India's ambitious green growth plan faces financing and demand challenges

An editorial argues that India's goal of expanding its economy while reaching net-zero will require far more state-driven investment than private capital can provide.

According to the editorial, India's policy think-tank Niti Aayog claims the country is undertaking an unprecedented task: near-eightfold GDP growth alongside a net-zero transition. The author points out that historic industrialisers like China, Korea and Japan grew before decarbonising, and that India still depends heavily on coal, especially during peak loads, creating a dangerous climate feedback loop. Renewable sources now make up more than half of installed capacity, yet the report assumes a $30 trillion GDP by 2047 without detailing who will fund the surge in demand.

The article references political economist Mathias Larsen, who attributes India's solar boom to state-created markets and public financing, not spontaneous private investment. It warns that a whole-economy shift may not replicate this model, especially given fragile supply chains and global trade barriers, and suggests that without strong state spending and market guarantees, private investors may not scale up as needed.