How India is charting a new path into the electric age

For two centuries, industrialization meant burning through vast quantities of fossil fuels. Britain got rich on coal. America on oil. China followed suit, only faster, doing in a generation what the West did in a century. Now India, the argument runs, must do the same.

The numbers suggest otherwise. India is forging a new path – industrializing on cheap solar and batteries rather than fossil fuels. It is bypassing the fossil fuel detour taken by the West and China.

Compare India today with China at equivalent income levels. In 2012, China had negligible solar, and coal demand showed no signs of slowing. India in 2025 generates 9% of its electricity from solar, uses barely a quarter of the coal per person, and is already approaching its coal generation peak.

Transport tells a similar story. India’s road oil demand, at 96 litres per capita, is half of China’s at the same stage of development and is unlikely to rise much further. Electric vehicles are nearing 5% of car sales, as adoption races up the S-curve. In three-wheelers, India leads the world, with electric models approaching 60% of the market.

Zoom out to economy-wide electrification where India is keeping pace. Electricity now accounts for nearly 20% of final energy – matching China at equivalent income levels and rivalling advanced economies today.

The divergence reflects a fundamental shift in the economics of energy. When China crossed 1,500 kWh of electricity consumption per person, coal was 10 times cheaper than solar. Today, as India reaches the same threshold, solar plus storage costs half as much as new coal. Similarly, when China hit 150 litres per capita of road oil demand, batteries cost 10 times what they do now and the EV industry barely existed. The technology that made sense for Beijing then makes no sense for Delhi now.

Two other factors underpin India’s success. Its economy is lighter, more services-led, with a fraction of China’s heavy industry. In other words, its growth is less energy-intensive. And second, smart policy is encouraging electrotech investment. BNEF, for example, routinely ranks India top among emerging markets for energy transition enabling policies.

The policy push is also spurring a manufacturing boom. The electronics industry has surged nearly sixfold in a decade to $130 billion – and electronics is the gateway to electrotech. The capabilities built for smartphones spill over into solar panels, batteries and EVs.

Solar module production has grown twelvefold to 120 GW, more than enough for self-sufficiency. Cell manufacturing, virtually absent a decade ago, has reached 18 GW. Battery and EV manufacturing are not far behind.

With advanced economies scrambling to diversify supply chains, demand for alternative partners is rising. India is positioning itself to supply electrotech to the world.

Another advantage is sovereignty. In 2024, India spent 3.6% of its GDP on fossil fuel imports – a drain on the balance of payments, a source of economic volatility, a constraint on foreign policy. India’s electrotech path offers independence at an earlier stage of development.

India’s choices also have implications beyond its borders. As the world’s most populous nation and fastest-growing major economy, it offers proof of a new path – one where electrotech powers growth, rather than follows it. As India shows the world a fast track to a superior energy future, other emerging markets are watching.

For fossil fuel producers, the implications are uncomfortable. The assumption that development means rising oil and gas demand has long underwritten the industry’s investment thesis. That world is ending. Emerging markets are not coming to the rescue of the petrostates.

The old model – burn first, clean up later – came at a cost. From local pollution to import bills to geopolitical vulnerability. India is proving there is a better way. The fastest, cheapest route to industrial modernity is electrotech.