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India’s Clean Energy Sector Sees Record FDI and Growth in FY25

India’s renewable energy sector is witnessing a historic upswing, with foreign direct investment (FDI) surging 8x since FY21—reaching USD 3.4 billion in just the first nine months of FY25, according to the latest CEEW-GFC Market Handbook. The sector now commands nearly 8% of total FDI, up from just 1% five years ago, reflecting growing global confidence in India’s energy transition.

FY25 also marked a sharp uptick in renewable generation, with renewables and hydro contributing 21% of India’s average daily electricity supply—a 50% year-on-year increase in RE capacity addition.

The energy storage segment gained traction with 16 standalone storage tenders announced and 7 concluded, and the lowest discovered tariff plummeting to INR 1.84/kWh, a 54% drop from FY24. This positions storage as a viable and competitive pillar in India’s clean energy mix.

Meanwhile, India’s electric vehicle (EV) market continues its upward trajectory, with 1.9 million EVs sold in FY25, a 17% rise, bolstered by policy support from the PM E-DRIVE scheme.

While the growth is promising, experts emphasize the need for continued policy clarity and financing mechanisms to sustain and scale India’s clean energy momentum.