Will Robust Infrastructure Demand Drive Investment Growth in India?
Click to start listening
Synopsis
India's ambitious goal for net-zero emissions by 2070 hinges on massive investments, particularly in the power sector. Moody's emphasizes the need for a balanced approach to energy security and affordability, highlighting the critical role of the private sector and emerging data centers in this transformative journey.
Key Takeaways
- India's net-zero goal by 2070 requires significant investments.
- Transitioning to renewable energy is essential for reducing carbon emissions.
- The private sector will play an active role in this energy shift.
- Data centers are emerging as a key area for infrastructure investment.
- Government initiatives like Maritime India Vision 2030 aim to enhance infrastructure.
Mumbai, June 4 (NationPress) To fulfill its ambitious net-zero commitment by 2070, India will require substantial investments, as per Moody's Ratings report released on Wednesday. Balancing energy security, affordability, and transition will be vital in this journey.
To meet this target, significant financial resources will be essential, particularly in the power sector, a major contributor to the nation’s carbon emissions.
Over the coming decade, these investments are anticipated to represent 2% of real GDP for the electricity value chain, which includes power generation, storage, transmission, and distribution, according to the report.
The government’s strategy to achieve net-zero emissions by 2070 will rely on transitioning the fuel mix from the current reliance on coal-fired power to cleaner and renewable energy sources.
Nevertheless, India’s robust economic growth suggests an increase in coal-based power generation capacity by 32-35% (approximately 70GW-75GW) over the next 10 years, alongside the addition of around 450GW of renewable energy during the same timeframe.
“We foresee the private sector remaining active in India’s renewable energy domain, with government-owned enterprises also playing a significant role,” noted Abhishek Tyagi, a Moody’s Vice President and Senior Credit Officer.
Solar and wind power are set to lead new capacity additions over the next 20-25 years, complemented by smaller increments in nuclear and hydropower.
To address the funding gap for energy transition-related infrastructure, securing diverse capital sources, including foreign investments (both debt and equity), will be essential.
In parallel, the government has outlined substantial capital expenditure under its ‘Maritime India Vision 2030’ to enhance port capacity and infrastructure in the upcoming years.
Moody’s Indian affiliate ICRA projects a 3-5% increase in cargo volumes for FY26, primarily driven by growth in the container, petroleum products, and fertilizer sectors.
Moreover, beyond traditional segments like transportation and energy, the data center segment is emerging as a key area for infrastructure investment.
ICRA anticipates a robust investment pipeline of Rs 1.6-1.8 trillion in data center capacity expansion over the next 5-6 years in India, propelled by rapid digitalization and favorable policy initiatives.
Point of View
I firmly believe that India's sustainable energy transition is pivotal for its future. The government's initiatives, coupled with private sector engagement, are essential for achieving net-zero by 2070. We must embrace innovation and collaboration in the energy sector, ensuring a balanced approach that fosters economic growth while addressing climate change.
NationPress
08/06/2025
Frequently Asked Questions
What is India's net-zero emissions target?
India aims to achieve net-zero emissions by 2070, necessitating massive investments in renewable energy and infrastructure.
How much investment is needed in the power sector?
Investments in the power sector are projected to represent 2% of India's real GDP over the next decade.
What role will the private sector play?
The private sector is expected to play a crucial role in expanding India's renewable energy capacity alongside government initiatives.
What is the Maritime India Vision 2030?
It's a government initiative aimed at enhancing port capacity and infrastructure over the coming years.
What is driving the growth of data centers in India?
Rapid digitalization and favorable policies are leading to significant investments in data center capacity in India.
