South Asia's energy transition in July: Momentum and vulnerability

In July, the Parliament of India noted that India's installed renewable energy capacity has reached 288.58 gigawatts (GW), nearly four times what it was in 2014, placing the country among the world's top three renewable markets. That scale is beginning to attract the capital it needs. The International Energy Agency’s (IEA) World Energy Investment 2026 report confirmed that India's energy investment is on track for a record USD170 billion (INR16,15,000 crore) this year, growing at an average rate of 11% annually for five consecutive years.

The India-Australia Annual Summit in July added an important strategic dimension, producing a joint statement on energy security spanning critical minerals, clean energy and supply chain resilience. That partnership also raised a question worth examining: Is India betting on a fuel facing an uncertain export future? India's steel expansion plans remain heavily weighted toward blast furnace technology, even as Australia's metallurgical (met) coal export forecasts have been consistently revised downward throughout this decade. As we set out in The Economic Times, the more forward-looking path runs through scrap-based steelmaking and green hydrogen-based direct reduced iron, and India already has the building blocks in place to take it.

Across the border, Bangladesh had a more difficult month. A fire at the Maheshkhali liquefied natural gas (LNG) terminal disrupted gas supply at precisely the moment demand was at its summer peak, prompting the government to fast-track plans for a third LNG terminal to fill the gap. Power cuts deepened as the weeks went on, with daily outages reaching up to 3,350 megawatts (MW) as late payments to power producers compounded an already strained supply situation. By late July, the gas crunch was crippling factories and threatening export orders, with manufacturers paying diesel premiums simply to keep production lines running. It is a picture that underscores, again, how heavily Bangladesh's economic resilience is exposed to the volatility of imported fuels.

The two stories sit at different points on the same curve. India is building at scale and needs the institutional depth and policy precision to sustain momentum. Bangladesh has an urgent and increasingly compelling economic case for transition. The structural work of enabling that change is what our team has been focused on across the region. The path ahead is clear for both, and the pace of progress has rarely mattered more.

Best wishes,

Vibhuti Garg
Director, South Asia
Institute for Energy Economics and Financial Analysis (IEEFA)

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Featured commentaries

Driving the energy transition, debunking climate mitigation myths – Shafiqul Alam in The Business Standard, Bangladesh 

The green industrial policy India actually needs – Labanya Prakash Jena, Prasad Ashok Thakur and Saurabh Trivedi for The New Indian Express

India-Australia minerals deal: Dig deeper – Saloni Sachdeva Michael and Kaira Rakheja for The Hindu Business Line

India’s steel ambitions face a coal reality check – Simon Nicholas for The Economic Times

India’s clean energy boom: Why the city of London should be paying attention – Kevin Leung and Saurabh Trivedi

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The Math of Growing Sustainability (Open Magazine)

High customs duties dwarf rooftop solar ambitions (The Financial Express)

Rare earth minerals explained: Why are they the world's most strategic resources? (The Economic Times)

What’s next in India’s EV (r)evolution? (The Week)

Bangladesh bets on rooftop solar to reach 20pc renewable power by 2030 (The Climate Watch)

Government plans wider policy support for battery recycling, advanced chemistry cells (DownToEarth)

India’s green hydrogen plans gain pace, but demand and costs pose hurdles (Business Standard)

Can India Build a Domestic Solar Supply Chain Without Derailing its Clean Energy Targets? (Climate Action Live)

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