FDI Inflow into India’s Renewable Energy Sector

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.