India Becomes Third-Largest Power Generator Globally, Driven by Clean Energy Push: IEA

New Delhi, June 19, 2025 — India now ranks third in global power generation capacity, trailing only China and the United States, according to the latest findings from the International Energy Agency (IEA). This significant achievement reflects India’s sustained focus on expanding energy production and embracing clean energy.

Over the last five years, India has recorded the third-largest increase in power generation capacity worldwide. The report attributes this growth to the country’s rising electricity demand, spurred by rapid urbanization, growing residential and commercial infrastructure, greater use of household appliances like air conditioners, and increasing industrial consumption.

To meet this surging demand, India has diversified and expanded power generation across various sources. A key highlight of the report is India’s accelerating shift toward renewables. Solar photovoltaic (PV) technology, in particular, has emerged as a cornerstone of India’s non-fossil fuel strategy, accounting for over half of total non-fossil energy investments during the last five years.

Clean energy investments made up a staggering 83% of India’s total power sector investments in 2024 alone, a reflection of robust government policy and investor confidence in sustainable infrastructure. India also became the top recipient of development finance institution (DFI) funding for clean energy in 2024, securing nearly USD 2.4 billion in project-specific investments.

Foreign direct investment (FDI) in India’s power sector has also shown a sharp rise, reaching USD 5 billion in 2023 almost double the pre-pandemic figures. The government’s decision to permit 100% FDI in all electricity generation and transmission areas (excluding nuclear power) has helped catalyze this growth.

However, the report noted a decline in foreign portfolio investments in the energy sector over the past two years due to global macroeconomic uncertainties and sector-specific challenges. Despite this, the IEA maintains a positive long-term outlook for India’s energy trajectory.

The report affirms India’s growing stature as a global energy player and highlights the nation’s policy-driven momentum toward achieving a cleaner, more resilient power infrastructure.