Energy efficiency is increasingly becoming a core business concern for industrial organisations in India, shifting beyond cost management to a broader issue of profitability and risk, according to a new report released by ABB.

The report, based on a survey of 2,700 senior decision-makers across 15 countries and industries, indicates strong intent among Indian firms to invest in energy efficiency. Nearly 64 percent of respondents said they have already made investments, while another 32 percent plan to do so within the next 12 months.

Despite this momentum, the findings highlight a widening gap between ambition and execution.

Rising Energy Costs Continue to Pressure Profitability

Energy costs remain a significant burden for businesses in India, accounting for an average of 28 percent of operating expenses. More than 72 percent of surveyed companies reported that rising energy costs continue to challenge profitability, a figure notably higher than the global average of 59 percent.

The report suggests that the issue is no longer limited to short-term price spikes. Instead, companies are grappling with persistent price volatility and structural exposure to energy costs, making long-term management strategies more critical.

“In India, the conversation around energy efficiency has matured from only a cost-saving tactic to a critical pillar of long-term business strategy. The next wave of competitive advantage will be defined by those who can bridge the ‘execution’ gap, turning data into actionable insights and embedding energy efficiency into the operational DNA of their organization.” explained Amit Gupta, Local Division President, Motion Services in India, ABB.

“It’s no longer just about adopting technology; it’s about building a culture of sustained, scalable execution to enhance profitability and resilience in a volatile market,” he added.

Execution, Not Intent, Identified as Key Challenge

While digital readiness in India stands at 80 percent – well above the global average of 67 percent – the report notes that readiness has not translated into consistent outcomes.

Only 41 percent of companies in India regularly apply total cost of ownership (TCO) principles in investment decisions, even though 80 percent agree that it should guide procurement strategies.

Additionally, responsibility for energy efficiency initiatives remains fragmented across multiple functions, including operations, sustainability, maintenance, finance, and executive leadership, with no clear ownership.

“The barriers to energy efficiency have fundamentally changed,” added Amit. “Cost is not the major blocker for many organizations globally – it has fallen from half (50%) to 43 percent since 2022. What’s holding companies back now are organizational silos, skills gaps, and a lack of usable data. That’s a critical inflection point. The challenge is helping businesses turn intent into repeatable execution.”

In India, the key barriers identified include workforce resistance to new technologies (42 percent), lack of specialist resources (42 percent), and insufficient digital skills (41 percent).

Risk of ‘Post-Renewables Complacency’

The report also highlights a growing concern around what it terms “post-renewables complacency.” Among Indian organisations that have adopted renewable energy sources—representing 42 percent of respondents—around 36 percent reported a reduced focus on energy efficiency.

While renewable energy adoption helps reduce carbon intensity, it does not lower overall energy consumption. As a result, companies may be missing opportunities to improve efficiency, manage long-term costs, and reduce exposure to market volatility.

When asked about their primary motivations for investing in energy efficiency, respondents cited reducing energy costs (53 percent), lowering carbon emissions (43 percent), and improving resilience and competitiveness (40 percent).

The findings suggest that while activity levels remain high, energy efficiency initiatives often lack depth, coordination, and long-term structure.