India is pursuing the twin goals of becoming a US$ 30 trillion developed economy by 2047 and achieving net zero emissions by 2070, calling for a fundamentally new low-carbon growth model. A Niti Aayog study estimates that the transition will require US$ 22.7 trillion in investments, or nearly US$ 500 billion annually—well above current levels.
Clean energy, electrification and renewables will anchor decarbonisation, with the power sector alone needing about US$ 5 trillion. Despite mobilising domestic and foreign capital, a US$ 6.53 trillion funding gap persists, expected to be largely filled by international finance. Notably, the study finds the net zero transition will have minimal long-term impact on GDP growth.
India’s aspiration to become a US$ 30 trillion developed economy by 2047 under the Viksit Bharat vision is not merely a scale ambition—it is a structural transformation challenge. Historically, every major economic power—from the US to China—has industrialised on the back of cheap fossil energy, using carbon-intensive manufacturing to accelerate productivity, urbanisation, and income growth. India, however, is attempting to compress this multi-decade development cycle into a shorter time frame while simultaneously decarbonising its growth pathways.
This creates a dual imperative. India must raise hundreds of millions into higher income brackets while also committing to net zero emissions by 2070—despite having significantly lower per capita emissions than developed economies. These twin objectives are deeply interconnected and require India to craft a new model of growth—one that has not been attempted before at this scale. Achieving net zero will demand the large-scale deployment of clean energy technologies such as solar and wind power, electric vehicles, battery energy storage systems, green hydrogen, and carbon capture, utilisation and storage, many of which are still evolving and not yet fully mature.
India will need to mobilise investments worth about US$ 22.7 trillion to cut greenhouse gas emissions and achieve its net zero target by 2070, according to a recent study by Niti Aayog. The study, titled “Scenarios Towards Viksit Bharat and Net Zero: An Overview”, outlines the scale of capital required and the financing challenges involved in India’s long-term climate transition.
On an annual basis, the cumulative investment requirement translates into average flows of nearly US$ 500 billion per year, significantly higher than the country’s current annual investment of around US$ 135 billion in 2024. Of this, only US$ 70-80 billion is presently directed towards clean energy and low-carbon sectors.
The report notes that nearly US$8 trillion of the total investment must be front-loaded by 2050, reflecting the capital-intensive nature of low-carbon technologies. Within this, the power sector alone will require close to US$5 trillion, as it forms the backbone of decarbonisation through electrification and renewable energy expansion.
The study evaluates India’s transition under two scenarios: the Current Policy Scenario and the Net Zero Scenario. The Current Policy Scenario assumes continuation of policies and trends in place as of 2023, based on historical deployment of low-carbon technologies. Under this pathway, total investment requirements are estimated at US$ 14.7 trillion.
In contrast, the Net Zero Scenario represents an ambitious pathway aligned with India’s official climate commitment. It incorporates both existing and additional policy measures aimed at accelerating electrification demand, improving energy efficiency, promoting circular economy practices, encouraging behavioural shifts, and rapidly scaling low-carbon technologies and fuels.
According to the study, with coordinated domestic reforms and supportive external conditions, India could credibly mobilise around US$ 16.2 trillion towards its net zero transition by 2070. Domestically, this would require deepening the corporate bond market, increasing the financialisation of household savings, and enabling institutional investors to participate in new asset classes. Ensuring stable returns through diversified, high-quality corporate and green assets will be essential to attract long-term capital.
On the external front, scaling up foreign direct investment (FDI) and foreign portfolio investment (FPI) will play a critical role. This would be supported by credible transition roadmaps, a strong pipeline of bankable projects, and deeper, more liquid financial markets to anchor sustained foreign capital inflows.
Despite these efforts, a financing gap of about US$ 6.53 trillion remains when compared with the Net Zero Scenario requirement of US$ 22.7 trillion. Given domestic constraints and the risks of crowding out private investment or pushing up interest rates, the study expects this gap to be met largely through external sources. As a result, the share of international capital in total financing needs is projected to rise to 42% by 2070, from 17% in 2022–23.
The report underscores that international capital, particularly concessional finance and grants, will be crucial for supporting key net zero technologies that are not yet commercially viable.
Importantly, the study finds that the net zero transition has limited impact on long-term GDP growth, despite the high investment requirements. India’s GDP is projected to remain broadly resilient even under Net Zero scenarios, reaching around US$30 trillion by 2047, in line with the Viksit Bharat vision of becoming a developed economy.
While the transition demands massive capital mobilisation, scenarios with a higher share of foreign financing limit GDP variations to about 0.5% by 2050. This highlights the importance of financing structure, as external capital inflows help ease pressure on domestic savings and prevent crowding out of private investment.
The Niti Aayog study makes clear that India’s net zero ambition hinges on early, capital-intensive investments, especially in the power sector and clean technologies. Success will depend on accelerating policy implementation, stronger domestic financial systems, and scaling global capital partnerships. With the right mix of domestic reforms and international support, India can meet its climate goals without derailing long-term economic growth.
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NITI Aayog releases study reports on scenarios towards Viksit Bharat and Net Zero
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