Executive Summary

India has a critical role to play in the global energy transition. It has the natural resources and manufacturing base to become a leading global power in the new geopolitical order that is being restructured by clean energy technologies. To realize its aspirations, India must get its industrial strategy right.

A well designed and executed industrial strategy can support two geopolitical objectives. First, it can help India become self-reliant in the energy sector and thereby increase India’s independence and geopolitical leverage vis-à-vis the United States and China. Second, it can create the dynamic industries necessary to secure India’s position in the global green economy of the 21st century.

India has a 2070 net-zero target and has initiated a number of programs including the ‘Production-Linked Incentives’ (PLI) scheme launched in 2020. This industrial policy targets high-efficiency solar PV modules, advance chemistry cell (ACC) batteries, and specialty steel that will shape the green transition. Other initiatives central to the energy transition include National Steel Policy (2017), National Policy on Biofuels (2018, 2022), the National Mission on Transformative Mobility and Battery Storage (2019), and the National Green Hydrogen Mission (2023). These policies have put India’s clean industrial base on a strong footing.

Yet after four years, the government is now turning away from the PLI and must decide which path to take. It cannot abandon its industrial strategy. Rather, it must build on the lessons of earlier efforts to create a more focused and adaptive approach.