CASE STUDY: INDIA

This case study examines India's fiscal and economic dependence on fossil fuels, detailing government revenues, subsidies, and the risks of asset stranding. It outlines the role of state-owned enterprises in the energy sector and the tension between India's renewable energy targets and its projected continued reliance on coal through 2040.

• India's energy system is heavily reliant on fossil fuels, which provided 75 per cent of the total energy supply in 2017. The country is a major global player in fossil fuels, ranking as the world's sixth largest coal producer, 22nd largest oil producer, and 28th largest gas producer in 2018.
• Fossil fuel production and consumption are significant contributors to government finances. In 2017, taxes, duties, and fees from this sector generated 17.8 per cent of general government revenue, with production revenues accounting for 11.3 per cent and consumption revenues accounting for 6.5 per cent.
• State-owned enterprises (SOEs) dominate the fossil fuel landscape. Coal India Limited (CIL) is 71 per cent government owned and accounted for 84 per cent of total coal production in 2016. The Oil and Natural Gas Corporation (ONGC) is 63 per cent government owned and provided approximately 61.5 per cent of total oil output.
• India faces significant risks of asset stranding in its power sector. As of the end of 2018, approximately 40 GW of coal-fired power plant capacity—about 21 per cent of total installed capacity—was identified as "non-performing." Additionally, 25 GW of gas-fired power capacity is largely stranded, operating at average utilization rates of only 23 per cent.
• There is a contradiction between India's climate commitments and its energy projections. While India committed to 450 GW of renewable energy capacity at the 2019 UN Climate Action Summit, the National Energy Policy 2017 suggests coal-based power generation capacity could increase to between 330 and 441 GW by 2040.
• The Indian government provides substantial fossil fuel subsidies. OECD estimates of budgetary transfers and tax expenditures amount to 0.4 per cent of GDP (2 per cent of general government revenue), while IEA estimates of subsidies via regulated prices are 0.5 per cent of GDP (2.6 per cent of general government revenue).
• The International Monetary Fund (IMF) estimates that India significantly undertaxes fossil fuel consumption. In 2017, the value of this undertaxation was estimated at USD 88 billion regarding climate change effects and USD 127 billion regarding air pollution impacts, totaling roughly 45 per cent of general government revenue.

APA

Garg, V., & Geddes, A. (2019). CASE STUDY: INDIA. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/beyond-fossil-fuels-india.pdf

Chicago

Garg, Vibhuti, and Anna Geddes. CASE STUDY: INDIA. International Institute for Sustainable Development, 2019. https://www.iisd.org/system/files/publications/beyond-fossil-fuels-india.pdf.

Wikipedia

{{cite report |last1=Garg |first1=Vibhuti |last2=Geddes |first2=Anna |title=CASE STUDY: INDIA |publisher=International Institute for Sustainable Development |date=November 2019 |url=https://www.iisd.org/system/files/publications/beyond-fossil-fuels-india.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{garg2019case, author = {Garg, Vibhuti and Geddes, Anna}, title = {{CASE STUDY: INDIA}}, institution = {International Institute for Sustainable Development}, year = {2019}, month = nov, url = {https://www.iisd.org/system/files/publications/beyond-fossil-fuels-india.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }