India's Renewable Energy Policies Offer Model for Emerging Markets: Global Report

India's renewable energy expansion has been supported by policies aimed at reducing investment risks, including long-term capacity targets, subsidies and measures to improve access to land and transmission infrastructure, noted a global report.

This helped build investor confidence in its renewable energy sector, and it could offer a template for emerging economies seeking to attract capital into solar and wind power, Zero Carbon Analytics, a Brussels-based non-profit, said in its new report.

India’s case

India has set a target of 500 gigawatts of non-fossil fuel capacity by 2030 and met its goal of deriving 50% of installed electricity capacity from non-fossil sources five years ahead of schedule, the report said. The government is now targeting a 60% non-fossil share by 2035.

Annual bidding plans for 50 GW of renewable energy capacity through the financial year 2028 provide developers with greater visibility on future projects, while designated renewable energy parks offer access to land and transmission infrastructure.

The government also allows up to 100% foreign direct investment in the electricity sector and provides subsidies for project development and shared infrastructure. Rules introduced in 2022 to curb delayed payments by electricity distribution companies have helped reduce arrears owed to power generators, the report said.

Outstanding dues fell to 410.9 billion rupees ($4.33 billion) in February 2026, from 1.4 trillion rupees in 2022, according to the report.

Solar and wind capacity in India has grown by an average of more than 20% annually since 2020, with solar capacity rising from 0.09 GW in 2010 to more than 190 GW in 2025, based on data from energy research firm Rystad.

Global investment risks may be overstated

The report's broader findings challenge perceptions that investing in emerging markets carries prohibitively high credit risks.

Data from the Global Emerging Markets Risk Database showed that loans by multilateral development banks and development finance institutions to private companies in emerging markets between 2006 and 2025 carried an average lending spread of 3.77%, compared with realised losses of 0.9%.

The difference suggests investors may be charging a substantial premium for risks that do not always materialise, the report said.

Capital expenditure on solar and onshore wind projects in emerging and developing economies could reach $356 billion by 2040 if current trends continue, the report said, citing Rystad data.

However, India’s model relies heavily on domestic financing, while countries such as Egypt, Nigeria and Senegal depend more on multilateral and development finance institutions.

The report said governments could help unlock investment by improving regulatory certainty, ensuring reliable grid connections and establishing predictable power purchase agreements, while development finance institutions could help reduce risks for private investors.