India’s RE Sector Saw FDI Equity Investment of USD 6,137.39 Mn in Last 3 Financial Years

India's Renewable Energy Sector Attracted FDI Equity Investment of USD 6,137.39 Mn in Last Three Financial Years

The Minister for New & Renewable Energy and Power, R.K. Singh, disclosed measures taken to entice Foreign Direct Investment (FDI) into India’s renewable energy sector. Currently, India’s FDI policy permits up to 100% investment in the renewable energy sector through the automatic route.

According to the Department for Promotion of Industry and Internal Trade (DPIIT), the renewable energy sector received a total FDI Equity investment of USD 6,137.39 Million in the last three financial years and the ongoing financial year until September 30, 2023. This update was provided by Union Minister R. K. Singh in a written response to a question in the Rajya Sabha on December 19, 2023.

The government has implemented various initiatives to attract investments, including FDI, into renewable energy. Some key steps include:

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• Establishment of a Project Development Cell to allure and facilitate investments.
• Declaration of Renewable Purchase Obligation (RPO) trajectory until 2029-30.
• Creation of Ultra Mega Renewable Energy Parks offering land and transmission facilities to developers for large-scale renewable energy projects.
• Expansion of transmission lines and sub-station capacity under the Green Energy Corridor Scheme for efficient evacuation of renewable power.
• Rollout of schemes like Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM), Solar Rooftop Phase-II, 1200 MW CPSU Scheme Phase II, etc.
• Launch of the National Green Hydrogen Mission aiming to position India as a global hub for green hydrogen production, utilization, and export.
• Notification of Promoting Renewable Energy through Green Energy Open Access Rules 2022.
• Introduction of the Green Term Ahead Market (GTAM) facilitating the sale of Renewable Energy Power through exchanges.
• Issuance of Standard Bidding Guidelines for tariff-based competitive bidding in procuring power from Grid Connected Solar PV and Wind Projects.
• Waiver of Inter State Transmission System (ISTS) charges for interstate sale of solar and wind power for projects to be operational by June 30, 2025.
• Implementation of standards for deploying solar photovoltaic systems/devices.
• Directive for power dispatch against Letter of Credit (LC) or advance payment, ensuring timely payments by distribution licensees to renewable energy generators.

As per the Ministry of Commerce and Industry, the FDI in India’s renewable energy sector was pegged at at $251 million in Q3 of FY2023. Singapore, Mauritius, the Netherlands, and Japan are among the most prominent investors in the renewable energy sector of the country.