India faces an annual renewable energy financing gap of $35 billion as the country progresses towards its 500 GW non-fossil fuel energy capacity target by 2030. According to the Ministry of New and Renewable Energy, India's non-fossil fuel capacity, led by renewables, has increased fivefold over the past decade, from 59 GW in 2016 to 300 GW as of July 2026. The country needs to add nearly 200 GW over the next four years, requiring annual capacity additions of around 50 GW.
According to Knight Frank India’s latest study --Deepening InvITs for Capital Recycling in Renewable Energy-- this will require annual investments of USD 48-54 billion, significantly above the current annual investment of USD 13-18 billion. With private developers accounting for over 90% of the country's renewable energy capacity, the need for efficient capital recycling has become increasingly critical.
Further, the report states financing renewable energy projects in India remains almost 80% more expensive than in mature international markets. Against this backdrop, Infrastructure Investment Trusts (InvITs) can emerge as a critical financing solution. As per the report, less than 2% of India's operational renewable capacity has been monetised through InvITs, underscoring the untapped opportunity.
Shishir Baijal, International Partner, and Chairman and Managing Director, Knight Frank India, said; "India's renewable energy journey has now reached an inflection point where financing innovation will be as important as capacity addition. While the country has made remarkable progress in expanding renewable energy capacity, achieving the 500 GW target by 2030 will require significantly higher and more efficient capital deployment.
InvITs can play a transformative role by unlocking capital embedded in operational renewable assets, reducing the cost of capital over time, and accelerating investments into the next generation of renewable energy, storage and transmission infrastructure. As operational renewable portfolios continue to mature, we expect InvITs to emerge as a mainstream financing avenue supporting India's long-term energy transition."