India is at a critical juncture in its transition to clean energy. The nation has set ambitious targets: achieving net-zero emissions by 2070, sourcing 50% of its energy from non-fossil fuels by 2030, and ensuring that 30% of new vehicles sold by 2030 are electric. Currently, India’s total installed energy capacity stands at 442 GW, with renewable sources comprising 33% and hydropower contributing 11%. Due to the rapid expansion of renewable energy installations, India remains confident in meeting its 2030 clean energy objectives ahead of schedule.
India’s progress has primarily stemmed from clear and targeted policy incentives. Between 2010 and 2023, the country’s renewable energy capacity grew eightfold, driven by supportive government policies and declining costs of solar and wind technologies. These policies, alongside financial innovations, have encouraged more venture capital investments and created more opportunities for startups and MSMEs. As a result, cleantech expenditure reached USD 68 billion in 2023, a 40% rise compared to the average from 2016 to 2020.
However, these ambitions bring their own set of challenges—chief among them is reducing India’s reliance on imported cleantech components. India’s cleantech manufacturing import dependence across renewable energy, electric mobility and other cleantech sectors’ value chains vary from 20% to 90%; specifically, 80% in Solar, 60% in Wind, 75-90 % in Battery Energy Storage Systems, 60-70% in E-mobility (EV motors and controllers), 90% in Green Hydrogen, and 20-30% in Bio-energy sectors. Without decisive policy action, India’s cleantech imports could surge to USD 85–110 billion by 2030 and as high as USD 140–300 billion by 2040, rivalling the country’s current oil import bill. Reducing this dependence and capturing the economic benefits of the green transition requires indigenizing supply chains and establishing a robust domestic manufacturing base. Policy must address capital costs, supply chain bottlenecks, and constraints in local technology expertise to seize this opportunity. This dependence is more than economic; it is strategic. In a world of techno-nationalism and fragmented supply chains, clean technology has become the new oil. Nations are weaponising critical minerals and tightening export controls. For India, relying on foreign hardware to fuel our green economy is a risk we cannot afford to take. That is why our green transition must be Made in India. As Prime Minister Modi has rightly emphasised, the path to Atmanirbhar Bharat and Viksit Bharat runs through Swadeshi innovation.
To achieve its clean energy objectives, India must realign its policy priorities to expand domestic manufacturing across all relevant sectors. This calls for comprehensive, well-structured interventions throughout the cleantech value chain, including incentivising private investment, expediting adoption among local manufacturers, and addressing areas with lagging progress. By adopting this approach, India can not only advance its energy transition but also enhance economic autonomy and support broader socio-economic development. The nation’s strategic assets, its favourable geographic location, competitive labour costs, and rapid growth in renewable energy, provide a strong foundation for becoming a leading cleantech hub. However, realising this potential requires closing supply chain gaps and maintaining cost-competitiveness in domestic production. Developing a robust cleantech manufacturing ecosystem will rely on advanced local technology, economies of scale, reliable access to raw materials, affordable inputs, sufficient financing, and a skilled workforce. While existing policy measures and private sector initiatives have produced encouraging initial outcomes, a more integrated and large-scale effort is necessary.
The international landscape is undergoing a significant transformation. As nations have pursued “China Plus One” strategies to diversify global supply chains, India has encountered intense competition from other emerging markets in Asia, Latin America, and Africa. To differentiate itself, India should not only strengthen its own capabilities but also adopt an “India Plus Many” strategy, cultivating alliances with like-minded economies to develop diversified, secure, and resilient supply networks. Establishing strategic partnerships will improve India’s competitiveness, expand market opportunities, and reinforce its position as a reliable provider in the cleantech sector. A new approach of going “Swadeshi with Partnership” may be the optimal way forward. Global alliances on finance, technology transfer, and market access should bolster our Swadeshi efforts.
Substantial policy-driven investments are currently underway, exemplified by the Production-Linked Incentive (PLI) schemes that have stimulated domestic output across critical sectors, including solar photovoltaics (PV), advanced battery storage, e-mobility, and green hydrogen. Notably, the solar PLI initiative, with an allocation of USD 3.21 billion, has facilitated integrated manufacturing spanning modules, cells, and wafers. Supplementary strategies, such as safeguard duties and manufacturing-linked auctions, have contributed to a decrease in import reliance, while annual cleantech investment reached a record high of USD 68 billion in 2023.
However, notwithstanding these initiatives, India’s cleantech manufacturing sector continues to face significant challenges. There is an urgent need to promote indigenisation at competitive costs by overcoming hurdles related to infrastructure, raw materials, logistics, and associated expenses—this can be achieved through supply chain partnerships and investments in research and development of affordable climate technologies. Financing remains a significant barrier, as high capital costs and unfavourable risk-return dynamics deter investment. Therefore, establishing long-term, innovative financing mechanisms is crucial to attract both domestic and international capital. Additionally, the sector faces a skilled workforce deficit, making it vital to enhance green skill development and improve the industry’s appeal to talented professionals for roles in supply chain management and emerging cleantech domains.
Furthermore, insufficient investment in research and innovation hinders the development of affordable, locally relevant solutions, underscoring the need for targeted initiatives and collaborative approaches. Dependence on imported upstream components, technologies, and raw materials highlights the need for technology-sharing agreements and the enhancement of domestic manufacturing capabilities. Finally, limited access to advanced machinery and manufacturing technologies continues to constrain the country’s production potential.
National Manufacturing Mission 2025 – including a focus on Cleantech Manufacturing
The National Manufacturing Mission, introduced in the Union Budget 2025, aims to advance India’s ‘Make in India’ initiative by providing comprehensive policy support, strategic execution plans, and a robust governance framework to coordinate activities among central ministries and state governments. In alignment with India’s climate objectives, the mission emphasises cleantech manufacturing, promoting domestic production and strengthening supply chains for critical clean energy components. These components include solar PV cells and modules, electric vehicle batteries and parts, hydrogen electrolysers, wind turbines, ultra-high voltage transmission equipment, and grid-scale batteries. This initiative aims to reduce India’s reliance on imports, enhance energy security, and accelerate the country’s transition to renewable energy.
The mission is structured around five principal pillars, each addressing a critical area of implementation. Its primary objective is to ease the process of doing business by optimising regulatory frameworks and offering incentives to support domestic production. The initiative seeks to develop a future-ready workforce via targeted skill development programmes and collaborative partnerships between industry and academia. Additionally, the mission aims to foster a robust and dynamic MSME sector with increased access to capital and enhanced supply chain integration. Further emphasis is placed on advancing technology through the promotion of research and development, innovation, and technology transfer. Finally, it seeks to elevate quality standards in manufacturing through recognised benchmarks and certification systems, thus enhancing global competitiveness. Collectively, these government-led initiatives underscore a strong commitment to advancing clean technology manufacturing in India.
We have the talent. We have the market. We have the urgency. Now we need clarity of direction and rapid execution. It is time to shape India’s green economy with Indian climate solutions—Make in India, Solve for the World. The Government of India must expedite the unveiling of the institutional architecture of the Manufacturing Mission and get its wheels in motion.
Author Brief Bio: Shri Jagjeet Singh Sareen is a Partner at Dalberg Advisors, based in Delhi, where he leads climate-related projects in the Asia Pacific and globally. Outside of project work, Jagjeet co-hosts the Bharat Climate Forum, a multi-stakeholder platform that brings together ministers, senior policymakers, corporate leaders, financiers, thinkers, and practitioners to drive ambitious and concrete climate action. He also focuses on climate thought leadership, strengthening internal capacities, strategic partnerships in the climate sector, enhancing collaboration across regions, and building a climate services platform for clients. Prior to joining Dalberg, Jagjeet served as the Assistant Director-General at the International Solar Alliance and as a Senior Policy Officer in the Global Climate Practice at the World Bank in Washington, D.C. Over the past 20 years of his career, his focus has been on green infrastructure, investment, and climate finance, working at the World Bank, the Asian Development Bank, the Green Climate Fund, the United Nations Climate Change Secretariat, Ernst & Young, and TERI. He has facilitated global climate finance negotiations and supported the design process of international climate funds at the UN and multilateral development banks. Shri Jagjeet has a master’s degree in Sustainability Management from the Indian Institute of Forest Management and a BSc in Agricultural Economics from Punjab Agriculture University in India.
