India has been behind China in economic and technological development, and as they are coming up the curve, they are now looking at a different set of options than China had 2 decades ago.
India is generating more solar electricity, burning far fewer fossil fuels and electrifying transport faster than China did at an equivalent GDP per capita.
India is harnessing some of the cheapest solar in the world to power its industrial rise – bypassing an expensive, insecure, fossil-burning interlude. Where China and the West took the long road to the energy future, India is taking a shortcut.
India’s shortcut has consequences, both at home and abroad. It offers a faster, cheaper route to growing electricity. It means greater energy sovereignty at an earlier stage of development. It can position India as a third pole of influence in a world where energy is being reshaped by electrotech and trade by Sino-American competition. Such advantages are not a foregone conclusion, but the signs are promising.
Over the last two decades, the cost of core electrotech like EVs, solar panels and batteries have plummeted. To put that in perspective, in 2004, when China crossed 1,500 kWh of electricity use per capita, coal generation was about ten times cheaper than nascent solar photovoltaics (PV). What followed was predictable: over the next decade, coal made up nearly 70% of the growth in China’s electricity generation.
In contrast, as India crosses 1,500 kWh of electricity use per capita, now, solar-plus-storage costs around half as much as new coal plants. This gap is widening as solar and battery costs fall along predictable learning curves, while coal power becomes more expensive with declining utilisation.
Transport tells a similar story. In 2011, when China reached road transport oil demand of 150 litres of gasoline equivalent per capita, batteries were ten times more expensive than they are now, and the electric vehicle industry barely existed.
Meanwhile, India’s road oil demand at 96 litres per capita, is unlikely to ever reach even 150 litres per capita. Electric vehicles are already undercutting internal combustion engines on price. Why pay a premium for foreign oil and local smog?
The implication is that the energy pathway that makes economic sense for India today, as it rapidly industrialises, is not what made sense for China when it made the same journey.
The energy revolution runs along two tracks. First, renewables coupled with battery storage are taking over electricity supply. Second, electricity is taking over energy demand; everything that can economically electrify will go electric, from transport to industry and buildings. On both fronts, India is achieving greater success at earlier stages of development.
Looking at electricity generation first. In India, solar reached 5% of total generation at around $9,000 GDP per capita; in China, it took until about $23,000 to reach that level. Where solar goes, batteries are following fast: the share of renewable tenders paired with battery storage has climbed from about 12% in 2021 to half in 2024.
Meanwhile, coal power growth is fading at levels a quarter of where China’s did. Indian coal-fired generation in 2025 is set to fall year-on-year, though solar’s rise continues uninterrupted. Ember and TERI’s least-cost pathway projects plateauing coal demand through to 2030. Similarly, IEA’s Stated Policies scenario (which has historically underestimated electrotech growth) sees India’s coal demand in 2035 at roughly today’s level. In all likelihood, India will reach $20,000 GDP per capita without coal generation ever exceeding the levels China was burning at $5,000.
If we believe in markets, and I do, and we expect that people make rational decisions for their best economic advantage, then it is reasonable to assume that other countries in the developing world will follow in India’s footsteps.
This is not good news for frackers like US Energy Secretary Wright, who paid a million dollars to the Trump campaign to buy his cabinet post – no doubt thinking it would be a slam dunk to lock the world into his industry’s product.
But the Trump administration has shown that dependence on the US for something as vital as energy means you are ripe to be bullied, tariffed, and extorted in the future.
Now that there’s a choice, it seems likely that rising nations will make the one with most upside.
Liquefied natural gas producers must be heading home from India Energy Week a little underwhelmed. The world’s most populous country is meant to be one of the industry’s great growth stories — yet you wouldn’t have guessed it from the annual gathering in Goa.
A record wave of supply is about to hit the market, swelling portfolios from Shell Plc to QatarEnergy. Billions of dollars have been plowed into new projects on the assumption that demand across emerging Asia — and especially India — will surge.
But conversations with executives at the summit suggest the optimism may be premature. India is the world’s fourth-largest LNG buyer, but import growth has stalled since 2020, and no major contracts were announced at the conference.
The country needs more imported LNG as domestic gas output declines and the government pushes ahead with a goal of doubling the fuel’s share of the energy mix by 2030. Global suppliers, meanwhile, are eager — arguably desperate — to lock in paying customers under decades-long contracts.
India’s electricity production is going to have to chase the growth in demand for air conditioning.