India needs $2 Trillion to meet 2070 net-zero goal

India’s road to net-zero emissions by 2070 hinges on massive investments in clean energy, while still balancing economic growth and energy security. A new report by Moody’s and ICRA outlines the scale of investment needed—particularly in the power sector and highlights both the challenges and emerging opportunities across infrastructure, coal, renewables, ports, and data centers.

India faces a significant challenge in achieving its 2070 net-zero emissions target, necessitating substantial investments, particularly in the power sector. According to a joint report by Moody’s Ratings and ICRA, the country will need to allocate approximately 2% of its real GDP annually over the next decade to the electricity value chain, which includes power generation, storage, transmission, and distribution.

While renewable energy is set to play a pivotal role, India’s rapidly growing economy will continue to depend on coal in the short to medium term. The report projects a 32–35% increase in coal-based generation capacity, amounting to about 70–75 GW over the next 10 years. Simultaneously, an addition of approximately 450 GW in renewable capacity is planned.

Abhishek Tyagi, a Moody’s Vice President and Senior Credit Officer, emphasized that solar and wind power will dominate new generation capacity additions over the next 20–25 years, with smaller contributions from nuclear and hydropower. He also noted that while the private sector is expected to remain active in India’s renewable energy sector, government-owned companies will increasingly play a significant role.

Despite these ambitious plans, India’s renewable energy sector faces challenges. In 2024, renewables supplied only 24% of the country’s electricity, primarily due to integration and grid challenges. To meet the growing energy demand, which is projected to triple by 2050, India must expand its infrastructure and storage capabilities.

In addition to the power sector, the report highlights a potential slowdown in road project execution in the near term, despite a healthy FY2026 budgetary outlay of Rs 2.72 trillion for the Ministry of Roads, Transport, and Highways (MoRTH). With road awarding projected to improve only in the second half of FY2026, revenue growth for road developers is likely to remain subdued over the next 12–15 months, as it typically takes 6–9 months from project awarding to on-ground execution.

Conversely, ports and data centers are emerging as key growth areas. Under the Maritime India Vision 2030, the government has committed substantial capital expenditure to expand port capacity. ICRA anticipates a 3–5% increase in cargo volumes in FY2026, led by containerized cargo, petroleum products, and fertilizers, though global trade and tariff uncertainties pose risks.

Overall, India’s path to achieving its net-zero target by 2070 will require a delicate balance between energy security, affordability, and the transition to cleaner sources. Substantial investments, supportive policies, and active participation from both the private and public sectors will be crucial in navigating this complex journey.