India has significantly reduced its fossil fuel subsidies by 85% over the past decade, as per a recent report by the Asian Development Bank (ADB). This substantial cut aligns with India’s commitment to reduce its reliance on fossil fuels and increase its renewable energy capacity. A majority of these subsidy cuts were applied to oil and gas, enabling a greater investment focus on cleaner energy options.
The Indian government has been simultaneously expanding its infrastructure for liquefied natural gas (LNG) and supporting renewable energy sources such as solar and wind. With nearly 170 gigawatts of renewable energy installed by mid-2024, India is already a leader in new renewable capacities globally. The reduction in fossil fuel subsidies also complements India’s National Electricity Plan, which targets 500 gigawatts of non-fossil fuel capacity by 2030.
However, while coal subsidies saw a reduction until 2021, they have since increased in response to rising coal demands. The government is working on policies to ensure a balanced transition to clean energy, supported by tax incentives for renewables and initiatives for local solar manufacturing. As India continues its ambitious transition, international financial and technical support will be critical for reaching its goal of a 75% renewable energy generation share by 2030.
This shift away from fossil fuel dependency reflects India’s broader commitment to climate action and sustainable development, even as challenges remain to fully align with global 1.5°C climate targets.