The share of renewable energy (RE) in India’s total foreign direct investment (FDI) inflows surged from approximately 1 per cent in FY21 to nearly 8 per cent in FY 2024-25, according to the latest Market Handbook released by the Council on Energy, Environment and Water’s Green Finance Centre (CEEW-GFC). The RE sector drew USD 3.4 billion in FDI during the first three quarters of FY25, nearly equaling the total FDI inflows of USD 3.7 billion recorded for the entire FY24.
The Market Handbook tracks major trends in India’s electricity, mobility, and green finance sectors, underscoring their critical role in the nation’s clean energy transition.
India added around 33 GW of new power generation capacity in FY25, with a record 89 per cent (29.5 GW) coming from renewable sources—an increase from 71 per cent in FY24. This brought the country’s total RE installed capacity to approximately 220 GW out of a total of 475 GW. Meanwhile, coal and lignite’s share in total installed capacity declined from 49 per cent (218 GW) in FY24 to 47 per cent (~222 GW) in FY25, highlighting the ongoing shift toward cleaner energy sources amid global energy uncertainties.
Gagan Sidhu, Director, CEEW-GFC, said: “India’s energy transition is at a crossroads. RE has clearly emerged as the dominant source of capacity addition, along with ~42 GW of RE auctioned in FY25. Notably, 59 per cent of this capacity was auctioned under innovative formats like firm and dispatchable renewables (FDRE) and hybrids, helping address grid resilience concerns amid rising RE penetration. All of this has been supported by strong overseas interest in India’s RE sector. FDI inflows in the first three quarters of FY25 nearly matched the total for all of FY24. While FY25 witnessed a decline in tenders issued by Renewable Energy Implementing Agencies (REIA)—down to ~33 GW in FY25 from 47.5 GW in FY24–state-level tender activity was strong. Most of the drop in capacity tendered by REIA’s can be traced to insufficient tendering for wind.”
The report highlighted that tenders incorporating energy storage components made up 24 per cent of total RE auctions in FY25, signalling continued innovation in auction design. Additionally, sovereign green bond auctions by the Reserve Bank of India raised USD 3.8 billion across six issuances, bolstering the sector’s financing landscape.
Shalu Agrawal, Director of Programmes, CEEW, noted: “To power a growing economy through clean and affordable energy, India’s power sector is rapidly tapping the country’s renewable energy potential through diversified financing sources, innovation in tender design and embracing new technology options for energy storage. One of the most promising trends of FY25 has been the discovery of very attractive prices for energy storage, which will enable cost-effective grid integration of renewables. We look forward to an inflexion point on storage soon, just like it happened for solar technology a decade ago.”
Battery energy storage systems (BESS) saw accelerated momentum, with seven standalone tenders completed in FY25. The lowest discovered tariff fell to INR 1.84 per unit with viability gap funding (VGF), marking a 54 per cent drop from FY24. A total of 16 standalone energy storage tenders were announced during the year, with VGF support approved for 4,000 MWh of capacity by FY 2030–31.
The Handbook also highlighted a sharp rise in electricity demand. India’s peak power demand reached an all-time high of 250 GW in Q1 FY25 and consistently stayed above 220 GW throughout the year. Total electricity generation rose by approximately 5 per cent over FY24. Renewables, including large hydro, now contribute about 21 per cent of the country’s average daily power generation.
On the mobility front, the report recorded over 1.9 million electric vehicle (EV) sales in FY25, a 17 per cent increase over FY24. October 2024 and March 2025 emerged as milestone months, each crossing the 2-lakh EV sales mark. By the end of FY25, India had achieved approximately 95 per cent of its EV sales target under the PM E-DRIVE scheme, affirming its significance in advancing clean mobility.
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