Mapping India’s Energy Policy 2025

The report finds that while India has achieved its non-fossil electricity capacity target of 50% by 2025, government support for fossil fuels remains five times larger than for clean energy. Total government support to energy in FY 2024 was at least INR 6.3 lakh crore (USD 75 billion), with a significant portion shifting from direct subsidies to investments by state-owned enterprises (SOEs) and public financial institutions (PFIs). The analysis highlights a critical fiscal reliance on fossil fuel revenues, which account for 90% of energy revenues, and a growing burden of electricity subsidies for end consumers that constrains fiscal space for clean energy. The report recommends transitioning to targeted direct benefit transfers for electricity, phasing out fossil fuel production subsidies, and implementing a strategic roadmap for aligning public finance with net-zero goals by 2047.

• Total government support for the energy sector in FY 2024 was at least INR 6.3 lakh crore (USD 75 billion), representing a 15% increase over the previous year.
• Government support for fossil fuels in FY 2024 was five times the size of support for clean energy, the lowest ratio in five years.
• Energy subsidies in FY 2024 totaled INR 3,57,844 crore (USD 43 billion), with 59% of these being electricity subsidies provided by state governments to end consumers, which reached an all-time high of INR 2,10,784 crore (USD 25 billion).
• Public financial flows are shifting toward state actors; in FY 2024, SOE investments in energy were at least INR 2,73,262 crore (USD 32 billion), and PFI loan disbursements reached INR 3,14,207 crore (USD 38 billion).
• India's energy revenues are heavily dependent on fossil fuels, which provided nearly INR 9 lakh crore (USD 108 billion) in FY 2024, accounting for 90% of total energy revenues.
• The social and environmental externalities of fossil fuels in FY 2024 outweighed the revenues they generated by at least three times.
• Coal remains dominant, with government support in FY 2024 totaling at least INR 71,807 crore (USD 8.6 billion), including INR 47,397 crore in subsidies and INR 24,410 crore in central PSU CapEx.
• Clean energy subsidies increased by 31% over FY 2023 to reach INR 31,967 crore (USD 3.9 billion) in FY 2024, though they represent only 9% of all energy subsidies.
• Government support for electric vehicles (EVs) rose by 51% in FY 2024 to INR 15,386 crore (USD 1.85 billion), driven largely by concessional GST, which accounted for 71% of all EV incentives.
• The report identifies significant transmission bottlenecks, noting that as of June 2025, 50 GW of renewable energy capacity remains unutilized due to inadequate infrastructure.

APA

Raizada, S., Jain, S., Sekar, G. P. C., Sharma, D., Sharma, S., Saluja, S., & Dixit, G. M. (2025). Mapping India’s Energy Policy 2025. International Institute for Sustainable Development. https://www.iisd.org/system/files/2025-12/mapping-india-energy-policy-2025.pdf

Chicago

Raizada, Swasti, Saumya Jain, Godwin Paul Chandra Sekar, Deepak Sharma, Shruti Sharma, Sonakshi Saluja, and Gayatri Milind Dixit. Mapping India’s Energy Policy 2025. International Institute for Sustainable Development, 2025. https://www.iisd.org/system/files/2025-12/mapping-india-energy-policy-2025.pdf.

Wikipedia

{{cite report |last1=Raizada |first1=Swasti |last2=Jain |first2=Saumya |last3=Sekar |first3=Godwin Paul Chandra |last4=Sharma |first4=Deepak |last5=Sharma |first5=Shruti |last6=Saluja |first6=Sonakshi |last7=Dixit |first7=Gayatri Milind |title=Mapping India’s Energy Policy 2025 |publisher=International Institute for Sustainable Development |date=December 2025 |url=https://www.iisd.org/system/files/2025-12/mapping-india-energy-policy-2025.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{raizada2025mapping, author = {Raizada, Swasti and Jain, Saumya and Sekar, Godwin Paul Chandra and Sharma, Deepak and Sharma, Shruti and Saluja, Sonakshi and Dixit, Gayatri Milind}, title = {{Mapping India’s Energy Policy 2025}}, institution = {International Institute for Sustainable Development}, year = {2025}, month = dec, url = {https://www.iisd.org/system/files/2025-12/mapping-india-energy-policy-2025.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }