Industry Report | India's Renewable Energy Sector: Rapid and Sustained Expansion of Installed Capacity, Driven by Massive Investment for Future Growth

Leveraging abundant solar and wind resources alongside strong policy support, India’s renewable energy sector has achieved rapid growth in recent years. According to data from the International Renewable Energy Agency (IRENA), by the end of 2025, India ranked fourth globally in installed renewable power generation capacity—behind only China, the United States, and Brazil. Global Renewable Energy Installed Capacity Ranking (MW) In terms of generation capacity, India’s total installed renewable energy capacity reached 258 gigawatts (GW) by the end of 2025—up 49 GW from 209 GW at the end of 2024. This net increase was nearly double the entire annual addition in 2024, indicating that India’s renewable energy sector is steadily accelerating into a high-growth phase. From the perspective of energy mix, solar power has been the primary driver of India’s renewable energy expansion in recent years. Bolstered by declining global solar module prices and marginally improved project profitability, India’s solar power installed capacity rose by 24.5 GW year-on-year in 2025, reaching 133 GW—accounting for approximately 52% of total renewable energy capacity. Wind power ranked second among renewable sources, with an installed capacity of around 54 GW by end-2025; hydropower stood at approximately 50.4 GW; and other renewable sources—including biomass—held smaller shares of total installed capacity. India’s Renewable Energy Installed Capacity Share (2025) Regarding competitive landscape, Adani Green is India’s largest solar power project operator, while ReNew Power is the leading wind power project developer. In the photovoltaic and wind equipment supply chain, China’s JinkoSolar is India’s largest solar PV module supplier—highlighting India’s reliance on Chinese manufacturing in the solar sector. In wind equipment, Siemens Gamesa dominates the Indian market. By contrast, nearly 90% of India’s hydropower capacity is managed by government entities such as SJVN, with limited participation from private or foreign enterprises.

India’s Renewable Energy and Foreign Direct Investment (FDI)

Legal Framework The Indian Constitution establishes three categories of laws enacted by different authorities: (a) laws enacted by the Central Government; (b) laws enacted by State Governments; and (c) concurrent laws—i.e., laws that both the Central and State legislatures are empowered to enact. Energy-related legislation falls under the concurrent list; thus, both the Central Government and State Governments possess legislative authority over energy matters. The highest-ranking law governing the energy sector enacted by the Central Government is the Electricity Act, 2003. Since renewable energy forms part of the electricity sector, it falls under the purview of this Act, which provides the legal framework for power generation, transmission, distribution, trading, and consumption. Beyond the Electricity Act, 2003, the Government of India established a dedicated ministry—the Ministry of New and Renewable Energy (MNRE)—to promote grid-connected and off-grid renewable energy deployment. MNRE’s mandate includes enhancing the utilization of solar energy, biogas, small hydro, tidal energy, and geothermal energy, as well as addressing related challenges. MNRE oversees three independent specialized institutions: the National Institute of Solar Energy, the National Institute of Wind Energy, and the Sardar Swaran Singh National Institute of Renewable Energy. MNRE serves as the central nodal agency for new and renewable energy development and deployment, aiming to meet national energy demand through these sources. It offers both direct and indirect tax incentives—including exemptions from sales tax, excise duty, and customs duty. Currently, MNRE, together with the Ministry of Power and the Government of India, provides a 30% subsidy for solar projects. Several states—including Karnataka—offer loans to developers establishing solar power plants locally. Both Central and State agencies have launched multiple subsidy schemes for residential rooftop photovoltaic systems. Consumers may also feed surplus solar power back into the grid and receive predetermined compensation set by their local Distribution Company (DISCOM). FDI in the Energy Sector Government policies and initiatives aim to encourage investment in renewable energy. Under current regulations, companies engaged in non-conventional power generation may receive up to 100% foreign direct investment (FDI). Revisions to the Central Government’s FDI policy, investor partnerships, and business-enabling reforms have collectively improved FDI inflows—positioning India as a top-tier investment destination for international investors. Over the past eight years, more than USD 70 billion has been invested in India’s renewable energy sector. FDI in this sector has grown consistently over time: FDI inflows totaled USD 1.6 billion between FY 2021–22, compared to just USD 414.25 million between FY 2013–14.

Actis Plans $2 Billion Renewable Energy Platform in India

1 day ago

Actis LLP plans to invest approximately $2 billion into Leo Energies, its fourth clean energy platform in India, targeting over 3 gigawatts of solar, wind, and battery storage assets.

bloomberg

2026-09-30

Actis Plans $2 Billion Renewable Energy Platform in India

Actis Plans $2 Billion Renewable Energy Platform in India

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