A cautious approach to energy transition and reforms aligned with environmental regulation, climate commitments, and ease of doing business is at the heart of India’s approach as it pursues the Vikshit Bharat (developed India) goal by 2047, according to the Economic Survey 2025-26 tabled in Parliament on Thursday.
The survey summarises India’s cautious approach with a greater focus on development and adaptation. “The global climate change agenda has reached an inflexion point. What was once framed as a straightforward moral and technological transition toward a net-zero future is today marked by complex trade-offs, capacity constraints,” it says, giving examples from Europe.
It says the rapid deployment of solar and wind energy has collided with a distribution network designed for an earlier era of centralised thermal generation in the Netherlands, celebrated as a renewables and electric mobility leader. ”The result has been congestion, curtailment, and long waiting times for industrial connections, as well as appeals to households to moderate evening consumption to avoid overloading the system,” the survey says.
It notes Spain experienced a widespread grid disruption triggered by a combination of network instability during a period of high renewable energy output and transmission system sensitivity under shifting load conditions in April 2025. “Taken together, these strands of evidence point to a common lesson: transitions are more durable when sequencing, system buffers, and institutional depth are treated as intrinsic elements of design rather than assumed to follow.”
The survey says this is especially salient for emerging economies, where growth, energy security, and resilience must advance alongside low-carbon pathways, and not be displaced by it. It takes a guarded view of climate science and says the broader global climate discourse has undergone a gradual shift toward greater realism.
“The evidence from official assessments indicates that while the planet has warmed and human activity exerts a measurable warming influence, the translation of these findings into deterministic or catastrophic policy narratives often compresses nuance and downplays uncertainty,” the survey says.
It explains that a more careful reading suggests that climate risk, though serious, is best addressed through measured, evidence-based strategies that preserve energy security, competitiveness, and social stability, rather than alarmist framing.
The survey says a balanced perspective aligns with Bill Gates’s reflections ahead of the 2025 United Nations Climate Change Conference (COP30) in Brazil’s Belem. Gates said that although climate change will have serious consequences, particularly for people in the poorest countries, it will not lead to humanity’s demise. He added that people will be able to live and thrive in most places on Earth for the foreseeable future.
The survey calls for prioritising human welfare, particularly for poorer and climate-vulnerable societies. It says climate change will have meaningful consequences, but it is unlikely to produce civilisational collapse. The survey emphasises that development is, in itself, a form of adaptation. “While emissions mitigation is also important, effective climate action encompasses much more; it also depends on improving societal capacity to withstand shocks through stronger health systems, climate-resilient infrastructure, enhanced agricultural productivity, and access to affordable and reliable energy.”
The survey says India’s negotiating stance at climate forums must remain grounded in first principles—predictable and front-loaded finance reflecting full-system costs, technology flows, and commitments that respect differentiated capabilities, responsibilities, and risk exposures.
It notes India has successfully reduced its emissions intensity by 36% since 2005 and achieved 50% non-fossil power capacity ahead of schedule. The survey underlines that climate finance remains skewed towards mature sectors such as solar, wind energy, and energy efficiency. “Critical areas, including adaptation, financing for micro, small, and medium enterprises (MSMEs), urban infrastructure, and hard-to-abate industries, remain underfunded. Currently, around 83% of India’s finance for mitigation and 98% of finance for adaptation is sourced domestically.”
The survey notes renewable energy will continue to play a major role in India. “But the cost of maintaining dispatchable thermal capacity is expected to increase, even as utilisation declines, while grid stability challenges also intensify.”
The survey calls rationalisation and predictability in environmental regulations a specific area of concern for the government. India has undertaken measures to reform environmental governance, aligning environmental protection, climate commitments, and ease of doing business.
Curated by James Chen
