India’s clean energy transition has been largely focused on domestic market formation to make the most of the decline in renewable energy (RE) costs. The aim of cost-effectiveness and minimisation has meant little attention to clean energy R&D. Long-term technology upgrading did not fit the needs. Consequently, investment in R&D and its deployment has been minuscule. The production-linked incentives (PLI) to promote RE equipment manufacturing and the green hydrogen and energy storage missions offer something of a course correction. But they are not enough.
The world’s leading economies have rolled out green industrial plans with protectionist hues – the Inflation Reduction Act in the US, and the Green Industrial Strategy in China. A green subsidies war is brewing and barriers to export of relevant technologies are being erected. This situation will impact clean technology investments and trade, leaving emerging economies like India at a disadvantage. Safeguarding India’s decarbonisation and economic growth requires a green industrial strategy focused on investing in creating local capacities for innovation, R&D and deployment of technologies. It must create partnerships among industry, public and private sectors, and academia, leading to investment across multiple clean-technology value chains.
