{"id":83100,"date":"2026-01-26T14:57:09","date_gmt":"2026-01-26T14:57:09","guid":{"rendered":"https:\/\/www.lse.ac.uk\/granthaminstitute\/?post_type=publication&#038;p=83100"},"modified":"2026-03-11T12:12:20","modified_gmt":"2026-03-11T12:12:20","slug":"lessons-from-financing-green-industrial-policy-under-financial-constraints-in-india","status":"publish","type":"publication","link":"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/lessons-from-financing-green-industrial-policy-under-financial-constraints-in-india\/","title":{"rendered":"Lessons from financing green industrial policy under financial constraints in India"},"content":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<?xml encoding=\"UTF-8\"><p>This policy brief sets out India&rsquo;s approach to financing green industrial policy, and particularly the expansion of solar power, in the context of limited fiscal resources and India&rsquo;s 2070 net zero goal. The brief describes the success of state-organised financing policies for solar power and lessons that can be applied to other emerging markets and developing economies (EMDEs).<\/p>\n\n\n\n<p><em>The brief is one of a series of three; read the <a href=\"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/lessons-from-using-state-organs-to-finance-the-green-transition-in-china\/\" target=\"_blank\" rel=\"noreferrer noopener\">China brief here<\/a> and the <a href=\"https:\/\/www.lse.ac.uk\/granthaminstitute\/publication\/lessons-from-attracting-international-capital-for-renewables-in-vietnam\/\" target=\"_blank\" rel=\"noreferrer noopener\">Vietnam brief here<\/a>.<\/em><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Main messages<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Annual investments in India&rsquo;s energy sector need to triple to around US$200 billion to meet the country&rsquo;s 2070 net zero ambition, suggesting that energy will likely require the most capital of any sector.<\/li>\n\n\n\n<li>India is using tools outside the state budget to address the current investment gap and the country&rsquo;s green industrial policy has far exceeded expectations, notably in the space of solar power.<\/li>\n\n\n\n<li>India recently became the second-largest manufacturer and installer of solar panels globally.<\/li>\n\n\n\n<li>India&rsquo;s approach can be summarised as &lsquo;state-organised financing with limited fiscal expenditure&rsquo;, highlighting a distinction between two categories of state spending: fiscal spending from the parliament-approved state budget and other forms of government-organised financing.<\/li>\n\n\n\n<li>Direct fiscal expenditures from the state budget are kept at a minimum and are narrowly scoped to specific technologies, such as through the Production Linked Incentive (PLI) scheme for solar manufacturing.<\/li>\n\n\n\n<li>Most state financing comes from tools with no direct state budget impacts. This includes state-owned enterprises (SOEs) investing in renewable energy projects, state-owned financial institutions being mandated by the state to increase green lending, and sub-national state-owned distribution companies (&lsquo;discoms&rsquo;) providing financial de-risking through advantageous price and uptake terms for renewable power generation.<\/li>\n\n\n\n<li>These measures are complemented by state demand and import barriers to improve the profit case and incentivise the private sector to scale up investment.<\/li>\n\n\n\n<li>India&rsquo;s experience provides key lessons globally but particularly for EMDEs, where financing needs are as great and financial resources are frequently as constrained as India&rsquo;s. The findings suggest that green industrial policy may be feasible even under severe financial constraints.<\/li>\n<\/ul>\n\n\n\n<p><strong><a class=\"link link--external\" rel=\"noopener\" href=\"https:\/\/researchonline.lse.ac.uk\/id\/eprint\/137528\/\" aria-describedby=\"link-description-new-window\" target=\"_blank\" title=\"\">DOI: 10.21953\/researchonline.lse.ac.uk.00137528&#65279;<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" viewbox=\"0 0 16 16\" role=\"img\" aria-hidden=\"true\"><path d=\"M14.42 1.04L3.2.7a.8.8 0 00-.8.76v.1a.8.8 0 00.76.7l9.39.3L.93 14.16c-.3.3-.3.8 0 1.1l.09.08c.3.23.73.2 1.01-.07L13.65 3.65l.29 9.4a.8.8 0 00.8.76.79.79 0 00.77-.8L15.17 1.8a.82.82 0 00-.75-.76z\" fill=\"#2e3152\"><\/path><\/svg><\/a><\/strong><\/p>\n\n","protected":false},"excerpt":{"rendered":"<!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\">\n<?xml encoding=\"UTF-8\"><p>Analysis of India&rsquo;s successful state-organised financing policies for solar power, and lessons for other emerging markets and developing economies.<\/p>\n\n","protected":false},"author":23,"featured_media":83101,"template":"","tags":[2300,210,5146,1668,5144],"publication-type":[1682],"topic_area":[4697,4710,4706],"class_list":["post-83100","publication","type-publication","status-publish","has-post-thumbnail","hentry","tag-emdes","tag-india","tag-industral-policy","tag-solar-power","tag-state-owned-enterprise","publication-type-policy-publications","topic_area-energy","topic_area-public-finance","topic_area-major-emitting-countries"],"acf":{"show_translations_widget":{"ref_value":"field_6203d588c41e8","value":"0","type":false,"post_type":""},"exclude_from_sync":{"ref_value":"field_560538b0e7350","value":"0","type":false,"post_type":""},"downloads":{"ref_value":"field_52f16cc1a80f2","value":["https:\/\/www.lse.ac.uk\/granthaminstitute\/wp-content\/uploads\/2026\/01\/Lessons-from-financing-green-industrial-policy-India.pdf"],"type":"download","post_type":""},"rss_newsletter":{"ref_value":"field_54f5c2c1544d8","value":"","type":false,"post_type":""},"profile_link":{"ref_value":"field_52f164b5189e9","value":["mathias-larsen"],"type":"relationship","post_type":"profile"},"spotlight":{"ref_value":"field_52f80896506d3","value":"","type":false,"post_type":""}},"yoast_head":"<!-- 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