Report

Mapping India's Energy Subsidies 2020: Fossil fuels, renewables and electric vehicles

How have India’s energy subsidy policies changed? What have been the most significant developments in India’s dynamic energy policy environment? And is public support aligned with India’s desired energy future?
By Vibhuti Garg, Christopher Beaton, Shruti Sharma, Richard Bridle, Balasubramanian Viswanathan, Danwant Narayanaswamy, Karthik Ganesan on April 7, 2020
  • Electric vehicle subsidies have grown over 11 times since FY 2017 in #India.

  • In 2019, fossil fuel subsidies in #India were 7 times bigger than renewable #energy subsidies.

  • Subsidies for #renewables dropped 35% while subsidies for oil and gas went up 65% since FY 2017 in #India.

Key Messages

  • Shift public resources to a cleaner future. India’s progress since FY 2014 shows a commitment to the energy transition, driven at least in part by specific actions to reform perverse subsidies and back clean energy—but further efforts are required to shift public resources away from fossil fuels and toward clean energy.
  • Align health and economic coping strategies with the desired energy future. India should prioritize health and economic recovery as it navigates the COVID-19 crisis—but clean energy transition can and should be reflected in coping strategies and support measures.
  • Track and evaluate energy subsidy policies more systematically. Subsidy reporting can be conducted in line with formal guidelines for Sustainable Development Goal 12(c)1 and India’s G20 peer review of fossil fuel subsidies. With fuller data, ministries should monitor, evaluate, and adapt their most significant subsidies to better meet policy objectives.

Subsidies matter because they are used by governments around the world to influence energy producers and consumers. Mapping India’s Energy Subsidies 2020: Fossil fuels, renewables, electric vehicles examines how the Government of India (GoI) has used subsidies to support different types of energy, highlighting the most significant developments from FY 2014 to FY 2019. We seek to answer: How have India’s energy subsidy policies changed? What have been the most significant developments in India’s dynamic energy policy environment? And is public support aligned with India’s desired energy future?

The report is accompanied by an online data portal to help browse the subsidy data in detail and includes detailed spreadsheets and annexes for policy-makers and researchers. The analysis is the latest update in the India's Energy Transition series from the International Institute for Sustainable Development's (IISD) Global Subsidies Initiative (GSI) and Council on Energy, Environment and Water (CEEW). For previous iterations of this study, see:


Reactions to the report

"The report has brought out a holistic view on India's energy transition pathway and different kinds of subsidies support provided to the Indian energy sector and their trends. The recommendations made in the report are extremely progressive and provide impetus to promoting clean energy and better utilization of subsidies. The report will greatly facilitate policy-making in the energy sector."

—Amitabh Kant, CEO of NITI Aayog 

“This study shows the real, social, cost of coal in India. By subsidizing polluting fossil fuels, the country is suffering from another health crisis: air pollution. Financial relief packages need to take into account the long-term health effects of the energy choices we make today.” 

—Dr. Maria Neira, WHO Director, Department of Environment, Climate Change and Health

"Ambitious policy and regulatory frameworks are critical to creating favourable and competitive conditions, allowing renewable energy to grow and displace more expensive and carbon-emitting fuels; fossil fuel subsidies must be cut."

Rana Adib, Executive Director, REN21, @RanaAdibX

Report details

Topic
Subsidies
Energy
Climate Change Mitigation
Sustainable Development Goals
Region
India
Project
IISD Global Subsidies Initiative
Focus area
Climate
Publisher
IISD
Copyright
IISD, 2020