Mapping India's rise as a superpower of unconventional energy

As a burgeoning economic powerhouse, India is witnessing exponential energy demand growth given the size of its economy, expanding urban centres and population. Unsurprisingly, energy self-sufficiency and universal access have been the top priorities of successive administrations in Delhi.

It’s a mission made critical largely, but not completely, by a dependence on oil and gas imports for its energy needs. For instance, as the International Energy Agency notes, India is the world’s second-largest net importer of crude oil that will likely need 5.8 million barrels per day by 2030. Its natural gas demand is set for a 60% rise over a similar decade-end time frame to a range of 103-120 billion cubic meters.

While India’s colossal hydrocarbon imports and consumption often grab headlines, a steady parallel shift is afoot – a push to unconventional. It’s a shift that is both tempering higher fossil fuel importation projections as well as boosting the green credentials of a growing economy.

Greening up the power complex

As world’s third-largest consumer of electricity, India is on-track for 500 GW of non-fossil fuel capacity by 2030. The headline figure, according to the government, while based on sizeable chunks of solar and wind power, also factors in hydro and biomass, driven not just by energy security needs but climate commitments too.

Hon'ble Prime Minister Narendra Modi’s administration – which has been in power since May 2014 – has been near constant in its acknowledgment of India’s ongoing need to secure fossil fuel supplies as well as being loud and proud about the expansion of renewable energy as a national imperative. 

Alongside its main green segments of solar, wind, biomass and hydro, the government is also exploring geothermal, tidal and green hydrogen. Overall, India is seeing record renewable capacity additions, and investment in clean energy technologies like battery storage.

A turning point in 1992

While the Modi administration has unmistakably turbocharged unconventional in India, it’s a shift that’s been over three decades in the making.

In 1991, when the world’s focus of was on then Prime Minister P.V. Narasimha Rao and Finance Minister Manmohan Singh’s bid to liberalise India’s economy, the duo opted to promote a “Ministry for Non-Conventional Energy Sources” among other initiatives aimed at boosting economic growth. Until then it was just a government department, albeit one that existed since 1982.  

The Ministry formally debuted in 1992 as one among few of its kind globally. It was subsequently renamed in 2006 by then Prime Minister Singh as the Ministry of New and Renewable Energy. The Modi administration then gave it place of priority in 2014, expanded its scope and funding. The rest is one for the energy sector history books.

A transformative journey from 2014

For over the last decade, the world’s third-largest consumer of electricity has transformed under the Ministry’s stewardship to become its fourth-largest renewable energy producer. Nearly 50% of India’s total installed capacity as of last year is now from renewable sources, according to EY.

So, if where from here is the question on every investor’s mind – the simple answer is that things can only get greener intertwined with pragmatism. On the latter point, hydrocarbons will remain a huge part of India’s energy mix as will their related investment horizons over a 20 to 30-year period. The country’s target year to achieve net zero remains 2070.

Yet, at the same time, given the aggressive approach taken by the Modi administration on unconventional has seen India rise to third, behind only the US and China, in terms of attractiveness for renewable energy investments.

Focus on installed capacity

This is proving particularly true for solar, wind, hybrid and storage projects with the government often putting out as much 50 GW worth of capacity tenders per annum in recent years (e.g. 2023 – 2025). Demonstrating the extent of the progress, the latest data puts India’s “non-fossil power installed capacity” at 266.78 GW to end-December 2025, a growth of 23% on an annualised basis.

In particular, the current government’s Inter-State Transmission System (ISTS) waiver, that exempts transmission charges for renewable energy projects, has been a real business booster.

According to various estimates, around $80 billion has been invested in Indian renewables till date, with over half of that figure coming from leading global investors including the likes of ADIA, BII, Brookfield, GIC, KKR, Mubadala and Macquarie.

Between 2017 and 2024, such investments registered a compound annual growth rate of around 4%, according to EY. The Indian states of Gujarat, Karnataka and Tamil Nadu saw much of these capital inflows.

Such developments have undoubtedly led the Reserve Bank of India to conclude recently that the dominance of fossil fuels in India’s power mix will end in tandem with its 2030 renewable energy capacity target of 500 GW.

That is just the sort of boom territory green investors are hoping for and what makes the Indian unconventional energy segment well worth watching out for.