aggregate employment remains
broadly stable across scenarios, outcomes vary by financing structure and policy design:
domestically financed pathways are associated with higher capital costs and lower labour
demand, whereas foreign-financed pathways enable stronger employment outcomes. These 144
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
differences imply that the central labour challenge of the transition is not the quantity of jobs
but the reallocation of jobs across sectors, regions, and skill levels, particularly as activity
contracts in fossil-fuel linked value chains and expands in clean manufacturing, construction,
and infrastructure. Absent anticipatory adjustment mechanisms, this reallocation can generate
localized dislocation and wage dispersion even as national employment indicators remain stable.
Against this backdrop, the macro transition raises four interlinked policy issues where targeted
measures can help ease transition issues while preserving growth and development objectives.
1. Geopolitics: Adapt to fragmentation and anchor low-carbon competitiveness
India’s transition is unfolding in a more fragmented and protectionist global economy.
“Slowbalisation,” friend-shoring, and trade diversion are reshaping supply chains just as climate-
related non-tariff measures rise in CO₂-intensive sectors. Analysis of the recent trade-volume
patterns suggests that China’s export volumes continue to grow since 2020, while world exports
excluding China have remained stagnant. This implies that any meaningful derisking from
China would likely require stronger trade measures such as tariffs, local-content requirements,
subsidies, and tighter screening which can raise input costs and reduce efficiency, shifting
resilience into a higher-cost equilibrium.
This challenge is compounded by the fact that the development context that enabled East
Asia’s rapid catch-up and industrial development in the 20
th
century was materially different.
The geopolitical backdrop then was more supportive of export led growth, there was no
energy-transition constraint, demographics were more favourable, and industrial policy was
tightly focused on productivity and performance backed by sustained investment in primary
education and vocational training.
In contrast, India is attempting to develop under constraints that China and the rest of East Asia
did not face: a global model of capital-intensive growth that sits at odds with India’s labour
endowment, an energy-transition “double-whammy” for capital-led manufacturing ambitions,
and rising AI/robotics pressures that threaten services jobs first and physical labour later,
together posing risks to social stability if jobs and productivity do not keep pace.
If fragmentation intensifies, the IMF estimates potential GDP losses of 1.5–3.3%. The EU’s CBAM
and EUDR together could affect ~USD 9.5 billion of Indian exports to the EU (about 12.9% of
India’s exports to bloc), turning sustainability standards into both barriers and competitive
filters.
Tariff flare-ups, supply-security priorities, and constraints in critical minerals and clean-tech
inputs could reduce market access and raise cost and volatility. India must balance “just-in-time”
efficiency with “just-in-case” resilience while moving up the value chain in low-carbon exports.
Suggestions:
i. Strategic trade diplomacy and trade-linked investment: Proactively pursue FTAs with
major partners that combine large import demand and significant outward investment.
The FTAs with EU, United States, Japan, United Kingdom, and the Republic of Korea,
should enable a greater focus extending beyond tariff liberalisation to cooperation on
certification systems, carbon measurement protocols, digital trade rules, and closer
regulatory alignment. 145
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
ii. Strengthen domestic supply-chain resilience: Identify critical dependencies (lithium,
solar PV components, semiconductors, rare earths) and diversify import sources via
long-term offtakes and equity stakes (Africa, Latin America), alongside domestic
manufacturing and exploration. Maintain strategic stockpiles for vulnerable inputs;
collaborate through country groups (e.g., QUAD, ISA) for coordinated responses.
iii. Focus on specialisation and comparative advantage: Use the National Manufacturing
Mission to deepen “networked specialisation” in electronics/semiconductors, apparel
and textiles, automobiles and components, and toys/capital goods/light manufacturing,
embedding low-carbon production as a comparative advantage (e.g., green steel,
green ammonia, sustainable textiles). Support exports with a stable policy and lower
import duties on essential intermediate inputs/equipment for these green value chains.
iv. Diversify exports and build monitoring systems for global standards. Invest in
certification and monitoring infrastructure (including traceability for European Union
Deforestation Regulation covered goods) so exporters can meet emerging global
requirements at scale.
v. Accelerate industrial low-carbon growth to pre-empt barriers. Fast-track greening of
trade related sectors (steel, cement, chemicals, engineering goods). Establish plant-
level Measurement, Reporting, and Verification (MRV) for emissions and product
carbon content to demonstrate compliance with regimes like CBAM; participate in
sectoral alliances (e.g., low-carbon steel, green shipping fuels).
2. Scaling Infrastructure to enable low-carbon transition
A defining macroeconomic feature of India’s Net-Zero pathway is the scale and front-loaded
nature of infrastructure investment, particularly in power generation, transmission and distribution
networks, storage, industrial electrification, transport systems, and urban infrastructure. The
modelling results indicate that electricity prices are projected to be higher in the near to
medium term under Net-Zero pathways due to the capital intensity of rapid electrification and
system expansion, before coming down in later decades as technology costs decline and scale
economies materialise.
This investment profile underscores that infrastructure constraints are not merely sectoral
bottlenecks but macro-critical determinants of growth, competitiveness, and fiscal sustainability.
Delays or underinvestment in grids, storage, logistics, and industrial infrastructure risk amplifying
transition costs by raising energy prices, constraining private investment, and reinforcing the
crowding-out effects observed in domestically financed scenarios.
Suggestions:
i. Advance higher upfront investment in Net Zero enabling infrastructure, supported
by greater mobilisation of long-horizon foreign capital, including sovereign wealth
funds and global pension funds. When externally financed, this front-loading avoids
crowding out domestic investment while delivering productivity gains and lower long-
term energy and import costs.
ii. Targeted public investment in network infrastructure particularly electricity
transmission and distribution and EV charging, can reduce coordination failures and 146
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
project risk, thereby unlocking larger flows of private capital into renewable energy,
e-mobility, and related low-carbon sectors.
iii. Focus investment on macro-critical areas such as power grids and storage, urban
transport, charging networks, multimodal logistics, water systems, energy efficiency,
and waste management to simultaneously support low-carbon transition, service
delivery, and long-term economic competitiveness.
3. Harnessing the Green Jobs and Structural Transformation Opportunity
The macro results suggest that India’s Net-Zero transition reinforces rather than disrupts India’s
long-term structural transformation, with employment shifting steadily from agriculture towards
industry and services, and with clean energy manufacturing, construction, and infrastructure
emerging as important employment drivers. However, these aggregate trends mask significant
adjustment issues at the sectoral, regional, and skill levels.
In particular, the expansion of clean energy, electrification, and low-carbon manufacturing and
the contraction of fossil-fuel linked value chains create a transitional labour market that needs
matching of skills and emerging job profiles, as well as spatial mismatches between regions.
Suggestions:
i. Scale skilling efforts toward green and digital sectors, anchored in strong foundational
capabilities and aligned with market demand. A Green and Digital Skills Stack covering
NSQF-aligned green roles, micro-credentials enabling laddered progression, and
industry-co-designed curricula can support adaptive, technology-ready labour.
With over a quarter of Indian workers in AI-exposed occupations, workforce strategies
can increasingly integrate reskilling for AI-complementary roles while mitigating
displacement risks, particularly as structural transformation accelerates beyond
agriculture.
ii. Formal recognition of green gig roles such as EV drivers, solar technicians, and
e-waste handlers alongside expanded social protection and benefit portability can
strengthen labour inclusion as green sectors scale.
iii. Uniform implementation of labour codes across states can improve hiring flexibility,
encourage formalisation, and enhance India’s attractiveness for labour-intensive and
clean manufacturing, while remaining responsive to evolving technological and market
uncertainties.
4. Regulatory and Institutional Reform for a Capital-Intensive Transition
The macroeconomic outcomes of the Net-Zero transition are shown to be highly sensitive not
only to the volume of investment mobilised but also to its productivity, financing structure,
and institutional environment. Productive investment scenarios deliver superior GDP, wage, and
employment outcomes relative to other pathways, underscoring the importance of institutional
quality and regulatory design in shaping transition outcomes.
Regulatory and institutional issues arise across multiple dimensions: land acquisition and
permission delays affecting infrastructure rollout; multiplicity of governance structures across 147
Macroeconomic Implications of Net Zero Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
sectors and levels of government; evolving regulatory frameworks for emerging technologies
such as hydrogen, CCUS, and small modular reactors; and the fiscal implications of declining
fossil fuel revenues combined with rising transition-related expenditures.
Suggestions:
i. Improve enforcement of energy codes and modernise municipal bylaws by linking
budgetary allocations to verified Energy Conservation Building Code (ECSBC) and
Eco Niwas Samhita (ENS) compliance rates and streamlining digital building approvals,
thereby making energy-efficient construction the default. Greater harmonisation of
state building codes with national frameworks can further optimise land use and
reduce energy demand in urban development.
ii. Build investor confidence through stable, transparent, and predictable regulatory
regimes, lowering the cost of capital for climate-aligned infrastructure and improving
bankability for long-horizon domestic and foreign investors. Forward visibility on
performance standards for key sectors can further strengthen investment planning in
low-carbon technologies.
iii. Rationalise fossil fuel subsidies over the medium term while ensuring targeted support
for vulnerable groups, thereby reducing fiscal distortions without compromising equity
or energy access.
iv. Widen fiscal capacity through selective tax reforms, and simplifying compliance,
enabling greater public investment in low-carbon infrastructure and human capital
without undermining growth. 8
CRITICAL MINERALS
AND SUPPLY CHAINS 150Scenarios Towards Viksit Bharat and Net Zero: An Overview
8
Critical Minerals and
Supply Chains
Low-Carbon Technologies (LCTs), such as solar photovoltaic (PV), Battery Energy Storage
System (BESS), wind turbines, electrolyser, and Zero Emission Vehicles (ZEVs), will need to
scale rapidly for India to achieve Net Zero Emissions by 2070. Several of these technologies
depend on critical minerals such as lithium, nickel, cobalt and rare-earth elements. At present,
the global supply is concentrated in a few countries, exposing India to risks of price volatility
and supply disruption (International Energy Agency, 2024).
To strengthen supply security, India has undertaken wide-ranging policy reforms across the
value chain. Amendments to the Mines and Minerals (Development and Regulation) (MMDR)
Act introduced competitive auctions, established the District Mineral Foundation (DMF) and
National Mineral Exploration Trust (NMET). The regulatory framework was expanded to include
critical and strategic minerals as well as offshore resources. In 2023, the Ministry of Mines
released a list of 30 critical minerals spanning electronics, defence, and renewable energy,
later classifying 24 as ‘Critical and Strategic Minerals’ under the MMDR Act. These steps have
improved transparency and institutional architecture. However, challenges remain in converting
auctioned blocks into operational mines and scaling private participation in exploration.
Complementing domestic reforms, India has pursued international strategies through overseas
acquisitions by Khanij Bidesh India Limited (KABIL), duty exemptions, and partnerships such
as QUAD, the Minerals Security Partnership, and bilateral collaborations with Australia and
the United States. The approval of the National Critical Minerals Mission in 2025 integrates
domestic exploration, overseas sourcing, recycling, and value‑chain development under a
unified framework, reinforcing India’s strategic approach to securing minerals essential for its
clean energy transition.
Chapters 4 and 5 discussed both the scale and time‑horizon of low‑carbon technologies such
as renewables, green hydrogen, and demand electrification. Building on that, the focus of the
Critical Minerals Working Group was to estimate the underlying mineral and material demand
required to deploy these technologies. This study assesses India’s Critical Energy Transition
Minerals (CETMs) requirements under both the Current Policy Scenario (CPS) and the Net‑Zero
Scenario (NZS), and examines how this demand can be met through domestic resources,
recycling, and international sourcing. Demand projections are derived from the anticipated
deployment of solar PV, concentrated solar, wind turbines, electric vehicles, battery energy
storage systems, and hydrogen electrolysers, with cumulative requirements estimated through
2070. The detailed methodology and assumptions underpinning this analysis are available in
the Working Group report on Critical Minerals (Volume 10). 151
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
8.1 CUMULATIVE DOMESTIC DEMAND FOR CRITICAL ENERGY
TRANSITION MINERALS (CETM
S)
Projections indicate a cumulative CETM demand of ~169 million tonnes (Mt) under the Net
Zero Scenario (NZS), about 51% higher than Current Policy Scenario (CPS) (~112). As seen in
Figure 8.1 and Table 8.1, Copper and graphite emerge as the CETMs with the highest cumulative
demand by 2070, at roughly 66 Mt and 46.4 Mt, respectively under NZS. Copper’s dominance
reflects its widespread application across solar PV, wind turbines, EV batteries, EV motors, and
electrolysers. Graphite demand arises almost entirely from battery anodes, with more than 95%
demand from EV batteries and BESS.
Silicon demand is expected to be ~19 Mt, driven mainly by solar PV deployment. Phosphorus
demand reaches ~16.6 Mt, reflecting its critical role in Lithium Iron Phosphate (LFP) batteries
in both EVs and BESS. Nickel demand is also expected to be significant at ~11 Mt due to its
applications in EV batteries, BESS, wind turbines and electrolysers. Other high-volume CETMs
include lithium at ~5.4 Mt, cobalt at ~1.4 Mt, and vanadium at ~0.7 Mt, all linked to battery
technologies.
India’s projected CETM requirements reveal distinct functional clusters with clear concentration
patterns across technologies. Bulk-use base metals such as copper and nickel underpin EV
batteries, motors, solar systems, and storage.
Energy storage critical minerals including graphite, lithium, phosphorous, cobalt, and vanadium
dominate battery chemistries. EV batteries alone are expected to account for ~55% of total
CETM demand by 2070. Battery energy storage systems are expected to add another ~5%,
reflecting concentrated reliance on graphite, nickel, cobalt, vanadium, and copper.
Solar technologies are expected to contribute ~31% of cumulative demand, driven by copper and
silicon alongside smaller volumes of tin, indium, tellurium, and selenium. These niche minerals
are essential for advanced PV technologies and expose vulnerabilities in supply chains due to
their geopolitical sensitivity.
Wind energy is projected to contribute ~6% of the cumulative demand, primarily through rare
earth elements and copper. Rare earths such as neodymium, praseodymium, dysprosium,
terbium, and yttrium, are indispensable for permanent magnets in EV motors and wind turbines.
EV motors themselves account for ~3% of overall demand, concentrated in Rare Earth Elements
(REEs) alongside copper.
Electrolyser‑specific minerals such as iridium, platinum, zirconium, and lanthanum, though low in
volume (~0.7% of demand), are vital for green hydrogen production and geopolitically sensitive
due to supply concentration.
Finally, a long‑tail of minerals including molybdenum, titanium, tin, germanium, and gadolinium,
though smaller in aggregate demand, remain strategically important for specialised applications
and future innovations. These warrant sustained policy attention despite their relatively low
overall volumes. 152
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
783,401
1,454,118
5,468,664
11,543,688
16,689,150
19,538,259
46,489,124
66,069,466
41.03%
70.59%
65.69%
56.12%
62.98%
74.23%
67.50%
66.44%
0% 20% 40% 60% 80% 100%
Vanadium (CPS)
Vanadium (NZS)
Vanadium (Tech)
Cobalt (CPS)
Cobalt (NZS)
Cobalt (Tech)
Lithium (CPS)
Lithium (NZS)
Lithium (Tech)
Nickel (CPS)
Nickel (NZS)
Nickel (Tech)
Phosphorous (CPS)
Phosphorous (NZS)
Phosphorous (Tech)
Silicon (CPS)
Silicon (NZS)
Silicon (Tech)
Graphite (CPS)
Graphite (NZS)
Graphite (Tech)
Copper (CPS)
Copper (NZS)
Copper (Tech)
P
SolarWindBESSElectrolysersNZS 2025-30NZS 2030-50NZS 2050-70
EV Batteries EV MotorsCPS 2025-70 (% of NZS 2025-70)
47,787
50,450
52,468
118,845
124,052
150,003
273,855
482,485
42.59%
33.82%
33.82%
34.42%
40.93%
66.65%
74.75%
58.18%
0% 20% 40% 60% 80% 100%
Zirconium (CPS)
Zirconium (NZS)
Zirconium (Tech)
Cadmium (CPS)
Cadmium (NZS)
Cadmium (Tech)
Tellurium (CPS)
Tellurium (NZS)
Tellurium (Tech)
Tin (CPS)
Tin (NZS)
Tin (Tech)
Titanium (CPS)
Titanium (NZS)
Titanium (Tech)
Dysprosium (CPS)
Dysprosium (NZS)
Dysprosium (Tech)
Molybdenum (CPS)
Molybdenum (NZS)
Molybdenum (Tech)
Neodymium (CPS)
Neodymium (NZS)
Neodymium (Tech)
Figure 8.1a: Cumulative mineral demand in Current Policy Scenario (CPS) & Net Zero Scenario (NZS)
(Interpretation of graph - Bar 1: Share across different technologies under NZS; Bar 2: Share across
different time horizons under NZS; Bar 3: Proportion in CPS relative to the NZS;
Secondary y-axis: – Total demand under the NZS (Tonnes) and percentage in CPS relative to NZS) 153
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
1,853
1,871
4,041
4,268
6,162
20,636
29,743
37,342
89.79%
20.15%
38.78%
38.92%
36.21%
38.50%
35.03%
38.92%
0% 20% 40% 60% 80% 100%
Germanium (CPS)
Germanium (NZS)
Germanium (Tech)
Niobium (CPS)
Niobium (NZS)
Niobium (Tech)
Tungsten (CPS)
Tungsten (NZS)
Tungsten (Tech)
Gallium (CPS)
Gallium (NZS)
Gallium (Tech)
Terbium (CPS)
Terbium (NZS)
Terbium (Tech)
Indium (CPS)
Indium (NZS)
Indium (Tech)
Praseodymium (CPS)
Praseodymium (NZS)
raseodymium (Tech)
Selenium (CPS)
Selenium (NZS)
Selenium (Tech)
G
L
1
2
4
7
36
144
263
44.97%
44.97%
44.97%
95.51%
44.03%
44.97%
44.03%
0% 20% 40% 60% 80%100%
Gadolinium (CPS)
Gadolinium (NZS)
adolinium (Tech)
Cerium (CPS)
Cerium (NZS)
Cerium (Tech)
Strontium (CPS)
Strontium (NZS)
Strontium (Tech)
Yttrium (CPS)
Yttrium (NZS)
Yttrium (Tech)
Platinum (CPS)
Platinum (NZS)
Platinum (Tech)
Lanthanum (CPS)
Lanthanum (NZS)
anthanum (Tech)
Iridium (CPS)
Iridium (NZS)
Iridium (Tech)
SolarWindBESSElectrolysersNZS 2025-30NZS 2030-50NZS 2050-70
EV Batteries EV MotorsCPS 2025-70 (% of NZS 2025-70)
Figure 8.1b: Cumulative mineral demand in Current Policy Scenario (CPS) & Net Zero Scenario (NZS)
(Interpretation of graph - Bar 1: Share across different technologies under NZS; Bar 2: Share across
different time horizons under NZS; Bar 3: Proportion in CPS relative to the NZS;
Secondary y-axis: – Total demand under the NZS (Tonnes) and percentage in CPS relative to NZS) 154
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
Table 8.1: Demand for Critical Energy Transition Minerals at different time horizons
Name
Current Policy Scenario (Tonnes) Net Zero Scenario (Tonnes)
2025-2030 2031-2050 2051-2070 2025-2030 2031-2050 2051-2070
Copper 1,447,931 13,917,16628,532,628 1,882,42420,623,18643,563,856
Graphite 279,372 10,237,65620,862,674 700,016 14,955,11130,833,997
Silicon 858,502 4,794,167 8,851,178 924,808 6,738,516 11,874,935
Phosphorous 80,274 3,409,639 7,668,264 214,298 5,044,803 11,430,049
Nickel 133,218 2,585,554 5,307,677 253,940 3,758,838 7,530,909
Lithium 27,118 1,119,9502,601,999 66,305 1,624,768 3,777,590
Cobalt 11,574 336,336 660,669 23,598 478,156 926,934
Vanadium 1,756 65,802 253,890 8,274 149,672 625,455
Neodymium 4,441 90,600 185,657 11,689 154,897 315,898
Molybdemum 7,230 71,045 126,440 11,298 91,786 170,771
Titanium 150 8,985 41,642 635 20,347 103,070
Dysprosium 954 31,410 67,497 2,363 47,152 100,488
Tin1,330 11,160 28,417 1,706 28,318 88,821
Tellurium 709 5,789 13,476 1,047 14,965 42,618
Cadmium 622 4,850 11,588 788 12,435 37,227
Selenium 260 2,898 11,377 460 7,452 29,430
Zirconium 2,001 6,930 11,420 4,001 19,867 23,919
Praseodymium 330 3,624 6,583 1,092 9,802 18,849
Indium 117 1,648 6,296 208 4,104 16,587
Tungsten 0 315 1,252 0 656 3,385
Gallium 30 331 1,300 53 852 3,363
Niobium 4 56 318 10 265 1,596
Germanium 241 804 618 126 798 928
Lanthanum 1.2 11 52 2 33 108
Platinum 0.7 4 11 1 11 23
Yttrium 0.1 1.2 5.4 0.1 1.6 5.3
Strontium 0.0 0.3 1.5 0.1 1.0 3.2
Cerium 0.0 0.2 0.8 0.0 0.5 1.6
Gadolinium 0.0 0.0 0.2 0.0 0.1 0.4 155
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
Global Context: Placing India’s projected CETM demand in a global context provides a clearer
picture of the country’s role in international mineral value chains. This assessment compares
the projected CETM demand in 2050 with global demand projections published in the Global
Demand Outlook (2025) of the International Energy Agency (IEA). Both datasets focus on
mineral requirements for clean energy technologies such as batteries, solar PV, wind turbines,
and electric vehicles in a net-zero pathway. These results are presented in Figure 8.2. India’s
projected CETM demand in 2050 under Net Zero Scenario constitutes an average 9% of global
demand.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Copper
Graphite
Silicon
Nickel
Lithium
Cobalt
Vanadium
Neodymium
Molybdenum
Titanium
Zirconium
Praseodymium
Terbium
Gallium
Niobium
Lanthanum
PGMs
Yttrium
India (%) Global (%)
Figure 8.2: India’s CETM demand as share of global demand in the Net Zero Scenario
Within this, India’s demand clusters into distinct buckets. A mid‑tier group of minerals, with
shares around 10–15% of global demand, reflects India’s strong build-out in solar PV, batteries,
and permanent magnets. A second group, with 3–10% of global demand, supports EVs, storage,
wind, and electrolysers. Finally, a set of trace demand minerals, each below 3% of global totals,
remain low in aggregate but strategically important for specialised applications.
8.2 SUPPLY ASSESSMENT OF CETM S
The supply‑side assessment adopts a multi‑pronged analytical approach to evaluate India’s
exposure to CETM supply risks. It examines long‑term demand projections (2025–2070) in
relation to domestic resource availability, certified reserves, and import dependence, through
an assessment of India’s readiness across mining, processing, and recycling stages. It further
analyses India’s trade exposure by mapping key mineral imports against geopolitical, governance,
and concentration risks in supplier countries. In addition, the assessment reviews structural
vulnerabilities in global critical mineral supply chains, drawing on international evidence from
the past decade. 156
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
Table 8.2 below compares cumulative embedded mineral demand (2025–2070) with remaining
resources, certified reserves, and import reliance for 23 priority CETMs. India’s projected CETM
demand growth outpaces the availability of domestically certified reserves.
Table 8.2: Comparison of CETM demand with resources, reserves
and import dependence
xviii
Minerals
Demand 2025-
2070* (kt)
Resource
xix
(kt)Reserves
xx
(kt)
Import
Dependence
xxi

(%)
1Copper66,069.47 1,496,979.00 163,891.0057
2 Graphite46,489.12 203,060.18 8,563.41 28
3 Silicon19,538.26- - 100
4 Phosphorous16,689.15 280,377.39 30,876.0985
5 Nickel11,543.69 1,89,000.00 - 100
6 Lithium5,468.66-- 100
7 Cobalt1,454.12 45,000.00 - 100
8 Vanadium783.40 24,633.86 - 46
9 REE668.55 459.73 - 100
10Molybdenum273.86 27,203.40 - 100
11Titanium124.05 411,108.53 15,998.63 0
12Tin118.84 102.78 0.97 100
13Tellurium52.47- - -
14Cadmium50.455.69 - -
15Zirconium47.79 1,674.44 669.47 78
16Selenium37.34- - 100
17Indium20.64- - 100
18Gallium4.27- - 100
19Tungsten4.04144.65 - 100
20Niobium1.87--100
21Germanium1.85- - 100
22PGE0.300.02- 100
23Strontium0.004--100
xviii — indicates that the necessary data for a complete assessment are not available.
xix (Committee on Identification of Critical Minerals, 2023)
xx (Committee on Identification of Critical Minerals, 2023)
xxi (Chadha, R. et al., 2023) 157
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
They fall into four categories:
i. High Demand–High Import Dependence: Minerals such as nickel, lithium, cobalt,
and REEs show high cumulative demand, no reserves and near-complete import
dependence (100%). These materials are essential for battery storage, electrolysers,
and wind technologies.
ii. Gaps in Domestic Reserves Data: In several high-demand minerals (for example, cobalt,
vanadium and lithium), resource estimates exist but reserves remain unestablished,
creating long-term ambiguity around domestic supply potential. A number of moderate-
and low-demand minerals (including tellurium, gallium, germanium and indium) also
lack reserve data, highlighting the need for accelerated exploration and improved
geological reporting.
iii. Gaps in Processing and Refining Infrastructure: Some minerals, such as copper and
graphite, have significant domestic resources and reserves yet show moderate import
dependence. In silicon, overall import dependence is low, but India remains almost fully
dependent on imported polysilicon for manufacturing crystalline silicon wafers used in
solar PV. These mismatches suggest gaps in processing capacity, refining infrastructure
and economic viability rather than geological endowment.
iv. Trace and Niche Minerals: Some minerals (e.g., strontium, gallium, indium, tellurium,
germanium) have very low projected demand but are critical to specialised applications
in solar PV and electronics. With no reported reserves or resources, these minerals will
likely need to be secured through strategic imports or as by-products of other mineral
processes.
Domestic Resources and Structural Constraints: India has considerable geological potential
across CETMs such as Rare Earth Elements (REEs), cobalt, and nickel. However, translation into
economically mineable reserves has been modest due to structural and market factors: evolving
exploration frameworks, limited technical expertise, lack of long‑term risk capital, and weak
incentives for private participation in early‑stage exploration. Addressing these barriers could
strengthen domestic supply capabilities and reduce long‑term import dependence.
Processing and Refining Capacity: India has good processing capabilities for bulk minerals
but limited capacity for CETMs. Copper illustrates both strengths and challenges: large‑scale
smelting and refining facilities exist (Table 8.3), yet participation is concentrated among a few
players, utilisation has fluctuated, and supply disruptions have increased import dependence.
New projects such as the 1 Mtpa Kutch copper project could enhance resilience, but long‑term
competitiveness requires a diversified processing ecosystem.
Table 8.3: Major copper smelting and refining capacities in India
Companies (Indian Bureau
of Mines, 2024a)
Company TypeCapacity (kt)
Hindustan Copper LtdGovernment101.5
Sterlite IndustriesPrivate400.0
Hindalco Industries LtdPrivate500.0 158
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
Rare earth processing shows similar constraints, dominated by public‑sector entities with
limited private participation. Unlocking potential will require incentives for advanced separation
technologies, risk‑sharing mechanisms, and scaling of secondary supply through recycling. Early
initiatives in battery recycling and materials recovery demonstrate capability, but scaling requires
sustained policy support, feedstock access, and integration with manufacturing demand.
Import Dependence and Geopolitical Exposure: India’s high import dependence on geopolitically
sensitive regions poses significant risks. Trade flow analysis (FY2019–2023) combined with
geopolitical risk indicators highlights concentrated vulnerabilities in cobalt, lithium, nickel,
graphite, and copper. Graphite is particularly exposed due to reliance on China, while copper
cathodes and nickel compounds show significant single‑country exposure despite sourcing
from otherwise stable partners. Such concentration increases risks from geopolitical tensions,
policy shifts, infrastructure failure, or external shocks. Figure 8.3 illustrates these vulnerabilities
by mapping India’s import dependency (Y‑axis) against the geopolitical risk scores of supplier
countries (X‑axis), with the top‑right quadrant highlighting the most critical exposures.
Figure 8.3: India’s import dependency of key minerals vs. geopolitical risk
Structural Vulnerabilities in Global Supply Chains: Global CETM supply chains exhibit five
structural vulnerabilities with direct implications for India.
1. Foreign ownership of mineral assets reinforcing global processing dominance (Leruth
et al., 2022).
2. Rising export restrictions on mineral concentrates as producer countries seek
downstream value capture (Przemyslaw Kowalski & Clarisse Legendre, 2023).
3. Long‑term offtake and equity‑linked contracts restricting market access and reducing
spot liquidity. 159
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
4. Price volatility in lithium, nickel, and cobalt, which are essential for a range of clean
energy technologies has risen up the policy agenda in recent years. This is driven
by rapidly increasing demand, volatile price movements, supply chain bottlenecks,
and geopolitical concerns, creating significant financing and investment uncertainty
(International Energy Agency, 2024) The dynamic nature of the market necessitates
greater transparency and reliable information to facilitate informed decision-making,
as underscored by the request from Group of Seven (G7).
5. Environmental and social risks in producing regions, including water stress,
deforestation, labour rights violations, and weak community consent (Sawal, 2022;
Cao et al., 2024;social and economic sustainability risks of cobalt mining, particularly
artisanal and small-scale mining (ASM UN Secretary General’s Panel on Critical Energy
Transition Minerals, 2024).
Addressing these vulnerabilities requires not only diversification of sourcing, but also stronger
environmental safeguards, and governance accountability across supply chains.
Domestic Procurement and Downstream Linkages: India’s production‑linked incentive (PLI)
schemes have successfully attracted downstream investment in solar PV, EVs, and batteries.
However, they have yet to show an impact on upstream mining and processing. Without stronger
procurement linkages or dedicated incentives for mineral processing, downstream growth risks
deepening import dependence.
India’s CETM supply chains face a convergence of risks: rapidly rising demand, limited certified
reserves, underdeveloped processing capacity, high import dependence, and exposure to
concentrated global supply chains. While India has significant geological potential and emerging
recycling capabilities, structural barriers in exploration incentives, data credibility, processing
economics, and international sourcing persist.
8.3 ECOSYSTEM REQUIREMENTS FOR CIRCULAR ECONOMY
SOLUTIONS
India’s reliance on imported CETMs poses significant vulnerabilities. Recovering CETMs from
e-waste and other secondary sources can supplement primary supply and reduce overall
material footprint. This section assesses the role circularity can play in meeting India’s CETM
needs, estimating the volume of e‑waste and other secondary sources available for recovery
across sectors and technologies. The analysis projects e‑waste generation through 2047 and
evaluates recycling technologies against technical, economic, and environmental criteria to
identify viable pathways for scaling circular‑economy practices.
India’s evolving regulatory framework including the E‑waste (Management) Rules 2011, Battery
Waste Management Rules 2022, the National Policy on Electronics 2019, and MSE Scheme for
Promotion and Investment in Circular Economy (MSE‑SPICE). It emphasises Extended Producer
Responsibility (EPR) and aims to build a structured, traceable, and environmentally sustainable
e‑waste processing ecosystem.
Estimating e-waste available for recycling: Using a five‑step methodology (detailed in the
Working Group report on Critical Minerals, Volume 10), the study estimates recoverable CETM
volumes through 2047. Figure 8.4 presents projected cumulative recoveries from modelled 160
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
e‑waste streams. Copper shows the largest recovery potential, reflecting its widespread use
in consumer and industrial electronics. Graphite follows, sourced primarily from end‑of‑life EV
batteries, underscoring the strategic importance of battery recycling. Other high‑value battery
minerals—nickel, lithium, and cobalt—also exhibit substantial recoverable volumes. Silicon
recoveries are moderate, concentrated in end‑of‑life solar PV modules, while neodymium is
recovered in smaller quantities from spent permanent magnets in EV motors and wind turbines.
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
Cu Gr Ni Co Si Li Nd
Metric Tons
CEEW1 CEEW2 CEEW3 CEEW4
CEEW5 ITEW1ITEW2ITEW3
ITEW6ITEW15 Spent Magnets Solar Waste
EV LIB Batteries
Cumulative CRM Recoveries from E-Was te from 2023-47 ( BS)
Figure 8.4: Cumulative CRM recoveries from e-waste between 2025 and 2047
in Current Policy Scenario
xxii
Collectively, these trends indicate a structural shift: recoverable CETMs will increasingly originate
from clean‑energy technology waste rather than traditional electronics. This requires dedicated
collection channels, reverse‑logistics systems, and specialised processing facilities tailored to
batteries, PV modules, and magnet assemblies. Under an aggressive scenario (85% processing
target), recoveries increase by 13.25%.
Recycling technology pathways: The Technology Assessment Framework (detailed in the Working
Group report on Critical Minerals, Volume 10) evaluated pyrometallurgy, hydrometallurgy (acid
leaching), and hydrometallurgy (bioleaching) against technical, economic, and environmental
criteria. Bioleaching ranked highest on environmental and economic grounds due to low
capital costs and minimal impacts, while acid‑leaching scored best technically for efficiency
and maturity. Pyrometallurgy, though mature, ranked lowest across all criteria. These findings
highlight hydrometallurgical approaches, especially bioleaching, as promising solutions for
scaling environmentally sound and cost‑effective recycling in India.
Contribution of circularity to CETM demand: Figure 8.5 illustrates the projected share of CETM
demand (2025–2047) that can be met through recycling. Cobalt shows the greatest potential,
with recoveries rising from ~30% in 2030 to nearly 100% by 2040, driven by high volume of
xxii CEEW- Consumer Electrical and Electronics Waste (1- TV sets, 2- Refrigerator, 3- Washing Machines, 4- Air
Conditioners, 5- Fluorescents and lamps; ITEW - Inormation Technology and Telecommunication Equipment Waste
(1- CPU, 2- Desktop, 3- Laptop, 4- Notebook Computers, 6- Printer 15- Cell phones) 161
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
cobalt-rich batteries reaching their end of life with a simultaneous shift toward lower-cobalt and
cobalt-free alternatives in future, reducing overall cobalt demand in the economy. Nickel follows
a similar but more gradual trajectory, due to its continued requirement in various technologies.
0
20%
40%
60%
80%
100%
2025-2030 2030-2035 2035-2040 2040-2045 2045-2047
Copper (Cu)Nickel (Ni)Lithium (Li)
GraphiteCobalt (Co)Silicon (Si)
Neodymium (Nd)
Figure 8.5: Cumulative CETM recoveries from e-waste between 2025 and 2047
in baseline scenario
Graphite, copper, and lithium also show steady increases, reaching around 15-25% by 2047,
reflecting growing recycling volumes as battery and electronics waste accumulates. In contrast,
recycling contributes to only a fraction of the new demand for silicon and neodymium.
As deployment of low-emission technologies picks up at mid-century, we see the limited ability
of recycling to meet demand post mid-century. These trends show that recycling can partly
succeed in meeting the needs for select minerals. For most Critical Energy Transition Minerals
(CETMs), it may supplement but will not replace primary supply, highlighting the need for
parallel investments in mining, processing, waste import, and material efficiency strategies.
Alternative Sources of Minerals: While consumer electronics remain a key focus for mineral
recovery, there is significant untapped potential in alternate sources, particularly manufacturing
waste from sectors such as automotive, battery production, renewable energy, and mining tailing.
They often contain high concentrations of CETMs, are more centralised and compositionally
consistent than post-consumer waste, making them more accessible and cost-effective for
recovery. Policies must incentivise industries to accurately report, segregate, and direct valuable
manufacturing waste into formal recycling systems.
Despite several systemic limitations, e-waste and battery recycling show considerable potential,
as yet untapped, to contribute to India’s CETM security. Notably, recycling can partially meet
the demand for battery-related minerals. For many other CETMs such as silicon and rare earths
like neodymium, the expected contribution is marginal.
While scaling up formal recycling systems can help close material loops for select minerals, to
realise the full potential of circular economy pathways in India, it must be complemented by i) 162
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
parallel efforts to improve collection efficiency; ii) investment in advanced recovery technologies;
and iii) strengthened regulatory enforcement.
In conclusion, the effectiveness of circular economy as a source must also be viewed through
the lens of India’s manufacturing trajectory. If India manufactures 20–30% of the low-emission
technologies it deploys, the projected levels of material recovery may be adequate to meet
much of the domestic demand for key battery minerals while at the same time exposing it to
global value chains. However, if India’s manufacturing footprint expands significantly, recycling
alone will not suffice. In such a case, the country would need to increase primary mineral
procurement and actively explore the import of high-value end-of-life products and battery
scrap from other regions as an additional feedstock.
8.4  R&D REQUIREMENTS FOR CRITICAL MINERAL PROCESSING AND
RECYCLING
Research and development (R&D) is a cornerstone of India’s Critical Energy Transition Minerals
(CETMs) strategy. This section reviews India’s current capabilities in critical mineral processing
and recycling, examines the existing policy support for CETM-related R&D, and provides an
overview of global research trends that could inform the direction of future domestic efforts.
Technologies for Mineral Processing and Recycling: Comparative analysis of 18 CETMs (detailed
in the Working Group report on Critical Minerals, Volume 10) shows India’s processing capabilities
fall into three categories (Table 8.4):
i. Mature processes: Technologies broadly at par with international best practices,
supported by pilot‑scale demonstrations or established commercial operations.
ii. Pilot/partial processes: Pre‑commercial technologies limited to beneficiation or
intermediate purification, lacking the ability to produce high‑purity end‑products.
iii. No domestic processes: Minerals for which India currently lacks meaningful processing
capability at research, pilot, or commercial scale.
Table 8.4: Domestic process maturity in primary and secondary processing,
and strategic actions required
Maturity
Category
Processing RecyclingStrategic Action Required
Mature
Process
Lithium, cobalt,
nickel, graphite,
vanadium, tungsten,
titanium
Lithium, cobalt,
nickel, graphite,
vanadium, tungsten,
titanium
Prioritise industrial scaling and
commercialisation through targeted
policy incentives, including PLI-type
schemes and scale-up support for
refining and recycling capacity.
Pilot / Partial
Process
Neodymium,
praseodymium,
titanium-metal,
niobium, tantalum,
germanium,
tellurium, yttrium,
selenium
Indium, niobium,
tantalum, gallium
Support scale-up, validation and
industrial integration of promising lab-
scale processes through translational
R&D, public–private consortia, and
targeted international technology
collaborations. 163
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
Maturity
Category
Processing RecyclingStrategic Action Required
No Domestic
Process
Terbium, gallium,
indium, scandium
Germanium,
scandium, tellurium,
selenium
Deploy mission-mode R&D,
technology transfer agreements,
and global partnerships to address
strategic dependencies, with a focus
on by-product recovery and high-
purity separation technologies.
Policy support for R&D in CETM: India’s critical minerals R&D ecosystem is anchored by a
set of targeted public programmes spanning upstream minerals and downstream recycling.
The Ministry of Mines’ Science and Technology (S&T) Programme supports applied research
across geosciences, exploration, mining, mineral processing, metallurgy, recycling, and resource
conservation, with funding extended to academic institutions, national institutes, DSIR-recognised
R&D organisations, startups, and MSMEs.
In 2023, this was strengthened through S&T-PRISM (Promotion of Research and Innovation in
Startups and MSMEs in Mining, Mineral Processing, Metallurgy and Recycling), creating a dual-
track structure covering institutional R&D and startup seed support. In 2024–25, 28 critical
mineral–related projects were sanctioned under these two components. Complementing this,
the Ministry of Electronics and Information Technology (MeitY) has established India’s first
Centre of Excellence for E-waste Management at C-MET, Hyderabad. It develops and transfers
recycling technologies for printed circuit boards, lithium-ion batteries, rare-earth permanent
magnets, fluorescent lamp phosphors, and PV solar cells. These technologies have already been
transferred to around 30 industries. Together, these initiatives aim to bridge the gap between
innovation and commercialisation and strengthen domestic capabilities across critical mineral
and recycling value chains.
Global developments in mineral processing and recycling: Globally, R&D is shifting from
incremental optimisation of established methods to next‑generation technologies that address
efficiency, sustainability, and supply‑chain complexity. Key priorities include:
i. Enhancing resource efficiency, especially from low-grade or unconventional sources,
like mine-tailing
ii. Reducing environmental impact through cleaner, less energy-intensive processes
iii. Unlocking value from secondary sources via advanced recycling and recovery
technologies
Innovation frontiers include:
i. Direct lithium extraction (DLE) from low-concentration brines/clays.
ii. Direct battery recycling to retain material structure; closed-loop processes to cut
reagents/waste.
iii. Electrometallurgical/solvent-free extraction powered by renewables; advanced
electrowinning/refining for high-purity metals from dilute/complex solutions.
iv. Ion-selective membranes for targeted separations with reduced cross-contamination.
These global innovations present India with an opportunity to leapfrog legacy infrastructure,
build decentralised and low‑footprint processing systems, and align its CETM roadmap with 164
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
sustainable materials recovery. By combining domestic R&D initiatives with international
technology partnerships, India can strengthen its resilience, reduce import dependence, and
position itself at the frontier of clean‑energy mineral processing.
8.5 CHALLENGES AND SUGGESTIONS
This section synthesises key findings into a set of interlinked challenges shaping India’s Critical
Energy Transition Minerals (CETMs) supply landscape, and outlines the strategic directions
required to address them. These directions are guided by a coherent set of system-wide
principles: (i) enabling private sector leadership across the CETM value chain; (ii) aligning
policy interventions with differentiated timelines across domestic, international, and circular
supply pathways; (iii) diversifying risk through strategic and mutually beneficial international
partnerships; (iv) treating environmental and social performance as a core supply-security
requirement; (v) prioritising mission-oriented innovation and leapfrog technologies; and (vi)
strengthening institutional capacity, data systems, and Centre–State coordination.
1. Strengthen Domestic Exploration and Mining
Challenge: Domestic CETM viability depends on aligning risk–reward incentives for high-
uncertainty exploration, generating decision-grade geological intelligence, coordinating
permissions across authorities, and clarifying the operational role of public sector capabilities.
Without discovery-oriented, data-driven, and coordination-efficient frameworks, domestic CETM
mining will remain slow, episodic, and unable to deliver strategic supply security at scale.
Suggestions:
i. Rebalance exploration access and licensing pathways – Conditional First-Come, First-
Served (FCFS) access may be introduced for early-stage exploration of priority CETMs
with milestones, data disclosure and rights-based progression.
ii. Make private-sector participation the default for early-stage exploration – Adopt
private-sector award as the default pathway for exploration licences for critical
minerals, using conditional First-Come, First-Served (FCFS) mechanisms (preferred
over auction) appropriate to geological uncertainty and till market matures.
iii. Improve geological knowledge and data credibility – Mandate Committee for
Mineral Reserves International Reporting Standards (CRIRSCO), aligned reporting and
strengthen pre-competitive geological intelligence for regulatory decision-making.
iv. Align public-sector mining capabilities with critical minerals priorities – Review and
realign PSU mandates, assets and investment priorities to ensure consistency with
national critical minerals objectives.
v. Preserve environmental and social accountability in project approvals - Retain public
consultation as a targeted risk-screening mechanism, restrict expedited approvals to
compliant proponents, and mandate independent audits for fast-tracked projects.
vi. Improve permitting efficiency and coordination – Establish coordinated centre–state
permitting mechanisms, including Chief Secretary–led committees and digital tracking
systems. 165
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
2. Build Domestic Innovation and Technology Capability for Critical Raw
Materials
Challenge: Technology readiness gaps indicate that CETM supply constraints are as much
innovation and scale-up-driven as they are resource-driven. Without tighter alignment between
research priorities, pilot-to-commercial pathways, and global technology ecosystems, India’s
ability to translate resource potential into secure and competitive CETM supply will remain
structurally constrained.
Suggestions:
i. Establish a mission-oriented R&D framework for critical raw materials – Shift from
fragmented projects to outcome-oriented missions aligned with national risk and
deployment priorities.
ii. Create pilot-to-commercialisation pathways for priority technologies – Shared pilot
and demonstration infrastructure are needed for priority processing, refining, and
recycling technologies, with transparent access rules for start-ups, MSMEs, and private
firms. VGF and other risk-sharing instruments tied to performance benchmarks should
be provided for first-of-a-kind deployments.
iii. Enable structured international technology co-development and absorption – Pursue
joint R&D and pilots while embedding domestic capability-building and localisation
requirements.
3. Diversify International Supply Sources and Reduce Import Risk
Challenge: International engagement is unavoidable for CETMs, but resilience depends on how
external exposure is managed. Without deliberate strategies to address concentration risk,
enable integrated value-chain participation, strengthen execution capacity, and manage market
volatility, import dependence may continue to translate into systemic vulnerability.
Suggestions:
i. Diversify overseas mineral access through risk-differentiated partnerships – Critical
minerals need to be classified by concentration and geopolitical exposure, and their
risk profile can be translated into differentiated engagement strategies.
ii. Embed India in resilient global value-chain arrangements – Identify minerals suitable
for shared processing and refining hubs through bilateral and plurilateral frameworks.
iii. De-risk overseas access through aggregation and facilitation – Project preparation
support should be established, alongside aggregate demand for equity and offtake,
and coordinate overseas engagement through a single-window facilitation platform.
iv. Strengthen KABIL for overseas CETM execution – KABIL’s execution capacity
requires strengthening through calibrated capitalisation, targeted lateral recruitment in
international mining and project finance, and prioritised overseas CETM project pipeline.
For this, partnerships with overseas-facing PSUs and public financial institutions can
leverage their due diligence, negotiation, and asset operation expertise while retaining
KABIL’s focused CETM mandate. 166
Critical Minerals and Supply Chains Scenarios Towards Viksit Bharat and Net Zero: An Overview
v. Reduce market risk through improved price discovery and hedging – Facilitate access
to relevant global mineral exchanges and develop India-linked instruments where
required, integrating market signals into sourcing and stockpiling decisions.
4. Scale Circularity and Refining
Challenge: India’s CETM supply challenge is fundamentally a midstream challenge. Without
parallel progress on circularity, refining economics, technology access, and environmental
credibility, upstream resource access and downstream manufacturing ambition will not translate
into resilient supply chains.
Suggestions:
i. Make refining and advanced recycling economically viable – Deploy a targeted
package of capital support, output-linked incentives and tax rationalisation for refining
and advanced recycling facilities.
ii. Secure access to critical refining and recycling technologies – Facilitate bilateral
and plurilateral technology access arrangements with embedded domestic capability-
building requirements.
iii. Unlock reliable secondary feedstock for CETMs – Permit controlled imports of high-
value scrap, enable authorised access to mine tailings and legacy waste, and undertake
a national assessment of tailings potential.
5. Institutional Architecture (IA) for National Critical Raw Materials Governance
Challenge: The governance constraints identified indicate that India’s critical raw materials
challenge is no longer primarily one of individual policy instruments or programme design.
There is a need of durable system-level functions that can set strategic scope, assess evolving
risks, calibrate execution tools, and steward a small number of system-critical projects across
value chains and ministries.
Suggestions:
i. Establish a national CRM analytical unit for strategy and system-level risk assessment–
Establish a dedicated Critical Raw Materials (CRM) analytical unit to set strategic scope,
conduct system-level risk assessments, and develop a periodically updated National
Critical Raw Materials Strategy.
ii. Develop a National Critical Raw Materials Strategy on a recurring basis - This will
consolidate demand signals, integrate cross-sector supply-risk and early-warning
assessments, and identify priority raw materials, value chains, and strategic projects.
iii. Enable strategic project designation, stewardship, and delivery coordination – Identify
a limited set of strategic CRM projects and apply enhanced inter-ministerial and centre–
state coordination to resolve bottlenecks, without diluting statutory safeguards 9
SOCIAL
IMPLICATIONS
OF ENERGY
TRANSITION 168Scenarios Towards Viksit Bharat and Net Zero: An Overview
9
Social Implications of
Energy Transition
India’s energy transition is more than a technical or economic shift amid increasing climate risks;
it is a transformative process that touches land, water, livelihoods, health, and social behaviour.
India’s pursuit of the twin goals of a developed economy status by 2047 and Net Zero emissions
by 2070 hinges on ensuring social and economic equity, expanding opportunities for all, and
mobilising investments that drive equity and inclusion. This necessitates a dual approach,
balancing ambitious mitigation targets with enhanced adaptation and resilience measures. This
chapter highlights the social dimensions of India’s energy transition, addressing land, water,
livelihoods, health, and behavioural factors.
9.1 LAND AND WATER REQUIREMENTS
India’s energy transition is intricately linked to land and water needs, resources that are
increasingly getting scarce in a densely populated country. India has only 0.11 hectares of
arable land per person, far below the global average of 0.172 hectares, reflecting land scarcity
(World Bank, 2023). Adding to this is the growing reality of land degradation arising from
the combination of climatic, developmental, social and anthropogenic pressures. Indian Space
Research Organisation’ (ISRO) Desertification and Land Degradation Atlas of India (2018),
reports as of 2018-19, approximately 30% of India’s total geographic area (304.02 million
hectares) were degraded.
Water stress is also present. Assessments indicate that average annual per capita water
availability is projected to drop from 1,486 cubic meters in 2021 to 1,367 cubic meters by
2031, placing India in the “water-stressed” category which is defined as having less than 1,700
cubic meters available per person (Ministry of Jal Shakti, 2024). There are 12 river basins that
face per capita water availability below the scarcity threshold (NITI Aayog, 2019). Further,
groundwater supports domestic water needs and irrigation amid intensifying economic and
urban growth demands. Climate change is further increasing these pressures through erratic
monsoons, increased rainfall variability, and rising temperatures. While water pollution remains
a significant concern, despite marked improvements over the years (Central Pollution Control
Board (CPCB), 2025).
Land and water are important for the country’s development, infrastructure, urbanisation, and
housing in addition to meeting agriculture requirements. The expansion of renewables further
intensifies existing pressures on these resources. These competing demands and trade-offs
need to be managed very carefully to ensure a smooth and inclusive transition. 169
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
Projections and Trends
India’s Net Zero and Current Policy Scenarios entail substantial land and water requirements for
clean energy deployment. Figure 9.1 presents land requirements (in million hectares) for 2030,
2050, and 2070 under both the scenarios.
In terms of future assessments, land demand for the power sector increases steadily under both
scenarios as renewable capacity expands. Under the Current Policy Scenario, land requirements
are projected to rise from 0.68 million hectares (Mha) in 2030 to 2.35 Mha in 2050, reaching
approximately 4.2 Mha by 2070. Under the Net Zero Scenario, land requirements are substantially
higher, increasing from 0.82 Mha in 2030 to 3.26 Mha in 2050, and reaching 5.92 Mha by 2070.
This reflects the extensive deployment of solar, wind, and nuclear energy required under a
rapid low-carbon growth pathway. Future adoption of rooftop solar, floating solar, and agro-
photovoltaic systems could, however, diversify deployment models and partially mitigate land
pressures.
At the national level, the aggregate land requirement for clean energy deployment appears
manageable relative to India’s total geographic area of approximately 300 million hectares.
Recent land-use statistics indicate that net sown area constitutes 46.20% of the total area,
while current and other fallow lands account for 8.35%. Pastures, tree crops, and culturable
wastelands collectively represent 6.15% (Directorate of Economics and Statistics, Department
of Agriculture & Farmers Welfare, 2024). Further, wastelands constitute only ~17% of the
total land area, estimated at 55.76 million hectares in the Wasteland Atlas of India (2019). A
large part of this is India’s open natural ecosystems (Vanak, and Madhusudan, 2022). Large-
scale renewable projects are often set up on these wastelands. In reality, these open ecosystems
often support grazing, biodiversity, and rural livelihoods (Vanak & Madhusudan, 2022).
As observed, land requirements for the power sector under both the scenarios is projected to
increase over the years. This is majorly driven by the increasing share of renewables. Under
the Current Policy Scenario, the land requirements are projected to reach 4.2 Mha by 2070,
which is equivalent to about 7.5% of the assessed wastelands. Further, under the Net Zero
Scenario the land requirements are projected to reach 5.92 Mha by 2070, which is equivalent to
about 11% of the assessed wastelands. In both the scenarios the wasteland estimates for clean
energy deployment constitute a substantial portion of the available wastelands. Given this, the
diversion of such ecosystems for setting up large-scale renewable energy projects necessitates
rigorous safeguards to mitigate socioeconomic and ecological impacts. 170
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
2.35
3.26
4.18
5.92
2050 2070
Land Requirement
Current Policies Scenario (CPS) Net Zero Scenario (NZS)
0
2
4
6
8
10
12
2050 2070
Water Requirement
Current Policies Scenario (CPS) Net Zero Scenario (NZS)
 Million Ha
BCM
10.911.07
9.13
9.90
Figure 9.1: Land requirement (Mha) and water requirement (BCM) across
Current Policy Scenario and Net Zero Scenario till 2070
Concurrently, water requirements of the power sector evolve differently across scenarios as the
generation mix shifts (Figure 9.1).
Under both the scenarios, water consumption increases substantially by mid-century and
declines thereafter, driven by the rising share of renewables, which have low operational water
requirements. It is further noted that the water consumption in the Net Zero Scenario remains
higher than the water consumption under the Current Policy Scenario throughout. This is due
to greater nuclear capacity and the scaling up of green hydrogen production under the Net
Zero Scenario (Figure 9.1).
The increase in water use also has to be evaluated in the context that the rapid expansion of
renewable energy infrastructure is unfolding in regions experiencing hydrological constraints.
Groundwater over-exploitation affects over 25% of administrative units in several states, with
renewable zones increasingly coinciding with “Critical” and “Over-exploited” districts (Central
Ground Water Board, 2025).
Moreover, renewables create indirect resource pressures along their value chains. Grid expansion
(transmission corridors and substations) adds to land footprints (besides the estimates in
Figure 9.1), while battery storage depends on minerals such as lithium, cobalt, and nickel,
whose extraction is water-intensive. Lithium extraction uses 1.9-2.2 million litres of water per
tonne of lithium (Greenmatch, 2024). Nickel mining, often from laterite ores, can impact natural
ecosystem (Genchi et al., 2020).
Spatial Aspects of Transition
India’s land and water resource needs for renewable energy expansion needs to be seen in
the context of demographic growth, ecological considerations, and multiple development
priorities. This needs a closer examination of trajectories, including their geographic distribution,
intersections with prevailing land uses, and other conditions.
India’s renewable energy reforms have accelerated utility-scale solar deployment alongside wind
and solar hybrids through several reform measures such as the Payment Security Mechanism,
Waiver of Inter-State transmission charges, 100% FDI under the automatic route, the Green
Energy Corridors programme, etc. 171
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
India’s renewable energy reforms have resulted in ~100 GW of solar installed capacity, alongside
135 GW under construction. Wind power constitutes more than 50 GW of the installed capacity,
with over 30 GW under various stages of development (PIB, 2025).
While these measures have facilitated rapid scale-up, they have also created conditions favouring
large, contiguous sites in resource-rich zones. Nearly 75% of installed solar and wind capacity
is geographically concentrated in arid and semi arid regions of majorly: Gujarat, Rajasthan,
Maharashtra, Tamil Nadu and Karnataka (MNRE, 2025).
Suggestions:
1. Technological Innovation and Decentralised Renewable Energy (DRE) systems offer
pathways to decouple renewable deployment from competing uses of land and water.
Decentralised Renewable Energy (DRE) systems such as rooftop solar, mini-grids,
solar pumps, and street lighting can be prioritised as their deployment extend access
without large-scale land acquisition, directly supporting rural livelihoods and last-mile
electrification. Such models enable inclusive access, local ownership, and equitable
benefit-sharing.
Implementation of DRE through Renewable Energy Service Companies (RESCOs) can
be leveraged for aggregation via land leases and revenue-sharing. This approach may
be a preferred model as Farmer Producer Organisations may lack technical expertise
for managing distributed renewable energy projects at scale.
Similarly, agrivoltaics, floating solar, and built-environment integration demonstrate
that energy expansion need not displace existing productive land use while preserving
agricultural output and reducing water consumption. To scale these models, there is
a need to address the premium costs associated with these technologies. Accordingly,
pursuing these options requires targeted viability-gap support or concessional debt
to socialise the land-benefit while keeping retail tariffs stable. Additionally, for floating
solar, comprehensive reservoir mapping through the Central Water Commission and
state irrigation departments may be undertaken to identify suitable areas.
2. Spatial Planning for renewable energy development may systematically adopt tools
such as the Integrated Biodiversity Assessment Tool (IBAT) and the Avian Sensitivity
Tool for Energy Planning (AVISTEP) to identify and avoid ecologically sensitive habitats.
The planning process may focus on repurposing degraded, mining-affected, or post-
industrial lands for energy projects, thereby minimising adverse environmental and
social impacts while supporting resource efficiency.
3. Water Governance: Currently, energy production is captured under ‘industry’ in national
and state water policies. Bringing energy explicitly into these policies enables rational
priority-setting and efficiency optimisation. Safeguards while prioritising allocation for
energy may include:
For coastal zones, the integration of desalination technologies offers a pathway
to reduce freshwater requirements.
In regions facing acute groundwater depletion, the focus may shift toward
circularity utilising treated wastewater for energy production. 172
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
Prioritize water-lean technologies by incorporating efficiency as an evaluation
criteria, rewarding waterless cleaning or closed-loop recycling.
9.2 EMPLOYMENT AND MIGRATION: A WORKFORCE IN FLUX
India’s demographic profile represents a defining structural advantage for its development
ambitions and integration into global value chains. With a median age of about 28 years and a
workforce exceeding 600 million (FY 2023–24), India is one of the youngest large economies
globally, in sharp contrast to ageing trends across most developed nations (UNFPA, 2025). This
demographic dividend is expected to persist over the next two decades, providing a sustained
supply of working-age population as labour constraints tighten elsewhere.
India has over 370 million people aged 18 to 29, which is around 27% of the population. They
are projected to contribute to nearly a quarter of global workforce growth over the coming
decade. This enhances India’s attractiveness as an investment destination and supporting its
ability to deliver infrastructure, manufacturing, and low-carbon projects at globally competitive
costs with a workforce adaptable to green and digital sectors.
However, this demographic advantage must be converted into a workforce advantage to realise
India’s aspiration of becoming a developed economy by 2047. While India produces over two
million Science, Technology, Engineering, and Mathematics (STEM) graduates annually and hosts
the world’s third-largest startup ecosystem, only 5–7% of the working-age population currently
receives formal vocational or technical training, much below levels in advanced economies such
as Germany or South Korea.
Compounding this is the high degree of labour market informality. Periodic Labour Force
Survey (PLFS, 2023-24) estimates that over 70% of non-agriculture workers are informally
employed nationally (MoSPI, 2024). Against this backdrop, the employment implications of
India’s low-carbon transition acquire particular significance. Energy systems are not only central
to economic growth but also anchor livelihoods across regions, value chains, and skill levels,
making the design of an inclusive transition a core development challenge rather than a sectoral
concern.
India’s development and low-carbon transition unfolds along with shifts in work, livelihoods,
and migration patterns.. States enter this dual transition with markedly different economic
structures, labour markets, and exposure to climate and transition risks, shaping how shocks
are absorbed and where new employment opportunities emerge.
States can be broadly grouped into agriculture-dominant, industry-led, services-driven, and a
few states with diversified sectors. This diversity makes a one-size-fits-all transition unviable,
underscoring the need for region-specific strategies.
India’s economic structure, as reflected in the state-level typology, is not only uneven across
sectors and regions but is also deeply intertwined with the fossil fuel economy. Coal, oil, and
gas have historically underpinned industrialisation, electricity supply, and energy-intensive
manufacturing, particularly in mining-driven and heavy-industry-oriented states. This legacy has
produced pronounced regional concentrations of fossil fuel dependence, where entire regions
rely on coal mining, thermal power, refineries, steel, cement, and fertiliser industries for both
employment and public revenues. 173
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
Over 150 districts across India are significantly dependent on fossil fuel supply chains, directly
or indirectly sustaining livelihoods for nearly one-third of India’s population (See Figure 9.2)
(Bhushan and Banerjee, 2021). This spatial clustering means that the transition away from fossil
fuel assets is not an abstract national challenge; it will be a lived reality in specific belts, where
jobs, state finances, and induced economies are interwoven with fossil energy.
Coal mining and coal-based power generation together anchor a large share of India’s fossil-
fuel employment. Formal coal mine employment is estimated at about 3,45,000 workers, with
informal employment at least twice as large, implying that over one million people depend
directly on coal mining. Coal-based thermal power plants add another major layer, supporting
roughly 4,20,000 jobs nationwide when formal and informal employment are combined. In both
mining and thermal power plants (TPPs), informal workers namely contractors, transporters,
and service providers, constitute the most vulnerable segment.
Figure 9.2: Districts dependent on fossil-based economy 174
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
Beyond mining and power, fossil-linked manufacturing industries employ a far larger workforce
and face more gradual but equally profound transition risks. Sectors such as cement, steel,
textiles, petroleum products, chemicals and automobiles together employ nearly 17 million
workers, over half of them informal, and are geographically concentrated in the same coal-
and power-intensive states. Unlike mining and thermal power, these sectors face disruption
through technological substitution such as green steel, low-carbon cement and electric mobility,
requiring large-scale reskilling and industrial restructuring to protect livelihoods during the low-
carbon transition.
Projections: The Shape of Workforce Transition
Employment impacts are assessed leveraging inputs from the Macroeconomic Working Group
Report to analyse labour market changes under both the Current Policy Scenario (CPS) and the
Net Zero Scenario (NZS). In the Current Policy Scenario (CPS), the broad employment pattern
in the energy sector largely remains stable in 2022 with employment of 6 million by 2050. Coal,
oil, gas and electricity account for the bulk of employment. By 2070, total jobs are projected to
go to 4 million primarily due to improvements in energy efficiency and technological progress.
As the economy becomes less energy-intensive, fewer workers are required both in direct
energy production and in the upstream and downstream sectors that supply or depend on
energy, leading to a gradual contraction in employment.
However, in the Net Zero Scenario (NZS), industry is projected to record higher employment
than the Current Policy Scenario (CPS), for both skilled and unskilled workers, reflecting rising
demand from clean technology manufacturing and renewable energy infrastructure. With rapid
expansion in clean energy, energy sector jobs are expected to increase to 7 million by 2050
(1 million higher than in the CPS) and 4.5 million in 2070 (0.5 million higher than in the CPS).
These results are consistent with the IEA’s World Energy Employment 2024, which projects
India’s energy jobs to grow by over 20% under its stated policies scenario, driven largely by
clean energy deployment.
Beyond the energy sector, the Net Zero transition can deliver substantial economy-wide job
gains under supportive policies. Job creation is concentrated in construction, road transport, and
trade. Under the optimistic scenario
xxiii
, construction emerges as the single largest contributor,
projected to add about 4.6 million jobs by 2050, compared to the Current Policy Scenario.
This is driven by the labour needs of utility-scale RE build-out, grid expansion, and low-carbon
infrastructure.
Employment in road transport and trade also grows, with road transport projected to add
67,000 additional jobs in 2050 compared to the Current Policy Scenario. Trade contributes a
cumulative 5.2 million additional jobs over the Current Policy Scenario during 2030–2070. This
demonstrates that the Net Zero transition can be a major engine of employment outside the
energy sector when combined with targeted complementary policies.
Taken together, these projections show that the transition can be a net engine of job growth,
not just in the energy sector but across the broader economy. However, geographic mismatches
between regions will require deliberate policies for worker relocation, reskilling, and social
protection to ensure that the benefits of transition are inclusive and equitably distributed.
xxiii Net Zero Scenario wherein financing source is foreign, incremental finance is unproductive and subsidies are
provided for deployment of clean energy protecting the low-income households. For details refer to report on
Macroeconomic Implications (Vol. 2). 175
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
Suggestions:
i. Develop a national policy framework for worker retraining, relocation support, and
economic diversification in districts likely to be affected by industrial decline. The
District Mineral Foundations alongside Skill India Mission and Skill Council for Green
Jobs may be leveraged to fund and support transition of workers into green sectors.
ii. Based on the national policy framework, integrated district-level transition plans may
be formulated for high-risk regions. These plans may combine economic diversification,
infrastructure investment, and workforce support to foster locally anchored growth
and reduce fossil fuel dependence.
iii. e-Shram may be upgraded to capture sectoral affiliation, contract type, geolocation
including migration status, and skill levels, thereby linking informal occupations to
fossil-linked industries.
iv. Social protection entitlements for informal and contract workers in transition contexts
may be accelerated, ensuring wider accessibility of schemes such as Employees’ State
Insurance Corporation (ESIC), health insurance, and pension programmes for those
facing displacement or income loss.
v. Dedicated transition facilitation units may be established at the local level to support
worker registration, benefit access, grievance redressal, and scheme coordination, with
targeted outreach to women and other marginalised worker groups.
vi. Sector-specific transition skill roadmaps may be accelerated to identify at-risk
occupations in fossil fuel-linked and carbon-intensive sectors and map reskilling
pathways into low-carbon roles. At the state-level, skilling initiatives may be aligned
with sectoral low-carbon growth roadmaps, specifying occupations and competencies
for renewables, grid modernisation, electric mobility, energy efficiency, and climate-
resilient sectors.
vii. Implementation of the newly notified labour codes may prioritise high-migrant sectors
through accelerated rollout, focused inspections, and enhanced compliance monitoring.
This strengthens occupational safety, wage protection, and working conditions in
construction, small manufacturing, logistics, domestic work, and gig-based services.
Enforcement mechanisms may further adapt to informality, subcontracting, and
platform-based employment models that disproportionately affect migrant workers.
9.3 HEALTH: VULNERABILITIES, REGIONAL PATTERNS, AND
TRANSITION
India’s public health outcomes are increasingly influenced by the intersecting pressures of
environmental degradation and climate change. Intensifying heatwaves, worsening air pollution,
and more frequent extreme weather events are driving a rise in disease burdens, while indirect
impacts, such as the spread of vector- and water-borne diseases, and mental health challenges,
further strain health systems. The ongoing energy transition adds a complex dimension, bringing
both new risks and opportunities for public health, with impacts varying significantly across
regions and population groups. Effectively navigating these challenges will demand climate-
informed health strategies that strengthen systemic resilience, foster equity, and unlock co-
benefits across sectors. 176
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
Vulnerabilities
India’s public health outcomes face mounting pressures from climate change arising from the
intersection of environmental hazards, social and economic inequality, demographic profile, and
the capacity of local systems to absorb shocks.
Direct Climate Health Impacts: Rising temperatures and recurring heatwaves pose India’s most
acute climate health threat. According to data from the National Centre for Disease Control
(2024), there were 48,156 suspected heatstroke cases in 2024. A total of 430 heatstroke related
deaths (comprising 161 confirmed and 269 suspected) were reported nationwide in the same
year.
Urban Heat Island effects, where cities trap heat during the day and release it at night, thus
increasing nighttime temperatures, further compounding risks in densely populated cities. The
rise in very warm nights is most noticeable in districts with a large population (over 10 lakh),
which are often Tier I and II cities (Prabhu et al, 2025). Over the last decade, nearly 70% of
districts experienced an additional five very warm nights per summer (March to June). By
2050, 50% of India’s population is expected to live in urban areas (UN-DESA, 2018). Heat island
effects therefore pose a serious threat to the population as it can lead to a higher incidence of
heat-related illnesses and cardiovascular morbidity, especially among infants, the elderly, and
those residing in inadequately ventilated settlements (Romanello et al., 2025). The Ahmedabad
Heat Action Plan demonstrates direct correlations between heatwave intensity, duration, and
mortality spikes, urging city-level interventions.
In addition, extreme weather events, including floods and cyclonic storms, are increasing and
are known to inflict health impacts. This often precipitates mass displacement, injury, loss of
essential healthcare access, and outbreaks of water and vector-borne diseases, and economic
losses (Roxy et al., 2017). The Emergency Events Database (EM-DAT) pertaining to natural
disasters and their related damage costs for the period 1990-2022 shows that India was among
the worst affected countries in the world. The data further suggests that floods and storms
featured as the top two natural disasters in India between the same period and accounted for
the highest share of damage costs at 63.10% and 31.52% respectively (Goldar et al., 2024).
India’s air pollution challenge is inseparable from its climate change trajectory. In 2019, air
pollution was associated with approximately 1.67 million deaths, with ambient particulate matter
acknowledged as a primary driver of both acute and chronic respiratory illness, leading to 0.98
million deaths (Pandey et al., 2019). Climate change is projected to increase this burden through
longer pollen seasons, increased ozone and allergen production, and synergistic effects of heat
stress and air toxicity.
Indirect Climate Health Impacts: Climate change is expanding the spatial and temporal
distribution of vector-borne diseases such as malaria, dengue, and chikungunya (MoEFCC,
2023). Incidents of malaria have been reported in the Himalayas, while dengue now spreads
year-round, with a 13% and 53% rise in transmission potential for Aedes aegypti and Aedes
albopictus mosquitoes, respectively. Coastal Vibrio pathogen risk has surged by 66%, threatening
23 million people (Lancet Countdown, 2024). The spread and persistence of these infections
are compounded by the constraints in vector control and changing human migration patterns.
Climate change further threatens progress in food safety and nutrition across India (Basu et
al., 2022). Further, it imposes a significant mental health burden through direct psychological 177
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
trauma from cyclones, floods, and heatwaves. This is alongside chronic psychopathology such
as anxiety, depression, and trauma-related disorders stemming from environmental degradation,
economic insecurity, and displacement (Ministry of Health & Family Welfare, 2024).
The growing frequency and severity of climate events threaten the operational resilience of
India’s health infrastructure. Healthcare systems in more than 40% of Indian districts are at high
climate-induced risk (CEEW and UNICEF, 2025). Over 2,00,000 public healthcare facilities are
vulnerable to extreme climate events such as floods and cyclones. It increases vulnerabilities in
districts, hindering equitable service delivery.
Climate events drive internal migration, displacing over five million people in 2024 from
floods, droughts, and storms (IDMC, 2025). Migrants from coastal, riverine, and drought-hit
areas often lose public health entitlements upon relocating to peri-urban or urban zones,
disrupting children’s vaccination schedules and schooling. Women and girls experience
additional vulnerability, unequal resource access, and pressure from climate-related migration
(M S Swaminathan Research Foundation, 2024).
Current Policy Landscape
India actively addresses climate-health risks through an evolving framework anchored in the
National Action Plan on Climate Change (NAPCC) and State Action Plans on Climate Change
(SAPCC), integrating adaptation across health, water, agriculture, and energy. The National
Programme on Climate Change and Human Health (NPCCHH) mandates district assessments,
climate surveillance integration, gender strategies, and nationwide State Action Plans on Climate
Change and Human Health (SAPCCHH).
Over 20 states and 100 cities implement Heat Action Plans with meteorological alerts,
complemented by NDMA’s Sachet protocol and drills under the Disaster Management Act,
2005. The National Clean Air Programme (NCAP) is a time-bound, national strategy targeting
a 40% reduction in particulate matter concentrations by 2026 in 131 identified non-attainment
cities. While the India Cooling Action Plan (ICAP) aims to provide sustainable cooling and
thermal comfort for all by FY 2037-38. The targets include reducing cooling demand, refrigerant
demand, and cooling energy requirements, alongside training of service technicians. In addition,
the National Mission on Sustainable Agriculture provides the policy anchor for climate-smart
agriculture, resource conservation, and organic and natural farming. Further, India’s disaster
preparedness framework is regulated through NDMA guidelines and statutory provisions in the
Disaster Management Act.
Suggestions:
i. Standardised Vulnerability Assessment and Surveillance: A single, robust vulnerability
assessment framework may be established to provide a consistent national foundation
for risk prioritisation. Under NPCCHH leadership, it can incorporate internationally
recognised risk models like the IPCC AR5, customised to Indian district realities,
ensuring standardisation across states.
This standardised framework can be integrated into district-level surveillance systems
across National Health Mission (NHM), Integrated Disease Surveillance Programme
(IDSP), and NPCCHH modules. This can ensure digital tracking of climate-sensitive
diseases with mandatory gender, age, and migration disaggregated reporting. 178
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
ii. Strengthen Climate-Resilient Health Infrastructure: Indian Public Health Standards
(IPHS) may be revised to include climate-proofing specifications for all new and
existing facilities in high-risk districts. These specifications can address backup power,
water security, cooling systems, and elevated designs in flood-prone areas, building on
NPCCHH’s foundational guidelines.
Further, a real-time climate resilience monitoring system may be integrated with IDSP
and NHM to track infrastructure readiness and service continuity metrics. This will
enable NPCCHH to effectively safeguard healthcare functionality during extreme
weather events.
iii. Strengthening the Health Workforce: Climate–health and emergency preparedness
modules may be mainstreamed across accredited medical and public health curricula.
These can be complemented by periodic refresher training and mandatory preparedness
drills for the health workforce and facility managers.
These drills may be institutionalised as a routine operational requirement and linked
to annual IPHS accreditation, shifting NPCCHH capacity-building from awareness to
action-oriented preparedness.
iv. Financing Aligned to Climate Risk: Earmarked NHM funding may be used as a
catalytic lever to blend multilateral and philanthropic finance. This may crowd in larger-
scale investment for climate-resilient health infrastructure. Further, targeted climate-
health insurance pilots may be launched for low-income, disaster-prone populations,
leveraging NHM administrative networks.
9.4 BEHAVIOUR: PATTERNS, BARRIERS, AND OPPORTUNITIES FOR
CHANGE
India’s energy transition will be shaped not only by how energy is produced, but increasingly
by how it is demanded and used. While clean technologies and efficiency improvements are
essential, their impact depends critically on how household and firm behave in adopting new
technologies, adjusting consumption, and responding to price signals. Behavioural barriers such
as upfront cost sensitivity, limited trust in new technologies, social norms, and rebound effects
can dilute the benefits of supply-side investments. Integrating behavioural insights into policy
design is therefore essential to guide choices, shape demand, and sustain low-carbon practices
at scale.
India’s approach to sustainable development is deeply rooted in a civilisational ethos of mindful
production and consumption, where prosperity has traditionally been pursued in harmony
with nature rather than through excess. This perspective, now formally articulated through
PM Mission LiFE (Lifestyle for Environment) articulated by the Hon’ble Prime Minister, elevates
sustainable living from a policy instrument to a foundational development principle. Global
evidence reinforces the validity of this pathway – Costa Rica has achieved has comparable
longevity with the US (80.8 years versus 78.3 years in 2023) with barely one-fifth of the per
capita income through preventive healthcare, community cohesion and active lifestyles. These
examples demonstrate that high human development need not follow high-consumption
trajectories, opening space for India to advance an alternative model of growth anchored in its
civilisational wisdom and climate-conscious practices. 179
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
This ethos continues to manifest in contemporary Indian lifestyles that inherently align with
low-carbon development. Traditional homes built with local materials, natural ventilation and
passive cooling consume far less energy than the globally prevalent glass-and-steel structures
dependent on artificial climate control. Multi-generational households, long a feature of Indian
society, reduce per capita energy and material demand, particularly in dense urban environments.
Dietary practices also reinforce this advantage – according to the Pew Research Center (2021),
nearly 39% of Indian adults identify as vegetarian, with many others limiting meat consumption
for cultural, religious or health reasons, resulting in diets that are both climate-friendly and
health-supportive.
Mission LiFE builds on these lived practices, giving them contemporary policy expression and
scale, and positioning India to demonstrate that development, equity and sustainability can
be mutually reinforcing rather than competing objectives. It also builds on the demonstrated
success of earlier large-scale behavioural programmes such as Swachh Bharat, UJALA, Jal
Jeevan Mission and Give It Up, which transformed social norms through nudges, defaults, and
social proof rather than mandates alone.
Challenges and Suggestions
Entrenched Travel Habits and Status-Driven Vehicle Ownership: The transport sector faces
deeply embedded behavioural barriers to modal shift. Personal vehicles remain symbols of
status and autonomy, while public transport is associated with inconvenience and lower social
standing. Commuters exhibit strong habitual preferences for private vehicles, reinforced by social
norms that equate car ownership with economic success. Electric vehicle adoption encounters
behavioural obstacles including range anxiety, technology scepticism, and reluctance to change
established routines despite improving performance metrics and government incentives.
Suggestions:
i. Leverage visible community leadership and peer endorsements through campaigns
showcasing respected community members, technology executives, and public
officials using public transport regularly. The Personal2Public campaign in Bengaluru
demonstrated how Ministers and corporate leaders taking metro services twice weekly
catalysed broader modal shift, creating social proof that sustainable transport choices
are compatible with professional success.
ii. Address misconceptions through targeted testimonial campaigns featuring peer
experiences to counter scepticism about public transport reliability and EV performance,
focusing messaging on specific concerns like comfort, safety, and time efficiency rather
than generic environmental appeals.
iii. Integrate behavioural nudges in digital platforms by designing ticketing applications
with default options favouring sustainable modes; mobility apps could display public
transport options first, require additional clicks to access private vehicle alternatives,
and show comparative journey times with externalities factored in. The broader
recommendations are further discussed in the report on the Transport sector.
Behavioural Inertia and Information Gaps in Building Sector: Building occupants and owners
display pronounced inertia in adopting energy-efficient practices due to established habits,
unclear information, high upfront cost, and perceived inconvenience. The split incentive problem 180
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
compounds behavioural barriers, particularly in rental settings where efficiency investment
costs fall on landlords while energy savings accrue to tenants. Efficiency improvements can
generate rebound effects consistent with the Jevons Paradox, wherein households increase
usage intensity. Moral licensing further weakens outcomes, justifying less sustainable practices
after one pro-environmental action.
Suggestions:
i. Enable transparent energy performance disclosure through improved BEE Star
Ratings or other suitable indicators to empower market participants with energy cost
information, creating salient market signals.
ii. Deploy personalised efficiency nudges using smart building systems for contextualised
reminders, such as 24-degree thermostat defaults, switching off unused equipment,
and optimising natural lighting; promote Time-of-Day tariffs for efficient use.
iii. Pair efficiency programmes with consumption-awareness messaging that highlights
usage norms and cumulative impacts to address rebound and moral licensing effects.
The broader recommendations are further discussed in the reports on the Building and Power
sectors.
Weak Behavioural Signals for Sustainable Procurement in Industry: Hard-to-abate sectors,
including steel and cement lack strong behavioural cues for low-carbon choices. Procurement
decisions prioritise cost over carbon intensity, with social and environmental factors playing
minimal roles. Absence of standardised carbon footprint labelling makes informed low-carbon
choices difficult.
Suggestions:
i. Deploy standardised Product Carbon Footprint labelling with clear, comparable
carbon labels for emission-intensive materials like cement, steel, aluminium, textiles,
and chemicals, focusing initially on business-to-business contexts such as procurement
portals and construction tenders.
ii. Expand recognition platforms by creating sector-specific carbon intensity benchmarks,
enhanced with gamification and public recognition.
Risk Aversion and Limited Social Proof in Agriculture: Farmers exhibit behavioural reluctance
towards climate-smart practices due to risk aversion, limited exposure to successful
implementation, and entrenched traditional methods. Social proof and trusted networks
significantly influence decisions, yet visible demonstrations remain scarce.
Suggestions:
i. Design bundled discounts on climate-smart packages like drip and sprinkler irrigation
or drones through cooperatives or schemes to reduce decision fatigue and improve
affordability.
ii. Encourage and recognise public commitments via platforms like farmer producer
organisations, gram sabhas, or digital pledges, especially for women-led groups; the
JEEViKA programme in Bihar exemplifies women self-help groups championing clean 181
Social Implications of Energy Transition Scenarios Towards Viksit Bharat and Net Zero: An Overview
energy adoption. Enable farmer-led demonstration plots like Agri-PV to establish
visible success stories using peer educators and local leaders.
Limited Consumer Engagement and Awareness of Impact in Electricity Sector: Consumer
engagement with demand response should be increased. Households and businesses
underestimate their influence on consumption patterns, leading to behavioural inertia. Energy
system complexity obscures links between individual actions and environmental impacts.
Suggestions:
i. Deploy comparative energy reports with neighbourhood baselines through monthly
household reports; Vidyut Rakshaka in Bengaluru achieved 7 % consumption reduction
across 2,000 households.
ii. Create smart meter feedback loops via mobile apps with real-time insights, tips,
and alerts. Implement default green appliance scheduling during high renewable
periods. Highlight collective achievements in concrete terms like CO₂ avoided to foster
community impact.
Weak Implementation Architecture and Limited Scalability: Progress toward mobilising one
billion citizens by 2028 under Mission LiFE needs clear metrics. Behavioural interventions under
Mission LiFE need to be supported by baseline data, control groups, or longitudinal tracking,
with the ability to distinguish symbolic participation from sustained behavioural change.
Suggestions:
i. Mainstream Mission LiFE across government programmes by integrating principles into
schemes for housing, energy, transport, water, agriculture, and livelihoods, recognising
women’s roles.
ii. Institutionalise outcome-oriented M&E with behavioural indicators tracking adoption
and impacts via research partnerships. Mandate baseline data, controls, longitudinal
tracking, and a national repository with flexible protocols.
iii. Leverage social norms through community leaders and peer networks, as in Swachh
Bharat Abhiyan. Strengthen inter-ministerial and centre-state coordination via review
mechanisms.
The demand, supply, and cross-cutting behavioural interventions articulated above exemplify how
behavioural insights serve as vital complements to technological and infrastructure measures in
India’s pathway towards sustainable energy.
10
ENABLING THE NET
ZERO TRANSITION:
CHALLENGES AND
OPPORTUNITIES 184Scenarios Towards Viksit Bharat and Net Zero: An Overview
10
Enabling the Net Zero
Transition: Challenges
and Opportunities
This final chapter brings together the insights of all sectoral and cross-cutting working groups
to identify what India may do to deliver a credible, affordable, and Viksit Bharat-aligned Net
Zero pathway. It distils the detailed sectoral analysis into system shifts, institutional reforms,
and investment architecture to ensure that India’s transition is smooth, fair, and future-ready.
India’s Net Zero pathway is framed as a development strategy, one that prioritises prosperity,
resilience, and well-being while reducing resource intensity. Drawing on India’s civilizational
ethos and Mission Lifestyle for Environment (LiFE), the transition reimagines what it means to
deliver growth, not through ever-rising energy, materials, and emissions, but through efficiency,
smart design, and expanded opportunities for people. The challenge now is not conceptual but
executional; building the enabling systems that allow each sector to move at scale and speed.
India can prioritize building this modern infrastructure under explicit carbon constraints, limited
land and water availability, rising climate risks, rapid technological change, and shifting global
trade rules. Compressing a century-long low-carbon transition done by others into a few decades
creates economy-wide challenges that interact with sector-specific challenges.
Key system constraints include high cost of capital and thin project pipelines, state capacity
gaps, and land, water, and network bottlenecks across grid, waste, and digital systems. Global
headwinds including supply-chain concentration, geopolitical fragmentation, and emerging
compliance regimes such as Carbon Border Adjustment Mechanism (CBAM) and European
Union Regulation on Deforestation-free products (EUDR) add further pressure. At the same
time, manufacturing depth, recycling systems, technology scale-up, and credible Measurement,
Reporting, and Verification (MRV) frameworks can be strengthened to keep pace with demand.
Affordability, equity, skills, and just transition concerns highlight the need for policies that protect
vulnerable households, workers, and regions while enabling rapid sectoral change.
The Net Zero roadmap highlights key system shifts required to make that possible.
1. Demand-side action is as important as clean supply: The Mission LiFE approach coupled
with an Avoid–Shift–Improve approach across transport, buildings, and industry is central
to India’s development and energy transition strategy:
i. Reduce travel and wasteful consumption through compact cities, digitisation, and
behavioural change.
ii. Shift to public and mass transit systems, and non-motorised mobility.
iii. Increase adoption of efficient appliances, optimizing industrial processes and making
buildings (existing/new) Net Zero compliant. 185
Enabling the Net Zero Transition: Challenges and Opportunities Scenarios Towards Viksit Bharat and Net Zero: An Overview
Most demand side interventions have a low or even negative marginal costs of abatement.
Their adoption eases infrastructure pressures, and accelerates emissions cuts.
2. Demand electrification needs to be scaled by three times to enable transition to Net Zero.
End-use electrification across sectors such as mobility, cooking and heating, and industrial
processes not only cuts carbon emissions but also boosts efficiency, and air quality.
3. Power sector transformation is crucial. We must build a renewables-dominated, reliable
grid with significant baseload from nuclear power and adequate deployment of storage
technologies by 2070. Strengthening grid infrastructure, and Distribution Company
(DISCOM) reforms are important to ensure a smooth transition without compromising on
reliability and affordability.
4. Mission-mode implementation accelerates change. Past national missions (Swachh Bharat,
Pradhan Mantri Jan Dhan Yojana, Pradhan Mantri Kisan Samman Nidhi, Ayushman Bharat
– Pradhan Mantri Jan Arogya Yojana) show that India performs best when institutions,
targets, and funding are aligned. Similar, mission-mode programmes for sustainable mobility,
industrial innovation, circular economy, clean cities, and electrification can deliver results at
speed.
5. Finance is the engine of the transition. India must mobilise green investments of USD 150
– 200 billion per annum over the next ten years and scale up to USD 400–500 billion per
year by mid-century. Achieving this requires lowering the cost of capital, blended finance
and guarantees for early-stage technologies. In addition, deepening domestic capital
markets, a strong climate taxonomy, and purpose-built institutions for green finance.
6. Domestic manufacturing and supply chain resilience are strategic necessities: Scaling up
solar, batteries, EVs, green hydrogen, electrolysers, and storage at Indian volumes demands
local manufacturing depth and supply-chain security. India must secure critical minerals
through domestic exploration, recycling, and diversified global partnerships, while scaling
manufacturing through incentives and ease of doing business. A green economy must also
be a “Make in India” economy resilient to global risks.
7. Innovation and digitisation are force multipliers for the transition. Scaling-up India’s Net
Zero pathway and maintaining global competitiveness will require stronger R&D, faster
piloting, and rapid scaling of frontier technologies such as green hydrogen, H₂-Direct
Reduced Iron (DRI), Limestone Calcined Clay Cement (LC3), inert anodes, Carbon Capture
Utilisation and Storage (CCUS), low-carbon materials, and advanced storage. At the same
time, digital tools such as smart meters, intelligent transport systems, Internet of Things
(IoT)-enabled grids, and interoperable platforms like the Unified Energy Interface (UEI)
can boost efficiency, transparency, and system management. Together, technology and
digitalisation accelerate adoption, reduce costs, and enhance the credibility of India’s
industrial transition.
8. An inclusive, and affordable transition ensures public support. Workers in fossil fuel linked
sectors, low-income households, and resource-dependent regions must be protected, while
land and water use must be managed to avoid conflict and safeguard livelihoods. A just and
inclusive transition will require reskilling and redeploying affected workers while expanding
opportunities in emerging green sectors, diversifying fossil fuel belt and other resource-
dependent economies, protecting low-income households through periods of price and 186
Enabling the Net Zero Transition: Challenges and Opportunities Scenarios Towards Viksit Bharat and Net Zero: An Overview
income adjustment. It will require managing land and water pressures via spatial planning,
basin-aware water strategies and prioritisation of degraded land, alongside promoting dual-
use models such as agrivoltaics so that clean infrastructure can expand without displacing
communities.
9. Strengthen institutions and governance for whole-of-economy delivery. India’s Net Zero
transition depends on coordinated action by line ministries and by State governments.
This requires reinforcing existing coordination mechanisms such as the Prime Minister’s
Council on Climate Change through a permanent secretariat in the form of a Low-Carbon
Development Cell/ Secretariat. Such an institution can align Central and State budgets with
National Determined Contributions (NDC) cycles and ensure that sectoral and regional
development plans remain consistent with India’s climate commitments.
The Key Message
India can achieve the Viksit Bharat goal and Net Zero, but only if these system shifts are built
effectively and early. This chapter consolidates insights from numerous sectoral and thematic
working group reports into a single, decision-oriented narrative, discussing:
i. The cross-cutting enablers that unlock them (finance, resources-minerals, land and
water, data, innovation, governance), and
ii. The delivery architecture needed to execute at scale.
Together, they define the enabling environment for a developed, modern, competitive, and
inclusive Net Zero Bharat which is also Viksit Bharat. `
10.1  REFRAMING DEVELOPMENT FOR SUSTAINABLE GROWTH:
LEVERAGING INDIA’S CIVILISATIONAL ETHOS AND
MISSION LIFE
India’s development trajectory is unfolding at a moment when economic growth
consumption paradigm is in question:
The historical association between economic growth and rising resource consumption is
increasingly being questioned. The dominant global model of development, shaped by the
experience of industrialised economies, has been characterised by material-intensive growth,
expanding energy demand, and a steady enlargement of ecological footprints. While this
pathway delivered rapid economic expansion, it has also generated structural vulnerabilities in
the form of climate instability, resource depletion, and heightened exposure to external shocks.
For a country of India’s scale and diversity, replicating such a trajectory in its conventional
form would impose constraints not only on environmental sustainability but also on long-term
economic resilience and social equity.
India’s development challenge is therefore not limited to accelerating growth, but extends to
redefining the quality, composition, and resource intensity of that growth. The central question
is how development can be structured to deliver rising living standards while remaining
consistent with ecological goals and national priorities for energy security, fiscal stability, and
social inclusion. In this context, climate action emerges not as a peripheral obligation, but as 187
Enabling the Net Zero Transition: Challenges and Opportunities Scenarios Towards Viksit Bharat and Net Zero: An Overview
an organising principle for a more efficient, resilient, and self-reliant growth model, anchored
in lower exposure to commodity volatility and external shocks.
International experience already illustrates that high levels of human well-being are not
mechanically correlated with high levels of material consumption. Japan, with a GDP per capita
lower than that of the United States, records higher life expectancy, while Costa Rica achieves
comparable health outcomes at a fraction of the income level, reflecting the importance of
social systems, preventive healthcare, and active lifestyles over material intensity alone. These
patterns underscore the scope for development pathways that prioritise efficiency, accessibility,
and resilience over sheer volume of consumption. For India, this opens strategic space to pursue
prosperity without replicating the most resource-intensive phases of industrialised growth.
An Indian Development Model
Together, these insights allow India to articulate an alternative development approach grounded
in efficiency, sufficiency, and resilience. Several features of Indian living patterns already align
with such a pathway. Traditional housing based on local materials, natural ventilation, and passive
cooling entails far lower energy demand than globally prevalent glass-and-steel designs reliant
on mechanical climate control. Multi-generational households, long characteristic of Indian
society, reduce per capita energy and material use, particularly in dense urban environments.
These embedded practices illustrate that lower-resource development pathways are socially
viable and culturally anchored.
Suggestions:
i. At the level of policy design, a coherent demand-side framework building on MIssion
LiFE can be organised around an economy-wide Avoid–Shift–Improve approach spanning
transport, buildings, and industry. This encompasses the diffusion of super-efficient
appliances and equipment, large-scale industrial retrofits, particularly among micro,
small and medium enterprises, and the integration of circular material flows through
recycled-content standards and extended producer responsibility. The systematic
incorporation of behavioural dimensions, exemplified by Mission LiFE, extends the
scope of demand-side action beyond technology into everyday consumption choices.
ii. Energy efficiency occupies a central position within this transition. Cooling demand
alone is projected to rise sharply with improving living standards, potentially tripling in
the coming decades. However, widespread deployment of high-efficiency appliances
and building designs rooted in passive cooling could moderate this growth substantially.
Across sectors, such measures are associated with a steady decline in India’s energy
intensity of GDP, supporting the decoupling of economic growth from energy
consumption while preserving quality of life. This implies a gradual reorientation of
developmental norms away from energy-intensive practices toward climate-responsive
design and the use of local resources.
iii. Behavioural change forms a complementary design dimension of this transformation.
Initiatives such as Mission LiFE provide a platform to normalise low-impact consumption
patterns at scale, including moderation in cooling practices, shifts away from single-
use plastics, rainwater harvesting, greater reliance on public transport, wider adoption
of clean cooking fuels, and transitions toward sustainable agricultural practices. 188
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Individually modest, such shifts acquire macroeconomic significance when embedded
across households and communities.
iv. Circularity further reinforces the demand-side transition by lowering the material
intensity of growth. Reduced reliance on virgin steel and cement, enhanced recycling of
critical minerals, and longer product lifecycles contribute simultaneously to emissions
reduction, import substitution, and resource security. In this sense, the circular economy
operates not only as an environmental strategy but also as an instrument of industrial
competitiveness and macroeconomic stability, particularly in a context of rising global
material and supply-chain uncertainty.
Taken together, demand-side measures reduce future infrastructure requirements, ease
pressure on land and mineral resources, and improve the affordability of the energy
transition. By aligning development with efficiency, sufficiency, and cultural continuity,
India’s climate strategy gains robustness against external shocks and fiscal constraints,
while preserving space for rising living standards. This integrated approach positions
demand management not as a residual element of climate policy, but as a structural
determinant of the pace, cost, and resilience of India’s transition to Net Zero.
10.2   FINANCING INDIA’S NET ZERO TRANSITION: MOBILISING
CAPITAL THROUGH SYSTEMIC FINANCIAL REFORM
India’s development and low-carbon transition will require large volumes of long-tenor finance.
Cumulative needs are USD 8 trillion by 2050 and USD 22.7 trillion by 2070, translating to USD
500 billion per year. These magnitudes align with other assessments-UBS estimates ~USD 19.6
trillion to 2070 and McKinsey ~USD 7.2 trillion to 2050.
Actual flows are far lower. The International Energy Agency (IEA) estimates finance flows of ~USD
135 billion in 2024 for India’s energy system against the USD 500 billion annual requirement.
Power accounts for nearly half of total needs as electricity’s share in final energy demand is
projected to rise from ~20% to ~60% by 2070.
The challenge is not only the quantum of capital, but the system’s ability to channel diverse
pools into investable, risk-adjusted opportunities. Banks/NBFCs face asset–liability mismatches,
institutional investors are constrained by regulatory caps, corporate bond markets remain
shallow, and high-risk premia (especially for newer technologies) deter foreign participation.
Financing constraints are therefore structural, not merely volumetric.
A calibrated expansion of long-term foreign capital, particularly from sovereign wealth funds
and global pension investors, can ease pressure on domestic savings, and lower borrowing
costs. It helps to improve the macroeconomic feasibility of sustained high investment, even if
accompanied by a modestly higher current account deficit relative to predominantly domestic-
financed scenarios.
Suggestions:
i. India’s climate-finance agenda is organised under six priority pillars: building a
credible climate-finance data backbone, aligning regulatory frameworks with a unified
Climate Finance Taxonomy (being developed by Dept of Economic Affairs, Government
of India), closing the financing gap through reforms aimed at expanding private
capital and attracting long-tenor foreign capital, accelerating project preparation and 189
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bankability, blending and sharing risk across stages and technologies and scaling
credible transition finance to bridge brown-to-green pathways.
ii. A structurally deeper corporate bond market is central to providing long-tenor,
non-bank financing for the transition, reducing reliance on bank balance sheets and
improving risk distribution across the financial system.
iii. Reorienting long-term institutional portfolios and household savings towards green
and transition assets expands the investible capital base while embedding climate
finance within India’s broader development finance architecture.
iv. A National Green Finance Institution (NGFI): It is envisaged that a purpose-built
institutional mechanism in form of NGFI can crowd in private capital, de-risk emerging
technologies, and coordinate fragmented financial actors.
Institutions such as International Financial Services Centre Authority (IFSCA)/Gujarat
International Finance Tech (GIFT) City can complement this architecture by serving
as systemic co-investment hubs, reducing regulatory friction, foreign exchange
hedging costs, and documentation asymmetries for global capital seeking exposure
to taxonomy-aligned green assets.
The core objectives of the proposed NGFI include:
Scale bankable sectors through refinancing windows, aggregation platforms, and
green credit lines.
De-risk emerging technologies using guarantees and VGF with sunset clauses
until commercial viability is achieved.
Channel blended capital to crowd in private and foreign investors at lower premia.
A dedicated white paper developed through structured consultation with regulators,
financial institutions, industry, and investors should set out the NGFI’s mandate,
governance, eligible instruments, risk framework, and capitalization plan.
10.3  DOMESTIC MANUFACTURING AND SUPPLY-CHAIN RESILIENCE
IN INDIA’S NET ZERO TRANSITION
India’s Net Zero transition coincides with a decisive phase in its structural transformation.
Manufacturing’s share of GDP stands at around 18 % with scope to grow further. Over the
past decade, policy emphasis has therefore shifted towards rapid manufacturing growth and
infrastructure-led expansion, reflected in initiatives such as the Production-Linked Incentive
schemes and the National Manufacturing Mission across electronics, pharmaceuticals, automotive,
textiles, semiconductors, and clean energy technologies. This direction aligns with the longer-
term objective of absorbing surplus rural labour, raising productivity, diversifying exports, and
moving up global value chains.
The Net Zero transition adds a new strategic dimension to this industrial agenda. Scaling solar,
batteries, electric vehicles, electrolysers, green hydrogen, and energy storage at Indian volumes
implies sharply higher demand for critical minerals, components, and advanced manufacturing.
The central opportunity lies in translating this deployment demand into domestic production
depth, thereby strengthening energy security, reducing external vulnerabilities, and accelerating
learning-by-doing in clean technologies. Domestic manufacturing depth and supply-chain 190
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resilience thus become not only an industrial priority but a key enabler of a cost-effective and
timely Net Zero pathway.
India’s manufacturing trajectory will also be shaped by evolving global production dynamics.
Manufacturing worldwide has become increasingly capital-intensive, as rapid advances in
automation, digital technologies, and artificial intelligence are reshaping traditional pathways
of industrialisation. In this context, competitiveness depends less on scale alone and more
on focused specialisation, faster productivity growth, and the ability to integrate low-carbon
production as a source of value rather than as a compliance obligation.
At the domestic level, this global shift intersects with existing structural features of Indian
manufacturing. Domestic production remains dependent on imports for several critical
components and sub-systems, particularly in appliances, power electronics, and clean energy
technologies. This dependence extends beyond raw materials to include precision components,
specialised machinery, and certain process technologies, shaping both cost structures and
vulnerability to external disruptions. At the same time, limited availability of verified product-
level emissions data and embodied-carbon benchmarks constrains the capacity of markets
to distinguish cleaner products from conventional alternatives, weakening incentives for low-
carbon manufacturing differentiation.
Circular economy pathways are closely linked to the scale and structure of domestic
manufacturing. At current manufacturing levels, material recovery from recycling is expected
to contribute to meeting a portion of domestic demand for selected battery and clean-tech
minerals. As manufacturing depth expands, the balance between secondary material recovery
and primary resource use is likely to evolve, reflecting the interaction between industrial scale,
technology choices, and global material flows.
Suggestions:
A manufacturing strategy aligned with India’s Net Zero transition can be organised around
three reinforcing objectives: building domestic production depth, strengthening supply-chain
resilience, and embedding low-carbon competitiveness as a structural advantage.
i. Reorient industrial incentives towards building complete clean-technology value
chains rather than only final assembly. The PLI framework can be leveraged across
clean energy equipment, appliances, and advanced materials, with stronger MSME
participation and closer alignment between industrial policy and mission-oriented R&D
to move technologies from pilot scale to commercial manufacturing.
ii. Strengthen supply-chain resilience through a coordinated minerals-to-manufacturing
approach. Stronger domestic exploration and geological data expanded refining and
advanced recycling capacity and diversified overseas mineral partnerships together
improve the reliability of material and intermediate inputs for clean manufacturing.
iii. Embed low-carbon production as a source of industrial competitiveness through
clear embodied-carbon benchmarks and lifecycle-based public procurement. Promote
trade policy that eases access to essential intermediate inputs and equipment for
green value chains to reinforce cost competitiveness and support domestic capability
in clean manufacturing. 191
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10.4 BUILDING A COHERENT AND TRUSTED ENERGY DATA
ARCHITECTURE
India’s Net Zero execution hinges on trusted, interoperable data. Today, however, the energy-data
landscape is fragmented across producers, consumers, fuels, and agencies, slowing decision-
making, and raising transaction costs.
The first challenge is non-uniform classifications and methods. End-use categories and product
definitions vary across ministries and often diverge from ISIC (International Standard Industrial
Classification of all Economic Activities) and SIEC (Standard International Energy-product
Classification). For example, the Central Electricity Authority (CEA) reports Industry as a single
consolidated consumer for coal consumption, while the Ministry of Coal reports granular sub-
sectors (steel, cement, etc.). Coal classifications used by the Ministry of Coal are also not aligned
with international standards. Further, conversion factors are not consistently harmonised. These
divergences constrain the assembly of a coherent national energy balance and complicate
comparison with international series.
The second challenge is specific gaps and “black boxes.” Examples include: a large “Others”
bucket in industrial coal use reported by the coal ministry; no sectoral end-use view for imported
coal; HSD volumes concentrated under the “Retail/Reseller” category in Ministry of Petroleum
and Natural Gas (MoPNG) reporting, masking true end-users; bioenergy flows are not tracked
by any single ministry; and international marine/aviation bunkers not included in Total Primary
Energy Supply (TPES).
The third challenge is cross-source inconsistency and incomplete external reporting. Headline
indicators (e.g., per-capita electricity consumption) and average coal GCV to power differ
between Ministry of Statistics and Programme Implementation (MoSPI) and CEA. Together,
these gaps limit the analytical completeness of India’s energy system view.
Finally, digitisation is uneven across sectors and user-facing systems. Interoperability for EV
charging remains limited, constraining seamless discovery and payments across charging
networks and missing a chance to create continuous, user-level demand signals. Unified
Energy Interface (UEI) is conceived in India to address the challenge of seamless discovery and
settlement, a UPI-like, open network for energy transactions built on the Beckn protocol (Beckn
Protocol is an open and interoperable protocol for decentralised digital commerce), starting
with EV-charging interoperability, and advanced by the UEI Alliance alongside the government’s
emerging India Energy Stack vision from the Ministry of Power.
Suggestions:
i. Bridge national energy-statistics gaps: The newly formed MoSPI Expert Committee
should design a time-bound plan to reconcile classifications with ISIC/SIEC, standardise
conversion factors, and resolve gaps that exist in the current energy statistics.
ii. Align national series and climate reporting: MoSPI’s energy series can be aligned
with MoEFCC’s Biennial Transparency Report (BTR) pathway from Tier-1 to Tier-3,
ensuring consistency between emissions inventories and energy balances. Disclosure
frameworks can be aligned with the Climate Finance Taxonomy (under development)
and SEBI’s Business Responsibility and Sustainability Reporting (BRSR)/BRSR-Core. 192
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The national dashboard (ICED) can be strengthened as the single source of truth, with
versioned methodologies and transparent reconciliation notes.
iii. Strengthen state-level energy and emissions statistics: Establish state cells to produce
annual energy balances and GHG inventories consistent with national methods (moving
towards BTR Tier-3 granularity). Provide a common template, conformance checks,
and an ICED-State workspace that rolls up to the national view while preserving state-
level metadata and audit trails.
iv. Recognize Unified Energy Interface (UEI) for EVs as the first digital rail (and beyond):
UEI can serve as the interoperability layer for EV charging, with UEI-readiness integrated
into publicly supported and fleet chargers. By enabling seamless discovery, payments,
and settlement across networks, UEI lowers transaction costs, supports roaming and
demand response, and provides the transactional foundation for the India Energy
Stack, while generating high-quality system-level data for national and state planning.
10.5  INNOVATION AND RESEARCH & DEVELOPMENT: BUILDING
INDIA’S LOW-CARBON TECHNOLOGY FRONTIER
India’s Net Zero pathway depends both on scaling existing low-carbon solutions and advancing
the technological frontier in hard-to-abate sectors. The national R&D effort needs to be stepped
up from the current levels to take advantage of the opportunity. Innovation activity today
remains concentrated in pharmaceuticals, IT, transport, defence, and biotechnology, while
climate-relevant domains receive less attention. R&D output mirrors this pattern. India generated
around 2,800 environment-related patents in the past decade, roughly one-tenth of China or
Germany. These need to improve for India to shape, rather than follow, global low-carbon value
chains.
The structural implications are significant. Nearly half of global emissions reductions required
by mid-century depend on technologies that remain at prototype or demonstration stage,
including green hydrogen and ammonia, carbon capture and storage, long-duration energy
storage, low-carbon steel and cement, and advanced biofuels and sustainable aviation fuels.
A thin domestic pipeline in these areas risks locking India into technology import dependence
at higher long-term cost. Further, private sector participation in climate-relevant R&D remains
limited and concentrated, while start-ups and MSMEs face capital and risk barriers that restrict
commercialisation and patenting. The persistence of the “valley of death”, driven by weak early-
stage demand and limited green procurement, further slows the transition from laboratory to
market.
Suggestions:
i. Expand total R&D with a larger role for business expenditure. This will align India
more closely with innovation-driven growth pathways. Raising business shares of
R&D personnel and researchers towards top-ten-economy benchmarks would deepen
industry-embedded innovation capacity, while sectoral low-carbon innovation funds
with milestone-linked support such as electrolyser cost trajectories and battery
energy-density benchmarks can improve capital allocation toward climate-relevant
technologies. 193
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ii. Establish Mission-oriented clusters that pool CSIR, IITs, IISc, national laboratories,
and industry with explicit technology-to-commercialisation pathways across hydrogen
and ammonia, CCUS, long-duration storage, green steel and cement, and advanced
biofuels and SAF. This will reduce fragmentation and accelerate learning curves. Clean-
tech innovation hubs and incubators, equipped with shared laboratories and pilot-scale
facilities such as battery centres and high-voltage testing, can co-locate researchers,
start-ups, and industry, while mobilising CSR and impact capital to bridge early-stage
risk.
iii. Market creation remains critical to overcoming the innovation–deployment gap.
Targeted mandates such as partial green hydrogen use in fertilisers and public
procurement of green steel and cement can seed early demand and de-risk first
movers. Regulatory sandboxes for vehicle-to-grid integration, peer-to-peer trading, and
carbon-capture utilisation pilots, alongside the development of technical standards for
hydrogen quality, battery safety, and system interoperability, can further build investor
and consumer confidence.
iv. India’s innovation system stands to benefit from deeper integration into global
knowledge networks. Mission-oriented alliances and bilateral programmes, selective
licensing and joint ventures, and expanded fellowships and research exchanges can
embed frontier expertise in Indian institutions while preserving domestic technological
depth.
10.6  GOVERNANCE, REGULATION AND INSTITUTIONS: ALIGNING
ACCOUNTABILITY
India’s Net Zero transition spans ministries, sectors, and multiple tiers of government, embedding
climate action within a complex institutional landscape. Existing arrangements comprising the
Prime Minister’s Council on Climate Change (PMCCC), the Ministry of Environment, Forest
and Climate Change (MoEFCC), line ministries, regulators, and state agencies have enabled
substantial progress. However, coordination and follow-through can improve. Climate action
continues to be pursued largely through sectoral instruments rather than through an integrated
legal or institutional framework.
The division of responsibilities complicates execution. While electricity lies in the concurrent
list, land, water, agriculture, and urban governance are largely state subjects, creating a persistent
misalignment between central policy direction and state-level delivery capacity.
At the delivery level, low-carbon growth levers are distributed across jurisdictions with
significant variation in capacity, data systems, and fiscal incentives across states. Although State
Action Plans on Climate Change (SAPCCs) exist, their integration with state budgets, sectoral
plans, and investment pipelines remains uneven, raising transaction costs and contributing to
fragmented execution.
In parallel, regulatory frameworks have not consistently evolved to reward flexibility or low-
carbon choices. Core rules and administrative codes covering power markets, permissions,
urban planning, labour, and dispute resolution often rely on case-by-case clearances. These
features elevate risk premia, delay otherwise bankable investments, and inflate system costs. 194
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Institutional capacity continues to constrain the pace and consistency of delivery. Execution
agencies including DISCOMs, State Pollution Control Boards (SPCBs), State Electricity
Regulatory Commissions (SERCs), Urban Local Bodies (ULBs), and line departments operate
under significant human, technical, and analytical constraints, limiting the effectiveness of policy
intent on the ground.
Suggestions:
i. Strengthening apex coordination and strategic coherence. Strengthen the Prime
Minister Council on Climate Change as the apex coordination forum to anchor
institutional reform.
Establish a full-time Low-Carbon Development Cell/Secretariat to professionalise
climate governance by providing analytics, coordinating cross-cutting bottlenecks
such as land, transmission, and finance, and issuing implementation guidance that
aligns missions and schemes across ministries.
Embed the National Determined Contributions (NDC) cycle into domestic planning
through sectoral and state-level five-year roadmaps and development plans,
to translate international commitments into sustained domestic accountability.
Independent assessment mechanisms, anchored in DMEO and NITI Aayog through
an Annual Climate Progress Report, can strengthen transparency and evidence-
based course correction.
ii. Improving centre–state alignment and delivery systems. Provide pooled technical
assistance for states, alongside embedded climate cells in key departments supported
by shared analytics from the Low Carbon Development Cell/Secretariat, to reduce
transaction costs and improve execution quality.
iii. Modernising regulatory processes (software) to lower risk and accelerate deployment
Align electricity market design, tariffs, and grid codes to support storage,
demand response, open access, and predictable curtailment compensation can
reduce system costs and risk premia.
Standardise digital, time-bound land and environmental clearances and clarifying
low-risk dual-use land categories, such as agrivoltaics, can accelerate project
timelines without diluting safeguards.
Integrate energy codes into urban permits, digitising approvals aligned with
national model codes, and operationalising risk-based labour safeguards consistent
with safety and efficiency norms can further reduce regulatory friction.
Undertake complementary reforms in compliance, inspection, and dispute
resolution through risk-based inspections, integrated single-window interfaces,
fast-track climate-relevant disputes, and pre-announced performance standards
with defined transition pathways can enhance regulatory certainty and lower the
cost of capital.
iv. Build institutional capacity for sustained delivery. Strengthen institutional capacity
through training, shared analytics and Monitoring Reporting and Verification (MRV)
frameworks, and improved staffing of climate cells at all levels to support sustained
and effective climate governance. 195
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10.7 MAPPING VULNERABILITY, COSTING RESILIENCE
Adaptation constitutes a first-order development priority and an unavoidable addition to
development costs. It is neither a co-benefit of mitigation nor a substitute for it. Climate-resilient
development entails real trade-offs, with uneven burdens across regions and communities.
IPCC AR6 underscores that opportunities for climate-resilient development diminish with
rising warming, and that equity and capability shape how countries balance adaptation and
mitigation. These realities frame adaptation not merely as an environmental concern but as a
core determinant of development outcomes.
India faces significant exposure across its coasts, the Himalayan region, water-stressed basins,
and rapidly urbanising districts. Rising climate risks are already imposing mounting costs on
infrastructure, livelihoods, and public finances, elevating resilience from a sectoral issue to a
macroeconomic imperative. Yet the spatial distribution of risk, the heterogeneity of impacts
across sectors, and the absence of uniform vulnerability baselines complicate prioritisation and
resource allocation.
The scale of the challenge is substantial. India’s Initial Adaptation Communication estimates INR
56.68 trillion for adaptation to 2030 under business-as-usual, with potential climate damage costs
of INR 15.5 trillion by 2030 and total pressures approaching INR 72 trillion when development
and climate stresses are jointly accounted for. At the same time, global climate finance has
consistently fallen short of pledges, with adaptation receiving a modest share relative to need.
This reinforces India’s reliance on domestic resources even as the case for scaled, predictable,
and concessional international support remains strong.
Even with effective adaptation, residual impacts and loss and damage will occur when hazards
exceed coping capacity. Anticipating and planning for such outcomes is therefore an integral
part of a realistic resilience strategy rather than a marginal consideration.
Suggestions:
i. Strengthening knowledge systems and anticipatory capacity. Enhance high-resolution
climate modelling, expand observation networks, and develop bottom-up risk profiling
across sectors and regions. Strengthen climate services and last-mile communication
to translate risk information into actionable insights for communities, planners, and
investors.
ii. Reducing exposure through spatial and infrastructure planning: Expand the reach
and reliability of early warning systems; upgrade urban stormwater and drainage
systems; improve river, coastal, and watershed risk management; protect and restore
ecosystem buffers; and embed long-horizon land-use choices into urban and regional
planning frameworks.
iii. Building adaptive capacity and resilience at scale: Promote R&D and Make-in-India
adaptation technologies; expand inclusive credit and social safety nets; support livelihood
diversification; and strengthen gender-responsive and community-led approaches
to resilience. A critical enabling step is a comprehensive national vulnerability and
adaptation-costing exercise, designed to: 196
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Produce district- and asset-level vulnerability maps integrating hazards, exposure,
and socio-economic sensitivity
Establish uniform damage-and-loss baselines
Estimate adaptation costs by sector and geography, including capital, O&M, and
residual-risk buffers
Aggregate results into a medium-term financing envelope distinguishing domestic
resources from concessional and grant needs.
These outputs can directly inform standards and codes, land-use plans, and public
investment appraisal, and establish a framework for tracking resilience outcomes over time.
Way Forward to Net Zero
India’s Net Zero transition will ultimately be decided not by ambition but by delivery. The
chapters show that low-carbon growth is a mosaic of many simultaneous moves: mobility that
avoids–shifts–improves; industries that double down on efficiency, electrification, circularity, and
frontier technologies; buildings that embed Net Zero-ready design and enforce it; a power
system rebuilt for scale, stability, and speed; and agriculture that aligns mitigation with income,
water security, and resilience.
However, to ensure these ambitions materialize, India needs a purpose-built delivery
architecture: one that turns policy into bankable pipelines, connects capital to results, and
ensures accountability and agility at every step. Framed as a triangular model (Figure 10.1), the
proposed architecture has three integral layers:
i. At the apex, High-Level Climate Governance and Coordination: Strategic direction
must come from an empowered apex body—such as a reconstituted Low Carbon
Development Cell/ Secretariat tasked with inter-ministerial coordination, long-term
planning, and alignment of national, state, and sectoral targets. Five-year emissions and
investment budgets, linked to the NDC cycle, can provide continuity and accountability.
ii. At the core, Mobilising Finance through Institutional Mechanisms: Finance is the
bridge between policy and execution. A dedicated National Green Finance Institution,
along with standardised project pipelines (e.g. ASSET), a green taxonomy, blended
finance structures, and risk-sharing tools, will be essential to crowd in private and
foreign capital without displacing domestic priorities.
iii. At the base, Implementation through Enabling Pillars:
Regulatory and Market Reforms: Reforms are needed to unlock private investment,
ensure cost-reflective pricing, streamline clearances, and strengthen institutions
such as SERCs, DISCOMs, ULBs, and financial regulators.
Mission-Mode Implementation and Innovation: Time-bound national missions with
empowered secretariats, digital Monitoring, Reporting, and Verification (MRV),
and access to finance can drive large-scale transformation in priority areas. 197
Enabling the Net Zero Transition: Challenges and Opportunities Scenarios Towards Viksit Bharat and Net Zero: An Overview
High-level 
Climate 
Governance
Regulatory 
and 
Market Reforms
Mission
ModeI
Implementation
Mobilizing
Finance
Figure 10.1: Delivery architecture for Net Zero
A few principles tie this agenda together:
i. Sector-specific, solution-stacked action: Passenger and freight systems must rebalance
toward mass transit, rail and waterways, and EVs, while improving safety and logistics
performance. Industrial low-carbon growth demands MSME-centred efficiency and
electrification now, while India pilots H₂-DRI, LC3, inert anodes, and CCUS to bend
future cost curves. Buildings policy must expand beyond design-stage operational
energy to whole-life performance, retrofits, and commissioning. Power must add clean
baseload, storage, and RE hybrids while modernizing coal operations. Agriculture
must sequence crop diversification, water-smart rice, nutrient balance, and livestock
productivity so climate gains flow through income and resilience.
ii. Supply-chain and resource realism: Critical minerals, domestic manufacturing,
and circularity must advance together so clean systems do not replicate fossil-era
dependencies. Land and water constraints demand low-conflict siting, dual-use models
such as agrivoltaics and floating solar), and basin-aware planning.
iii. Data, digital rails, and standards as the trust fabric: Harmonised classifications, open
dashboards, stronger MRV, and interoperable rails like the Unified Energy Interface
move markets from claims to verifiable performance and lower transaction costs across
EVs, energy services, and finance.
iv. People-first transitions: Skilling, redeployment, inclusion, and affordability will
determine the pace of India’s transition. Mapping exposed workers and communities,
sequencing retrain-to-retain pathways, steering green investment toward vulnerable
districts, and cushioning near-term price effects with targeted transfers and mass-
market efficiency are essential. 198
Enabling the Net Zero Transition: Challenges and Opportunities Scenarios Towards Viksit Bharat and Net Zero: An Overview
Mission-Mode Implementation and Innovation
Four national missions can focus effort, funding, and innovation on cross-sector outcomes,
each backed by small empowered secretariats, time-bound targets, digital MRV, and access to
finance:
i. Mission on Demand-Side Management—super-efficient appliances, digital building
-code enforcement, city programmes for shared mobility and non-motorised transport
aligned with Mission LiFE.
ii. Mission on Circular Economy—EPR-anchored recycled-content targets, industrial
symbiosis under clear standards, formalised last-mile collection, organised scrap
markets with digital material-flow tracking, and fiscal levers to reduce virgin-material
dependence.
iii. Mission on Systemic Electrification—electrification of transport, buildings and industry
with clean power: ZEV mandates, EV-ready codes, interoperable charging (UEI),
process-temperature maps, concessional support for electric boilers/furnaces/heat
pumps, scaled captive/RESCO models and streamlined open access.
iv. Mission on Industrial Innovation—pilot-to-demo programmes for H₂-DRI, LC3, inert
anodes and CCUS, green-hydrogen hubs that co-locate renewables/electrolysers/
offtakers, buyers’ platforms and green public procurement, and domestic manufacturing
with clear standards, taxonomy and product-carbon certification.
If India executes such a programme with discipline—sector stacks plus enabling stacks, finance
plus institutions, technology plus people—it can deliver a credible emissions pathway to Net
Zero while strengthening competitiveness, resilience, and inclusion. The outcome will not only
be a lower-carbon economy, but a better-built Viksit Bharat: cleaner air and safer streets,
efficient, future-ready industries and buildings, a reliable, digital, and flexible grid, resilient farms
and livelihoods, and institutions capable of delivering at the scale and speed demanded by a
Viksit Bharat.
The transition is India’s opportunity to shape a Viksit Bharat—cleaner, more competitive, and
more resilient. REFERENCES 200Scenarios Towards Viksit Bharat and Net Zero: An Overview
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adaptation-building-resilience-to-climate-change-in-india Study Report on Scenarios towards Viksit Bharat and Net Zero: An overview
VOL. 1
AN OVERVIEW
STUDY REPORT ON SCENARIOS
TOWARDS VIKSIT BHARAT AND NET ZERO: