India’s carbon dioxide (CO2) emissions grew by just 0.7% in 2025, the slowest rate in more than two decades, even as the Centre unveiled an updated climate roadmap that balances rising clean energy ambition with continued reliance on fossil-fuel-linked industries.
An analysis of India’s emissions trends shows that the sharp slowdown marks a significant shift from the 4%-11% annual growth recorded during 2021–24. The moderation has been driven largely by a decline in emissions from the power sector, where record renewable energy additions combined with subdued electricity demand helped offset increases from industrial sectors.
Emissions from the power sector fell by 3.8% in 2025, a notable development given that it had been the biggest contributor to emissions growth in recent years. This comes alongside a historic drop in coal-fired power generation, the first outside the Covid-19 disruption since 1973.
The turnaround has been underpinned by an unprecedented scale-up in clean energy. India added 47 GW of solar, 6.3 GW of wind, 4 GW of hydropower and 0.6 GW of nuclear capacity in 2025 alone. These additions are estimated to generate about 90 terawatt hours (TWh) of electricity annually, double the clean power added in 2024.
At the same time, electricity demand growth slowed sharply to 1% in 2025, down from an average of 7.4% during 2019–23, due to milder weather and a broader economic slowdown. This combination enabled renewable energy growth to outpace demand, reducing the need for fossil-fuel-based generation.
However, the overall emissions trajectory continues to be shaped by industrial expansion. Steel and cement production rose by 8% and 10% respectively in 2025, together accounting for 21% of India’s total emissions. The increase in these sectors outweighed the reductions in coal power and gas demand, resulting in a marginal overall rise in emissions.
Oil demand growth also slowed significantly to 0.4% in 2025 from 3.9% the previous year, reflecting weaker industrial activity and structural shifts such as rising electric vehicle (EV) adoption and increased use of compressed natural gas. EV sales grew by 16% during the year and accounted for 8% of total automobile sales.
Fossil fuel imports showed a mixed trend. Consumption of imported coal at power plants fell by 20%, while gas imports declined by 6% and oil imports remained flat, indicating reduced vulnerability to global energy disruptions.
Against this backdrop, the Union Cabinet has approved India’s updated Nationally Determined Contributions (NDC 3.0), outlining climate targets for 2035. The new commitments include a 47% reduction in emissions intensity of GDP from 2005 levels, achieving 60% of installed power capacity from non-fossil sources, and expanding carbon sinks to 3.5–4 billion tonnes.
However, estimates suggest that non-fossil power capacity could reach nearly 70% by 2035, higher than the formal commitment of 60%.
“India's booming clean energy industry is highly likely to deliver much faster progress than policymakers were prepared to commit to today. The country’s Paris Agreement targets for 2035 did not reflect the potential for slower emissions increases or continued clean-energy growth,” said Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air.
“India's new 2035 climate targets underestimate the country's potential for transformative clean energy growth. Under current plans, the target of 60% clean power capacity will be achieved before 2030, rather than by 2035. Continuing the current clean energy growth at rates already achieved in 2024–25 would enable India to peak power sector emissions well before 2030 and significantly slow down its CO2 emission growth rates. Yet, the carbon intensity target announced today allows for an acceleration of emissions growth compared with past rates if GDP growth is at target,” he added.
India, meanwhile, continues to plan significant expansion in fossil-fuel-linked sectors. The country aims to add 100 GW of new coal-fired power capacity over the next seven years, alongside increased investment in petrochemicals, steel and cement production. This dual-track strategy highlights the challenge of reconciling development needs with decarbonisation goals.
Looking ahead, India’s power sector could be nearing an inflection point. Clean energy additions expected in 2026 are projected to generate over 100 TWh annually, potentially sufficient to meet the anticipated rise in electricity demand of 5%–5.5%. If this trend holds, fossil-fuel-based power generation and associated emissions could stabilise or even decline.
Over the longer term, India is targeting 500 GW of non-fossil power capacity by 2030, which could enable clean energy to meet nearly all incremental demand growth. Combined with advances in battery storage and electrification, this could significantly alter the country’s emissions trajectory.