India Climbs to 3rd Spot in Global Renewable Energy Capacity Rankings

India has emerged as a global leader in clean energy, securing the third position worldwide in installed renewable energy capacity. This milestone reflects the country’s accelerated push toward sustainability, energy security, and reduced reliance on fossil fuel imports.

Strong Momentum in Renewable Energy Expansion

India’s renewable energy sector has witnessed remarkable growth over the past few years, driven by policy support, rising investments, and technological advancements. According to a recent report by Morgan Stanley, the country’s transition to renewable energy is not only transforming its power landscape but also strengthening its long-term economic resilience.

The report highlights that India’s focus on expanding renewable capacity—particularly solar and wind—has enabled it to move ahead of several developed nations. This achievement underscores the country’s commitment to achieving its climate goals while ensuring sustainable development.

Solar Manufacturing Capacity Sees Major Jump

Data released by the Ministry of New and Renewable Energy reveals a significant surge in domestic solar manufacturing capacity. Solar module capacity in India has nearly doubled within a year, rising from 38 gigawatts in March 2024 to 74 gigawatts by March 2025.

This rapid expansion demonstrates India’s intent to build a robust domestic ecosystem for solar manufacturing, reducing its dependence on foreign suppliers.

In addition, solar cell production capacity has also recorded substantial growth, increasing from 9 gigawatts to 25 gigawatts during the same period. This improvement reflects ongoing investments in manufacturing infrastructure and supportive government initiatives such as production-linked incentive (PLI) schemes.

Continued Dependence on Imports Remains a Challenge

Despite the impressive gains in domestic manufacturing, India continues to rely heavily on imports for critical upstream components. These include solar wafers, polysilicon, and certain high-efficiency cells that are essential for solar panel production.

The Morgan Stanley report notes that during the financial year 2025, India imported approximately 35 million solar modules, valued at around $1.6 billion. A significant portion—estimated between 60% and 80%—was sourced from China.

This reliance exposes India to supply chain vulnerabilities and price fluctuations in the global market. It also highlights the urgent need for deeper localisation of the solar manufacturing value chain, particularly in upstream segments where India currently has limited capacity.

Non-Fossil Fuel Capacity Crosses Key Milestone

India’s energy transition has reached a crucial milestone, with non-fossil fuel-based capacity now accounting for more than 50% of the country’s total installed power capacity. The total non-fossil capacity has reached approximately 262.7 gigawatts.

This achievement aligns with India’s commitments under international climate agreements and reflects sustained efforts to diversify its energy mix. It also positions the country as a key player in the global fight against climate change.

Solar and wind energy continue to dominate the renewable energy portfolio, contributing the majority of recent capacity additions. Large-scale solar parks, rooftop installations, and wind corridors have significantly boosted overall output.

Solar and Wind Lead the Energy Transition

Among renewable sources, solar energy has emerged as the fastest-growing segment in India. The country’s geographic advantage, combined with falling technology costs, has made solar power increasingly competitive with conventional energy sources.

Wind energy, too, plays a vital role, particularly in states with favorable wind conditions such as Tamil Nadu, Gujarat, and Maharashtra. Together, solar and wind energy form the backbone of India’s renewable energy strategy.

The government’s continued focus on hybrid projects, energy storage solutions, and grid modernisation is expected to further enhance the efficiency and reliability of renewable power.

Localisation Key to Long-Term Success

While India’s progress in renewable energy capacity is commendable, experts believe that the next phase of growth will depend heavily on localisation efforts. Building domestic capabilities in solar wafers, polysilicon, and advanced battery storage technologies will be critical.

Reducing import dependence will not only strengthen supply chain resilience but also create jobs and boost the domestic manufacturing sector. It will also help India compete more effectively in the global clean energy market.

The Morgan Stanley report emphasises that policy consistency, financial incentives, and infrastructure development will play a crucial role in achieving these goals.

Strengthening Energy Security and Economic Stability

India’s transition to renewable energy is not just an environmental imperative—it is also a strategic move to enhance energy security. By reducing reliance on imported fossil fuels and critical components, the country can shield itself from global price shocks and geopolitical uncertainties.

Moreover, the expansion of renewable energy infrastructure is expected to attract significant investments, stimulate innovation, and create new economic opportunities.

The Road Ahead for India’s Clean Energy Future

Looking ahead, India is poised to play a central role in the global energy transition. With ambitious targets, including achieving 500 gigawatts of non-fossil fuel capacity by 2030, the country is on a path toward becoming a renewable energy powerhouse.

However, achieving these targets will require sustained efforts in policy implementation, technological innovation, and international collaboration. Addressing existing challenges, particularly in manufacturing and supply chains, will be key to maintaining growth momentum.