India's Transition to Clean Energy
India has made significant strides in the transition to cleaner forms of power over the last decade. This progress is reflected in increased budgetary allocations to the Ministry of New and Renewable Energy, from ₹1,535 crore in 2015 to ₹32,626 crore in 2025.
Budget Utilization and Challenges
- Despite increased allocations, funds have been underutilized in most years except 2015 and 2023, leading to lower revised estimates.
- The PM-KUSUM scheme, launched in 2019 with an outlay of ₹34,422 crore, aimed to promote solar energy in agriculture but received a tepid response.
Impact of COVID-19 and International Commitments
- The COVID-19 pandemic highlighted the need for energy transition due to disruptions in coal, oil, and gas supply chains.
- India pledged at COP26 in 2021 to produce half of its energy from renewables within five years.
Policy Initiatives
- The 2021 Budget introduced a ₹18,100 crore PLI scheme for advanced chemistry cell manufacturing to enhance battery storage capacity.
- Another PLI scheme for solar photovoltaic modules increased from ₹4,500 crore in 2021 to ₹19,500 crore in 2022.
- A basic customs duty of 40% on solar modules and 25% on solar cells was imposed to reduce dependence on Chinese imports, affecting installation rates.
Current Energy Landscape
- As of October 2024, renewables constitute 46% of India's total installed capacity, yet 70% of power output still depends on coal.
- Grid-scale battery storage technology is crucial to increase renewable energy output and reduce reliance on fossil fuels.
Import Duty Exemptions and Strategic Directions
- To counteract the potential inflationary effects of high basic customs duties, the government has exempted 12 critical minerals and 35 capital goods from these duties.
- India aims to reduce dependence on China by formulating a critical minerals framework that is environmentally and socially just.
Global Leadership and Future Prospects
With the U.S. withdrawing its leadership in clean energy transitions, India has an opportunity to play a larger role on the global stage by developing a robust and equitable framework for critical minerals extraction and distribution.