India’s state-owned energy companies could significantly strengthen the country’s energy security by redirecting INR 2 trillion annually (around $21 billion) from fossil fuel investment towards clean energy projects, the International Institute for Sustainable Development (IISD) has said.
The IISD examined the capital expenditure plans of nine major public sector energy companies across India, and found that in the 2025 fiscal year, said firms invested INR 2.6 trillion across both fossil fuels and clean energy – around INR 2.3 trillion to the former, and INR 0.3 trillion to the latter.
By tilting this investment mix in favour of clean energy, India would be able to ‘bridge the gap’ between short term capex planning and India’s long-term net-zero ambitions, as well as aligning with the growing role of renewables and electrification in global energy security, it noted.
‘Progressively rebalanced’
“While a significant share of public sector undertakings’ (PSUs) current fossil fuel capex is tied to ongoing projects, new and incremental investments can be progressively rebalanced toward clean energy,” commented Deepak Sharma, a consultant at the International Institute for Sustainable Development.
“By prioritising firm and dispatchable renewables, storage, critical minerals, and electrification, India’s state energy firms can reduce exposure to volatile global fuel markets while cutting emissions and strengthening long-term energy security.”
The nine firms assessed in the research generated some INR 26 trillion in revenues during full-year 2025, equating to nearly 8% of India’s GDP. This highlights the scale at which said firms have the potential to shape the country’s energy future.
The companies also contributed close to INR 6 trillion to governments through taxes and dividends.
Eight of the nine firms in the study account for around 11% of India’a greenhouse gas emissions on a Scope 1 basis – i.e. direct emissions from their own operations. If Scope 3 emissions from these facilities are included, their combined share rises to nearly 44%.
‘Strategic advantage’
“India’s public ownership of the energy system gives it a rare strategic advantage in managing this carbon interdependence,” Sharma added.
“With aligned mandates, common ownership, and coordinated planning, PSUs can move together—redirecting capital, managing risks, and accelerating emissions reductions at a system level. How effectively the government mobilises this collective potential will be decisive for India’s low‑carbon transition.” Read more here.
