FDI Inflow into India’s Renewable Energy Sector


Between April 2020 and September 2023, the renewable energy sector in India attracted FDI equity investments totaling $6.1 billion.


GS-03 (Economy)

Key Highlights:

FDI Policy Framework:

  • Current GOI FDI policy permits up to 100% FDI in the renewable energy sector under the automatic route.

Government Initiatives to Attract FDI:

  • Establishment of a Project Development Cell dedicated to attracting and facilitating investments.
  • Declaration of a trajectory for Renewable Purchase Obligation (RPO) until 2029-30.
  • Creation of Ultra Mega Renewable Energy Parks to provide land and transmission infrastructure for large-scale RE projects.
  • Expansion of transmission lines and sub-station capacity under the Green Energy Corridor Scheme for efficient evacuation of renewable power.

Key Schemes Launched:

  • Initiatives like Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), Solar Rooftop Phase-II, and 1200 MW CPSU Scheme Phase II have been introduced.

National Green Hydrogen Mission:

  • Notification of rules promoting renewable energy through the Green Energy Open Access Rules 2022.
  • Introduction of the Green Term Ahead Market (GTAM) to facilitate the sale of renewable energy power through exchanges.

Standard Guidelines and Waivers:

  • Release of Standard Bidding Guidelines for tariff-based competitive bidding processes in solar PV and wind projects.
  • Waiver of Inter-State Transmission System (ISTS) charges for the inter-state sale of solar and wind power projects commissioned by June 30, 2025.

Quality Standards and Payment Assurance:

  • Notification of standards for the deployment of solar photovoltaic systems/devices.
  • Implementation of measures ensuring timely payment to RE generators, including power dispatch against Letter of Credit (LC) or advance payment by distribution licensees.