Energy Transition At the Crossroads: India’s Precarious Balance Between Growth and Decarbonization

India's energy revolution is now central to its economic growth, global standing, and climate credibility. The core challenge is clear: India must balance rapid economic expansion with decisive decarbonisation. How New Delhi navigates this trade-off will define the nation's future development and global influence. 

India's energy situation has changed a lot in the last ten years. The country's solar capacity has grown to over 82 GW, making it one of the fastest-growing renewable energy industries in the world. But there is a harsh truth that comes with this growth: coal still makes up more than 70 per cent of India's electricity. This symbolises that change is happening, but it hasn’t gotten past the pull of fossil fuels yet. This duality is not an accident and is not easy to fix. 

Coal remains India’s main energy source due to its reliability and low cost, even as renewables grow quickly. Challenges such as weak infrastructure, fragmented policies, and storage shortages impede further progress. At COP26, the government announced a net-zero goal for 2070—a bold statement in global politics.

Achieving net-zero hinges not on statements, but on the next decade’s policy choices. New Delhi’s recent tariffs on Chinese solar panels show intent to boost domestic production, but raise concerns about supply shortfalls and implementation delays. This is where the transition gets tough. 

In different states, coal money pays for a lot of things, such as jobs, welfare programs, and city infrastructure. If coal is phased out too soon without a clear plan for a fair transition, it could hurt the economy, especially in towns along the coal belt. Finding a middle ground between decarbonisation and the realities of politics and the economy is becoming increasingly difficult.

Transitioning is far from smooth. While some states have advanced renewable systems, others lag due to land challenges, unstable power grids, and misaligned policies.

Decentralised solar solutions, which could provide reliable electricity to areas with low energy needs, are not used enough because there isn't enough money or support from the government. A more basic question lies at the heart of this debate: who benefits from the change in energy sources? The promise of green energy means nothing to millions of people in rural and semi-urban India unless it can be turned into cheap, reliable power. 

Energy justice, which includes access, participation, and fair distribution, is now an important part of India's energy policy. But it's clear that India has some strategic advantages. The country has significant solar potential, a growing base for renewable energy production, and is increasingly influential in climate change discussions worldwide. What is missing is not ambition, but a steady, organised way to put things into action. 

India needs to make big changes to its grid infrastructure, set up regulatory frameworks, give more money to decentralised systems, and build investor trust by sending clear signals about its policies. 

The next step is to work on two fronts at once: phasing out coal in a way that doesn't hurt the state's finances and increasing the use of renewable energy without losing reliability. This means that coal-dependent state governments need to make detailed plans for the transition, with a strong commitment to community-level energy solutions. India is a major energy user, and the world is watching because it is also a key player in figuring out how to decarbonise the world. 

India stands at a genuine crossroads. Its energy transition must shift from isolated pilot projects and ambitious declarations to a cohesive, nationwide transformation. How New Delhi manages this balancing act—sustaining growth while decarbonising—will decisively shape both India's economy and its climate leadership. The process will remain politically complex and contested.

India’s energy revolution involves more than switching technologies—it will test economic, governmental, and global roles. Coal has delivered jobs, revenues, and stability, but now approaches its limits. Future growth relies on shifting from carbon-intensive infrastructure without harming state finances or leaving vulnerable areas behind. 

This is why the next ten years are so important. Goals and promises can only do so much. The success or failure of the transition will depend on how grid reforms are implemented, how states are financially supported during the phase-out of coal, and how communities are involved in decision-making. It also means realising that a one-size-fits-all approach won't work. 

Some states will go first, and others will follow. The central government will help and coordinate. The story of India’s energy transition is important to people all over the world, not just in India. New Delhi is one of the biggest energy users in the world, so its policies will affect climate diplomacy, investment flows, and emissions patterns globally. India would not only be part of the global climate order if it really changed, but it would also help shape it.

These crossroads demand a clear choice. India can opt for incremental change, relying on market forces, or embrace bold policy action now to forge a clean, resilient, and inclusive energy economy. More than just technical progress, India's transition defines the development narrative it will present to the world over the next century. The central issue remains how to balance growth ambitions with urgent decarbonisation.