India is at a crossroads as it strives to transition its energy systems amid growing concerns over geopolitical vulnerabilities and import dependencies, particularly on China for key minerals and technologies necessary for renewable energy expansion. According to the Economic Survey for FY25, this ambitious shift must tread carefully to avoid deepening reliance on external sources for energy imports.
Chief Economic Advisor V. Anantha Nageswaran, who presented the survey, underscored the strategic importance of being mindful of these geopolitics as India embarks on its clean energy ambitions. With the supply chain for key materials like lithium, cobalt, and rare earth metals predominantly controlled by China, India faces significant challenges to energy security. “Energy transition plans must be mindful of geopolitical vulnerabilities and avoid deepening India’s dependence on external sources for these imports. Strategic thinking is warranted,” Nageswaran highlighted.
The survey pointed out India’s ranking as one of the fastest-growing renewable energy markets, yet it lacks the domestic reserves of key minerals required for solar photovoltaic (PV) modules, battery storage, and electric vehicle (EV) production. Despite launching the ₹34,400 crore National Critical Minerals Mission, aimed at enhancing domestic mineral mining capabilities, the nation still grapples with supply chain limitations, especially as global demand for these minerals escalates sharply. “There is no valid economic rationale for shutting down coal plants in India,” warned Nageswaran, stressing the need for strategic use of coal as India does not have the same access to natural gas reserves as the United States and European countries.
India’s energy transition is also framed within the broader objective of achieving 500 GW of non-fossil capacity by 2030, aligned with its Nationally Determined Contributions (NDCs) under the Paris Agreement. Yet, the report flags notable challenges such as grid stability, battery storage solutions, land allocation, and the need for substantial investments to develop smart transmission networks for large-scale renewable integration. The enhanced focus on coal deployment serves as both guidance and caution when many global players are transitioning away from fossil fuels.
The Economic Survey’s discussion on India’s energy strategy emphasizes adaptation over mere emission mitigation. Nageswaran pointed to the “impossible trinity” of net zero, fiscal sustainability, and economic competitiveness, arguing for varying strategies, including nuclear power, to solidify India’s energy future. The focus on renewable energy must be complemented with transition fuels like natural gas alongside coal, which still serves as India’s reliable energy source.
This complex reality is coupled with India’s precarious dependence on solar and wind power, which is still inadequate to meet vast energy demands without improvement to battery storage technologies and infrastructure. “Lessons learnt from the experiences of developed economies caution against shutting down thermal energy without adequate technological alternatives for stable energy supply,” the report reminds us.
Highlighting the geopolitical role of China, the survey discussed India’s urgent need to reduce dependence on imports for green energy infrastructure. Approximately 80-90% of solar energy modules and components for EVs are currently manufactured there. The survey reported, “The road to energy transition runs through China,” emphasizing the necessity for India to build domestic capacity for manufacturing, particularly for key components such as silicon, wafers, and lithium-ion batteries.
The challenges posed by coal’s continued prominence within India’s energy mix were addressed as well, indicating the need for efficient coal utilization techniques. While Western nations integrate more renewable sources, they are also shifting from coal to natural gas, something India cannot afford due to its limited natural gas reserves. This paradigm prompts questions about the sustainability and effectiveness of India’s current energy policies.
Nageswaran advocated for public transport solutions as one of the major pathways moving forward. With no adequate local resources for the EV industry and the growing demand for electric vehicles, public transport infrastructure development appears necessary. “National-level policies must promote public transport rather than focusing solely on tailpipe emissions of private transportation,” he stated, advocating for prioritized metro connectivity along with bus and rail networks.
The comprehensive appraisal of India’s energy transition emphasizes the urgent need for technological innovation combined with strategic geopolitical awareness. The Economic Survey reiterates the complex interplay of global demand, domestic resource capabilities, and technological adaptation, leading India’s energy transition efforts forging steadily forward.
With energy security and environmental sustainability at stake, India’s commitment to balancing traditional energy sources, transitioning to renewables, and diminishing reliance on foreign imports will play a defining role as it prepares for future energy needs and global climate commitments.