India’s Federal Minister for New & Renewable Energy and Power has provided an update on foreign direct investment (FDI) in India’s renewable energy sector. He stated that under India’s FDI policy, the renewable energy sector allows 100% FDI under the automatic route.
The government has taken several steps to attract FDI in renewable energy, including: setting up a Project Development Cell, declaring renewable purchase obligation trajectories until 2030, establishing Ultra Mega Renewable Energy Parks, building transmission infrastructure under the Green Energy Corridor project, and launching projects such as PM-KUSUM– an initiative to support farmers to install renewable energy based power plants, solar pumps and solarization of agriculture pumps. It aims to increase the share of non-fossil-fuel sources as also phase 2 of the solar rooftop program.
Other measures include the National Green Hydrogen Mission; notifying green energy open access rules 2022; launching the Green Term-Ahead Market — a power trading platform for bulk electricity buyers to procure renewable energy on a short-term basis from sellers; issuing bidding guidelines for renewable power procurement; waiving inter-state transmission charges for solar/wind projects till June 2025; notifying solar PV standards, and mandating letter of credit/advance payment for timely payment to renewable generators.
According to data from the Department for Promotion of Industry and Internal Trade, India received $6.14 billion in FDI equity inflows in the renewable energy sector over the 3 financial years through FY 2022-23 and current FY till September 2023. This information was shared by the Federal Minister in a written reply to a question in Parliament on December 19, 2023.
