India is the world’s third largest economy with a rapidly expanding population, and hence substantial increases in energy demand. India’s government is looking for ways to power further economic growth needed to raise the living standards of about one fifth of Indians who still live in poverty. The government also seeks to expand electricity access to the 240 million people without grid electricity, to improve the quality of electricity supply and to boost per capita energy consumption.

Energy subsidies reviewed in this report are key to India’s development trajectory. These subsidies determine how India’s energy demand is and will be met, locking in several critical choices. Which energy sources will power India’s economic growth: renewables or the fossil fuels that accounted for up to 92 per cent of the country’s total primary energy supply in 2015? Which industries and households—poor or rich—are to enjoy affordable energy? Which investments are to pay off or become stranded? Energy subsidies also lock in the choice of how polluted or clean the Indian environment will be, with important implications for the climate and health of Indians.

This report maps out the context, magnitude, trends and impacts of India’s energy subsidies. The aim of the study is to enhance transparency and dialogue on energy choices in India and assist in tracking the shift in government support from fossil fuels to renewables, in line with the country’s goals of increasing access to low-carbon and energy-efficient services.

The report is available for download on the IISD website.