India Is Hitting Its Clean-Power Targets Years Early, but Coal, EVs and Data Centres Will Decide the Next Phase, BloombergNEF Says

India is meeting its headline clean-energy targets years ahead of schedule, but the hardest parts of its energy transition still lie ahead, according to a new report from BloombergNEF.

The India Transition Factbook 2026, published on October 13 and commissioned by Bloomberg Philanthropies, gives one of the most comprehensive data-driven snapshots of where the world's most populous country stands on decarbonisation. It shows a nation that has become a global heavyweight in renewable energy deployment while still relying on coal for most of its electricity, with fast-rising demand from industry, transport and digital infrastructure.

The report's central message is that India's dual goals of expanding clean energy and cutting dependence on imported fossil fuels are increasingly aligned and economically viable.

Targets met ahead of time

The most striking finding concerns installed capacity. The share of non-fossil technologies on India's power grid, measured in capacity terms, crossed 50% in 2025. That is five years ahead of the target India set in its Nationally Determined Contribution under the Paris Agreement in 2022. BNEF projects that share will exceed 60% in 2028, seven years ahead of India's revised commitment.

Over the past decade, non-fossil technologies have accounted for 80% of all new power generation capacity added in the country. India was the world's second-largest market for annual solar and wind capacity additions in 2025, behind only China, and BNEF expects it to remain the second-largest solar market for the foreseeable future.

Investment has followed. Energy-transition investment in India reached $72 billion in 2025, about 1.7% of GDP, making the country the fifth-largest market for such investment globally. The wind and solar sectors alone will need between $123 billion and $163 billion of capital, in real 2025 dollars, through 2030.

Coal is still king

Capacity, however, is not the same as generation. Because solar and wind plants produce electricity only when the sun shines or the wind blows, their share of actual output is lower than their share of installed capacity. According to the report, non-fossil sources supplied about one-third of India's electricity demand in the first seven months of 2026. Coal still provides the majority, at roughly 68% of the country's electricity.

That gap explains much of the challenge ahead. India's power demand is growing quickly, and clean-energy additions must outpace that growth for coal's share to fall meaningfully. Transmission is a key constraint. India is the fourth-largest market for grid investment, and plans to build enough transmission by the first quarter of 2032 to connect 336 GW of renewable capacity, roughly twice the size of the UK's existing grid capacity. Delivering that build-out on time will be essential to avoid stranded solar and wind capacity.

Emissions and energy security

On emissions, the report offers cautious optimism. India's revised NDC targets a 47% reduction in the emissions intensity of its GDP by 2035, compared with 2005 levels. BNEF says that goal is achievable under its base-case scenario.

The energy-security argument may prove even more persuasive for policymakers. In BNEF's economics-led scenario, which assumes no new supportive policies, India's spending on energy imports falls from 5.3% of GDP in 2025 to 3.1% in 2035, and to 1.5% by mid-century. For a country that imports most of its oil and has recently seen crude prices above $100 a barrel, that is a powerful economic case for accelerating the transition.

Hydrogen ambitions bear fruit

One area where India is outperforming global peers is clean hydrogen. Indian companies signed binding contracts in the first four months of 2026 to supply 0.3 million metric tons of clean hydrogen a year, including volumes exported as green ammonia. That was more than companies in any other country, and it lifted India to third place globally for cumulative contracted volumes. Three major binding offtake agreements would together export more than 1 million metric tons a year.

Binding offtake contracts are the critical step that turns hydrogen announcements into financeable projects. Many proposed hydrogen schemes worldwide have stalled for lack of committed buyers, so India's success in signing them suggests its low-cost renewable power is giving it a real competitive edge in the emerging trade in green molecules.

EVs fall short

The picture for electric vehicles is less encouraging. EV sales are rising, but BNEF expects India to miss most of its 2030 targets. The government aims for electric vehicles to account for 80% of two- and three-wheeler sales, 70% of commercial vehicles and 30% of private cars by the end of the decade. Of these, only the three-wheeler segment looks on track, according to the report.

There is a potential silver lining. Higher fuel costs linked to the conflict in the Persian Gulf could improve the economics of electric vehicles relative to petrol and diesel, speeding adoption beyond current expectations. Even so, closing the gap on targets will likely require stronger policy support, better charging infrastructure and more affordable models.

The data centre wildcard

One of the report's most forward-looking findings concerns data centres. As India builds out its digital and artificial intelligence infrastructure, electricity demand from data centres could rise from 11 terawatt-hours in 2025 to 636 terawatt-hours by 2050, roughly 11% of the country's total electricity consumption by then.

That growth will present both a risk and an opportunity. If met with coal, it would significantly increase emissions. If met with clean power, it could anchor large new renewable projects. BNEF notes that data centre operators have several options to reduce their carbon exposure, including third-party renewable contracts, captive and group-captive projects, onsite solar and purchases on power exchanges.

The road ahead

Taken together, the findings portray a transition at an inflection point. India has shown it can deploy renewable capacity at enormous scale and attract tens of billions of dollars of investment a year. It has met capacity targets early and established itself as a leader in clean hydrogen contracting.

The next phase is about depth rather than breadth: displacing coal in actual generation, building the grid to carry clean power across the country, accelerating the electrification of transport and making sure surging new demand from industry and data centres is met with clean energy. How India handles these challenges will matter far beyond its borders. With one in six people on Earth and some of the fastest-growing energy demand of any major economy, India's choices will help determine the trajectory of global emissions for decades to come.