India’s power transmission sector is expected to witness a strong recovery after a period of slow growth between 2022 and 2026. A recent report by SBICAPS highlights that the sector is likely to rebound significantly by the financial year 2027, driven by rising demand for electricity and renewed investment activity.
In the past few years, the sector struggled to meet its targets due to multiple challenges. These included shortages of critical equipment, delays in land acquisition, and execution bottlenecks. As a result, several key projects were pushed back, creating a gap between planned and actual infrastructure development. However, 2026 has already shown early signs of improvement, with transmission line additions increasing by 37%, indicating that the sector is gradually regaining momentum.
Looking ahead, experts estimate a massive investment opportunity of around ₹7.6 trillion over the next six years. This is largely linked to India’s efforts to achieve the goals outlined in the National Electricity Plan. Although the transmission capacity target set for March 2027 is likely to be missed, the unmet demand is expected to translate into a large pipeline of future projects. To bridge this gap, the pace of building new transmission lines and substations will need to increase more than threefold compared to current levels.
Another important trend shaping the sector is the shift in funding and project management strategies. The government is increasingly focusing on asset monetisation, a model that allows companies to unlock value from existing operational assets and use that capital to fund new projects. In this context, Infrastructure Investment Trusts (InvITs) are emerging as a key tool. These trusts are particularly suitable for transmission projects because they generate stable and predictable returns over long periods.
At the same time, investment opportunities are expanding beyond inter-state transmission networks to include intra-state systems. These local networks are expected to offer a nearly ₹2.9 trillion opportunity, attracting private sector participation and further supporting the monetisation push. This shift reflects a more balanced approach to grid development, ensuring that power distribution within states keeps pace with national-level infrastructure.
Regulatory changes are also playing a crucial role in reshaping the sector. The gradual withdrawal of transmission charge waivers for inter-state renewable energy projects is expected to encourage states to invest more in local renewable generation. While this may create some short-term challenges, it is considered beneficial in the long run as it promotes better utilisation of resources and reduces dependency on long-distance transmission.
In addition, advancements in energy storage technologies are expected to improve the efficiency of the transmission network. Affordable storage solutions can help balance electricity supply and demand throughout the day, reducing pressure on transmission lines and minimising the need for constant capacity expansion.
Overall, despite earlier setbacks, the outlook for India’s power transmission sector remains positive. With the country’s power generation capacity projected to more than double by 2036 due to economic growth and rising demand for cooling, the need for a robust and expanded transmission network will only increase. This makes the sector a critical pillar in supporting India’s long-term energy transition and infrastructure development.
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