Robust infra demand to propel investment growth in India, private sector vital: Moody’s

Mumbai, June 4 India will need massive investment to achieve its 2070 net-zero pledge as it balances energy security, affordability and transition, Moody’s Ratings said on Wednesday.

Achieving this pledge will necessitate substantial investment, particularly in the power sector, which is a material contributor to the nation's carbon emissions.

Over the next decade, these investments are projected to constitute 2 per cent of real GDP for the electricity value chain, encompassing power generation, storage, transmission and distribution, the report mentioned.

The government’s plan to reach net-zero emissions by 2070 will be contingent upon a shift in the fuel mix from the current predominantly coal-fired power toward clean and renewable energy.

However, strong economic growth implies India will also expand its coal-based power generation capacity by 32-35 per cent (or around 70GW-75GW) over the next 10 years, even as it adds around 450GW of renewable energy over the same period.

“We expect the private sector to remain active in India's renewable energy sector, while government-owned companies will also increase their role,” said Abhishek Tyagi, a Moody’s Vice President and Senior Credit Officer.

Solar and wind power will dominate new generation capacity additions over the next 20-25 years, with smaller nuclear and hydropower additions, he added.

Securing diverse sources of capital, including foreign investments (both debt and equity), will be crucial to bridge the funding gap for energy transition-related infrastructure.

Meanwhile, the government has planned sizeable capex under its ‘Maritime India Vision 2030’ to augment port capacity and infrastructure over the course of next few years.

Moody’s Indian affiliate ICRA expects cargo volumes to rise by 3-5 per cent in FY26, driven largely by the growth in the container, petroleum products and the fertiliser segment.

Apart from the traditional segments like transportation and energy within infrastructure space, data centre is emerging as a new hotspot for infrastructure investment.

ICRA expects significant investment pipeline of Rs 1.6-1.8 trillion in data centre (DC) capacity addition over next 5-6 years in India, supported by rapid digitalisation along with favourable policy measures.

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