India Requires US$145 Billion in Annual Energy Investment to Bridge Growth and Climate Targets Wood Mackenzie shares critical pathway for India to navigate energy security and transition while maintaining 6% GDP growth through 2035
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Goa, 27 January 2026 – India must mobilise US$145 billion in annual energy investment to reconcile rapid economic growth with its climate ambitions, according to Wood Mackenzie, speaking at India Energy Week 2026.
Joshua Ngu, Vice Chairman, Asia Pacific at Wood Mackenzie, highlighted that sustained, targeted investment is essential for India to maintain around 6% GDP growth through 2035 while progressing toward net-zero targets. Capital must be strategically directed to power generation, energy storage, and grid modernisation.
"India faces a dual mandate: securing near-term energy reliability while building low-carbon infrastructure for long-term competitiveness," said Ngu. "The investment choices made today will shape the country's energy and economic trajectory for decades."
Power Sector Leads the Transition
India's power sector, the country's largest emissions source, is also the primary lever for decarbonisation. Non-fossil installed capacity has surpassed fossil capacity, signalling a structural shift. Future progress will be driven by renewables, grid flexibility, and energy storage, while coal additions are expected to focus on system reliability and peak demand rather than capacity growth.
"The projected US$1.5 trillion investment by 2035 is not just about adding capacity — it's about the wires," said Rashika Gupta, Vice President, Power and Renewables Research at Wood Mackenzie. "Modernising the grid and implementing market reforms, particularly through the Electricity Amendment Bill, are crucial to unlocking private capital and integrating renewable energy efficiently."
Balancing Energy Security with Transition Goals
Fossil fuels remain critical for India's near-term energy security. Coal production is on track to reach 1.5 billion tonnes by 2030, with increased focus on coal gasification. Crude oil import dependence may reach 87% by 2035, highlighting the need to revitalise domestic exploration and production. Natural gas demand is projected to double to 140 bcm by 2050, driven primarily by industrial use, with LNG imports rising steadily.
Local Supply Chains and Emerging Technologies
India is scaling solar and battery manufacturing, yet gaps remain in cell, wafer, and advanced battery production, creating potential near-term supply constraints. Green hydrogen and Carbon Capture, Utilisation and Storage (CCUS) initiatives are progressing but require further commercial scaling.
The Carbon Credit Trading Scheme (CCTS), launching in 2026, marks a significant policy shift toward mandatory emissions caps.
"By imposing these limits, the framework will incentivise the decoupling of industrial growth from emissions intensity," said Hetal Gandhi, Lead – CCUS, Asia Pacific at Wood Mackenzie. "Ultimately, this shift is the right first step to transform carbon compliance into a competitive differentiator and provides the regulatory certainty required to enable adoption of low-carbon technologies."
Strategic Global Opportunity
Despite challenges, India is positioned to become a credible large-scale alternative to China's solar and battery supply chains.
"India stands at a crossroads, but its long-term trajectory is bright," Ngu concluded. "By scaling domestic manufacturing and sustaining policy momentum, India can achieve its 500 GW renewable energy target and emerge as a cornerstone of the global clean energy economy."
