India’s net-zero transition offers $22.7 trillion investment opportunity: Report

New Delhi: India’s ambition to achieve net-zero emissions by 2070 could create an estimated USD 22.7 trillion investment opportunity across clean energy and infrastructure, but mobilising that capital will require substantial international funding, according to a report by Australian economist Nicki Hutley.

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Titled India’s Net Zero Transition is the World’s Net Zero Transition, the report estimates that domestic resources could meet just over 70 percent of the investment requirement. That leaves a funding gap of about USD 6.5 trillion, giving foreign investors, development finance institutions and international financial markets a significant role in financing the transition.

The opportunity spans renewable power, electricity transmission and distribution, battery storage, green hydrogen, transport electrification and industrial decarbonisation.

Hutley, who is associated with Australia’s Climate Council, argues that India’s transition should be viewed as a major investment opportunity for global businesses and financial institutions, alongside its importance to climate action.

Growth and emissions

The report places India’s development needs at the centre of the transition. While the country is the world’s third-largest greenhouse gas emitter in absolute terms, its per-capita emissions are estimated at 3.1 tonnes of carbon dioxide equivalent, against a global average of 6.6 tonnes.

India’s GDP per capita of about USD 2,810 also underscores the need for sustained growth, infrastructure expansion and improvements in living standards, it says.

The challenge, the report argues, is to meet those aspirations while increasingly supplying additional energy demand through low-carbon sources. India aims to become a developed economy by 2047 and achieve net-zero emissions by 2070.

Urbanisation, industrialisation, population growth, rising air-conditioning use and expanding data centres are expected to drive energy demand over the coming decades. How India meets that demand will influence both its emissions trajectory and global efforts to achieve the Paris Agreement’s temperature goals.

Capacity versus generation

Non-fossil sources accounted for 54.2 percent of India’s installed electricity capacity by June 2026, according to the report. Renewable energy’s share of actual grid generation, however, remained considerably lower, at around a quarter.

This highlights the importance of investment beyond generation capacity, including grids and storage, to support the transition.

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Financing barriers

Turning the projected opportunity into investment will require addressing financing costs, regulatory predictability, grid constraints and the financial health of electricity distribution companies, the report says.

For international investors, the task is to identify commercially viable projects across a rapidly expanding energy system. For India, the priority is to secure capital that supports development while avoiding long-term dependence on fossil-fuel infrastructure.

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