India's Energy Tightrope: Balancing Decarbonization and Development

By Haley Zaremba - Sep 30, 2025

• India is under international pressure to decarbonize its energy sector, but it prioritizes energy security and economic development, arguing that developed countries should fund the global clean energy transition due to their historical emissions.
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• Despite being the third-largest greenhouse gas emitter, India's per-capita emissions are low, and the country is already experiencing the negative impacts of climate change and its own fossil fuel industry.
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• India is expanding its clean energy capacity, targeting 500 gigawatts of non-fossil fuel power by 2030, but faces significant funding hurdles and continues to advocate for accountability from G7 countries regarding past emissions and unfulfilled climate financing promises.

India is facing considerable international pressure to decarbonize its energy sector, but balancing energy security and a just transition with international climate accords is no easy feat. While India has historically adopted an ‘all of the above’ approach to energy policy, a more organized and comprehensive strategy is needed to walk the tightrope of the energy trilemma – establishing an energy mix that is sufficient, affordable, and sustainable. As energy demand rapidly increases, Indian electric grids require more and more energy each year, straining the nation’s production capacity and making decarbonization goals ever harder to reach.

The most populous country in the world, India is also one of the poorest, despite considerable economic development in recent decades. And increasing energy access is an absolutely critical part of India’s continued climb out of poverty. “Tackling the energy access gap is a critical step in meeting the country’s economic and social development ambitions, and it has been a top priority for successive Indian governments,” reports the Guardian. 

Indian leadership has never tried to hide its prioritization of energy security over energy greenification. Moreover, India has always pushed back on international agreements stressing the country’s role and responsibility in fixing a climate crisis that it contributed very little to. Rather, Indian representatives have argued that developed countries responsible for the lion’s share of historic greenhouse gas emissions should primarily fund the global clean energy transition for poorer countries that bear relatively little guilt but almost all of the consequences for global warming. 

While India is the third-largest greenhouse gas emitter in the world after China and the United States, Indians still have relatively low per-capita energy emissions compared to countries in Europe and North America. The average refrigerator in the United States consumes nearly half as much energy as an Indian person does in an entire year – and considerably more than someone living in sub-Saharan Africa. And yet people in these countries are experiencing the brunt of global warming. This injustice and hypocrisy, Indian leadership argues, merits that the West should concern themselves with their own energy transitions before they start mounting pressure on countries like India.

While G7 countries have pushed hard on Indian leadership to phase out coal, the Indian government has fought hard to water down such agreements, while also firing back at rich nations for their string of broken promises to provide climate financing to the developing world. In 2009, at the UN’s annual climate conference, rich countries promised to deliver $100 billion in climate financing each year starting in 2020. That money never even came close to materializing. 

This is not to say that India isn’t rapidly expanding clean energy capacity – it is. And Prime Minister Nerendra Modi’s government is targeting the addition of 500 gigawatts of non-fossil fuel power by 2030. However, the country’s clean energy plans continue to face major funding hurdles. India’s economy has hit a lag, and international investment has not been forthcoming. 

But India is already feeling the heat of a changing climate, as well as disrupted weather patterns. This is a major driver of the country’s rising energy demand, as air conditioning becomes increasingly necessary for public health and safety. Moreover, India is also feeling the negative public health consequences of its own dirty fossil fuels industry. So whether or not the burden of responsibility for decarbonization is fair, it’s undeniably necessary – and in short order.

“Based on health science alone, expanding fossil fuels goes against the human right to development because of the multigenerational harm caused to human health and food systems,” Elisa Morgera, UN special rapporteur on climate change, was quoted by the Guardian. “These impacts in and of themselves worsen climate impacts on human wellbeing and economies, on top of the direct harm to the climate system caused by fossil fuels.”

India will likely continue to try to hold G7 countries accountable for past emissions, fighting for an international agreement based on "common but differentiated responsibilities." But it cannot afford to maintain its reliance on fossil fuels – particularly coal. It’s a sticky situation, but India’s government is slowly but surely investing in the renewable energy transition while it also fights for climate financing follow-through. 

By Haley Zaremba for Oilprice.com