08-07-2025
From AI Grid Management To Hydrogen, India's Climate Tech Sector Is Growing
(Photo by MONEY SHARMA/AFP via Getty Images)
While India's energy sector faces significant scaling challenges – decarbonizing a rapidly growing economy with a population of 1.4 billion that is projected to account for 25% of global energy demand growth over the next two decades, according to the International Energy Agency – this dynamic also presents a unique opportunity.
India has pledged to reach net-zero emissions by 2070 and aims to meet 50% of its energy needs from renewables by 2030. To support this, the government has adopted bold steps, including the production-linked schemes to boost domestic manufacturing in solar modules, batteries, and green hydrogen technologies. The U.S.–China tariff fallout has also prompted a reevaluation of global supply chains. In response, Indian companies like ours are stepping up to fill critical gaps left by Chinese suppliers in the U.S. market, especially in solar exports.
However, when it comes to climate innovation, the true potential lies beyond manufacturing. As of 2024, there are over 800 Indian climate tech startups, with breakthroughs spanning scalable energy storage, green hydrogen, and AI-powered grid management. A digital-first, problem-solving mindset is fueling a new wave of climate entrepreneurship in the country.
For example, AI-powered grid management systems, such as the system developed by POSOCO, are helping balance intermittent renewables with real-time consumption. Affordable energy storage solutions are being tailored for both utility-scale applications and rural microgrids, and breakthroughs in scalable green hydrogen applications are helping decarbonize hard-to-abate sectors. Overall, Indian solar power startups have continued attracting interest from international investors even when economic conditions have cooled the broader market. In January 2024 alone, they raised nearly $1 billion, compared to a total of $1.55 billion in all of 2023. Because Indian startups are innovating for both resilience in low-resource conditions and replication outside of India, these companies have the potential to set the bar for how energy companies operate in the future.
On the other hand, climate tech in India needs significant international investment. To meet net zero, an estimated $10 trillion in cumulative investment is needed, according to The Council on Energy, Environment and Water, to meet that stated 2070 sustainability goal. However, access to affordable capital remains a major constraint, particularly for early-stage and infrastructure-heavy projects. Risk guarantee instruments, including credit guarantees and political and economic risk insurance, are critical, particularly for startups. If domestic capital markets evolve to price climate risks appropriately and reward green investments, more businesses will change their priorities.
Climate change is a shared global challenge, and made-in-India solutions can play a central role in global decarbonization. Partnerships between Indian startups and global R&D labs, accelerators, and universities are helping accelerate this process, such as the case with IIT Madras Research Park and Technische Universität (TU) Berlin. All of this is taking place alongside enhanced engagement with climate funds and export credit agencies to support outward scaling.
As of 2025, India is entering an exciting yet uniquely challenging phase in its history with a once-in-a-generation opportunity to lead by example. The green industrial revolution will not have a one-size-fits-all model. Instead, the future of the energy sector will be defined by adaptable innovation. As India transitions to a low-carbon economy, defining a new model for the nation and industries in alignment with net zero, startups that focus on local solutions can create globally applicable models that accelerate growth that benefits both people and the planet.
