FDI in India’s Renewable Sector Hits New High in 2024 - News

India’s renewable energy sector has recorded a 50 percent year-on-year increase in Foreign Direct Investment (FDI) in FY 2023-24 which stood at US$ 3.76 billion. The cumulative FDI in the sector up from FY 2010-11 and FY 2023-24 was just above US$ 17 billion. 

In India, up to 100 percent FDI in the renewable sector is possible through the automatic route without requiring prior government approval. Remarkably, no FDI has been registered in the production of coal since FY 2013-14 implying a change in trend towards the production of cleaner energy sources. On the other hand, FDI in petroleum and natural gas declined to US$ 32.57 million in FY 2023-24 down by 81 percent in comparison to the previous year. However, FDI in the power sector soared to US$ 1.7 billion—marking a remarkable 144 percent year-on-year growth.

According to the sector specialists, over the next 5-6 years, India needs to add at least 50 GW of renewable capacity, for which it is necessary to attract US$ 10.7-11. 9 billion in equity annually. Owing to the government support and good economic environment, the renewable sector has become one of the leaders in attracting investments as India is nearing its net-zero plans. It is anticipated that the sector will be contributing over US$ 1 trillion by 2030, with FDI playing a major role in achieving this.