The path to net zero

(Based on NITI Aayog's Scenarios Towards Viksit Bharat and Net Zero: Macroeconomic Implications (Vol. 2), 2026)

Why Net Zero matters for India

India is one of the fastest-growing economies in the world — but it is also one of the most vulnerable to climate change. Erratic monsoons frequently hurt farmers. Heatwaves impact millions of students and daily-wage workers. Floods disrupt millions of lives and cause severe damage to homes, farms and infrastructure. Climate change is not a future problem; it is already costing India money, jobs, and lives.

Besides, India spends a huge chunk of its money importing fossil fuel. This has a profound impact on our economy. Dependence on imported energy weakens our geopolitical strength & energy security and adversely impacts our trade balance, currency, inflation, and rates. Moving away from fossil fuels is not just good for the planet; it makes India less dependent on other countries and less exposed to price shocks.

Finally, the world is changing its trade rules. Countries like those in Europe are starting to charge extra on goods made with heavy carbon emissions. If India wants to keep selling to the world, going green is no longer a choice — it is a business necessity.

India’s strategy

India has promised the world it will reach net zero carbon emissions by 2070. That means, by then, the country will not be adding more greenhouse gases to the atmosphere than it removes. This is a big goal — and it is tied directly to India's dream of becoming a fully developed nation by 2047, what the government calls Viksit Bharat.

India’s pathway to net-zero is built on ambitious targets, such as reaching 500 GW of renewable energy capacity by 2030, meeting 50% of its energy needs from renewables, and reducing emission intensity of GDP by 45% over 2005 levels by 2030.

India is progressing well on the committed path. Today, half of India's electricity-generating capacity comes from clean sources like solar and wind. Government spending on infrastructure has tripled over the last decade. Programmes like PM-KUSUM (solar panels for farmers) and FAME (support for electric vehicles) are pushing the green agenda into everyday life.

What the shift will feel like

Short term (up to 2030): Costs before the gains

India’s net-zero targets, however, is challenging, especially since its per capita emissions are significantly lower than the global average. Despite this, India faces the pressing task of meeting the energy needs of a growing economy while reducing its carbon footprint.

In the short term, transitioning to a low-carbon economy will require massive investments in renewable energy, energy-efficient infrastructure, and clean technologies. The investment gap for this transition is estimated to be substantial—around USD 2.25 trillion more than the business-as-usual scenario. This will pose challenges, as public and private sectors must find ways to mobilize capital without straining India’s fiscal health.

The government will need to step in with subsidies, cash support, and strong social safety nets so that the burden does not fall on those who can least afford it. Coal workers and others in fossil fuel jobs will also need help retraining for new roles in the clean economy.

Medium term (2030–2050): Green jobs and a leaner import bill

By mid-century, the benefits may start showing up. Manufacturing — driven by solar panels, batteries, and clean tech — grows significantly, creating more jobs for skilled workers. India's oil import bill, which currently eats up about 4% of GDP, shrinks dramatically as the country relies less on imported fuel. That means more money stays in India, the trade deficit narrows, and the economy becomes more stable. If the world helps fund India's transition through international climate finance, the gains come sooner and the costs on ordinary people stay lower.

India’s GDP is projected to remain resilient during this period, with growth rates largely unaffected by the transition, driven by increasing investment in clean technologies and infrastructure.

Long run (2050–2070): A stronger, self-reliant India

By 2070, the picture looks very different — and much brighter. India’s economy will have fully transitioned to a low-carbon structure, with green industries driving much of the growth. The shift towards a capital-intensive economy will be evident, as investment in infrastructure, clean energy, and technology development will continue to grow. This shift is expected to increase manufacturing output in clean-tech sectors, significantly improving economic resilience.

India's fuel import bill drops from 4% of GDP today to just 0.2%. The economy is cleaner, more competitive, and far less exposed to global oil price swings. Wages in the clean energy and manufacturing sectors rise. And India becomes a more attractive destination for global investment because it plays by the new, greener rules of the global economy. Growth holds firm — the USD 30 trillion economy target remains in reach.

The Bottom Line

India’s commitment to achieving net-zero emissions by 2070 is a critical step towards a sustainable future. The country faces significant challenges in balancing economic growth with climate action, but it also has a unique opportunity to lead the way in green technologies and low-carbon development. The socio-economic impacts of pursuing a net-zero pathway will be profound, affecting sectors ranging from energy to industry, agriculture, and transportation.

Going net zero does not mean India has to slow down. It means India has to grow smarter. The costs are real in the short run, especially for vulnerable households — and the government must not ignore them. But the long-term picture is one of energy independence, more jobs in new industries, a cleaner environment, and a stronger economy. India has pulled off big reforms before — think GST, UPI, and Aadhaar. The green transition is the next big one. And if done right, it will be worth it.