Decarbonization in India Trends and Forecast
The future of the decarbonization market in India looks promising with opportunities in the oil & gas, energy & utility, agriculture, government, automotive & transportation, aerospace & defense, and manufacturing markets. The global decarbonization market is expected to grow with a CAGR of 11.8% from 2025 to 2031. The decarbonization market in India is also forecasted to witness strong growth over the forecast period. The major drivers for this market are the increasing investment in decarbonization technologies to reduce costs associated with carbon emissions, the growing awareness of the effects of climate change, and the stricter emissions standards across the world.
• Lucintel forecasts that, within the services category, the sustainable transportation service segment will remain the largest segment over the forecast period.
• Within the end use category, oil & gas will remain the largest segment.
Emerging Trends in the Decarbonization Market in India
India is rapidly progressing towards its decarbonization goals, driven by its increasing energy demands and commitment to reducing greenhouse gas emissions. As the world’s third-largest emitter, India is working towards significant emissions reductions in the coming decades while simultaneously supporting economic growth. The decarbonization market is witnessing notable trends across renewable energy, electric mobility, green hydrogen, and energy efficiency. These trends are reshaping industries and driving innovation in clean technologies, creating new growth opportunities while tackling India’s pressing environmental and energy challenges.
• Expansion of Renewable Energy: India has become a global leader in renewable energy capacity, particularly in solar and wind energy. The country aims to meet its climate targets by achieving 500 GW of non-fossil fuel capacity by 2030. Large-scale investments in renewable energy infrastructure, coupled with supportive government policies, are accelerating this transition. As renewable energy becomes more affordable and accessible, it will help reduce India’s dependence on coal and other fossil fuels, thus driving down emissions and creating cleaner energy for the nation.
• Growth of Electric Mobility: The electrification of transportation is gaining momentum in India, with electric vehicles (EVs) being promoted through various incentives, such as subsidies and tax exemptions. The Indian government has introduced initiatives like the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme to support EV adoption. Expanding EV infrastructure and lowering battery costs are key factors driving this shift. This trend has the potential to reduce carbon emissions significantly in the transport sector, contributing to cleaner air and reducing reliance on imported oil.
• Green Hydrogen Development: Green hydrogen is emerging as a key component of India’s decarbonization strategy, with the government setting ambitious targets for hydrogen production using renewable energy. Green hydrogen is seen as essential for decarbonizing hard-to-abate sectors such as steel, cement, and heavy transport. As India builds hydrogen production and storage infrastructure, the sector is attracting investment from both the public and private sectors. This emerging market promises to diversify India’s energy mix, enhance energy security, and provide economic opportunities in the production and export of hydrogen.
• Energy Efficiency Initiatives: Energy efficiency is becoming a central focus in India’s decarbonization market, especially in industries, buildings, and transport sectors. The government’s Perform, Achieve, and Trade (PAT) scheme, along with other efficiency programs, aims to reduce energy consumption. Initiatives like star ratings for appliances, energy-efficient building codes, and the adoption of smart grids are driving energy savings. By improving energy efficiency, India can reduce its emissions while also addressing rising energy demand, ensuring that resources are used optimally, and helping industries remain competitive in the global market.
• Circular Economy Adoption: India is increasingly adopting circular economy practices to reduce waste, improve resource efficiency, and minimize emissions. The growing emphasis on recycling, reusing materials, and reducing the carbon footprint of manufacturing is gaining traction. India is making strides in sectors such as plastic waste management and electronic waste recycling. Circular economy initiatives are creating new business opportunities in recycling technologies and sustainable product design.
By reducing waste and minimizing the need for raw materials, this trend supports India’s broader decarbonization objectives and sustainable growth.
Recent Developments in the Decarbonization Market in India
India’s decarbonization efforts have made significant progress, particularly in renewable energy deployment, electric mobility, and energy efficiency improvements. The Indian government has introduced several ambitious plans and policies to achieve its climate goals. Key developments in the decarbonization market indicate a shift towards cleaner, sustainable energy sources, with growing investments in green technologies. These developments are reshaping the energy, transportation, and manufacturing sectors and aligning India’s economy with global sustainability standards.
• Commitment to Renewable Energy Targets: India has committed to achieving 500 GW of non-fossil fuel energy capacity by 2030, a critical milestone in its journey towards a low-carbon economy. The country has become one of the world’s largest producers of solar power and is actively expanding its wind energy capacity. To support these efforts, India is developing renewable energy parks and improving grid connectivity. This development is central to India’s decarbonization strategy, reducing its reliance on coal, lowering emissions, and creating a cleaner energy future.
• Electric Vehicle Policy and Incentives: India has launched several initiatives to promote electric vehicle adoption, including the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) scheme, which provides financial incentives to buyers and manufacturers. Furthermore, state governments have introduced their own EV policies, aiming to create a more extensive charging infrastructure and reduce the upfront cost of EVs. These developments will drive the growth of India’s electric mobility sector, contributing to a reduction in transportation-related emissions and reducing the country’s dependence on fossil fuels.
• Green Hydrogen Mission: India has announced a National Green Hydrogen Mission aimed at making the country a global hub for hydrogen production and exports. The government plans to produce green hydrogen from renewable energy sources, with a target to scale up production and use across industries, particularly for decarbonizing hard-to-abate sectors. This development positions India as a leader in the emerging green hydrogen market and contributes to its long-term decarbonization goals, potentially enhancing energy security and creating new export opportunities for clean energy.
• Energy Efficiency Measures: India’s government has introduced various energy efficiency measures, including the Perform, Achieve, and Trade (PAT) scheme, which aims to improve energy performance in energy-intensive industries. The adoption of energy-efficient appliances, industrial processes, and the promotion of smart grids are also key elements of India’s decarbonization strategy. These measures are helping businesses reduce energy consumption and costs while lowering their carbon footprints, and are essential to managing the country’s rapidly growing energy demand.
• Circular Economy Policies and Initiatives: India is focusing on implementing circular economy policies to reduce waste and optimize resource use. Efforts include improving waste segregation, recycling, and the reduction of plastic waste through regulatory measures. India’s electronic waste recycling industry is also gaining traction, with new regulations being introduced to ensure responsible disposal of electronic products.
These initiatives contribute to decarbonization by minimizing resource extraction, reducing carbon emissions, and promoting the sustainable use of materials.
Strategic Growth Opportunities for Decarbonization Market in India
India’s decarbonization market presents numerous growth opportunities across various sectors, driven by the country’s ambitious climate targets and the rapid adoption of clean technologies. These opportunities span renewable energy, electric mobility, green hydrogen, energy efficiency, and circular economy practices. As India moves towards a low-carbon future, new business models, technologies, and markets are emerging, creating jobs, promoting sustainable growth, and contributing to global sustainability goals.
• Renewable Energy Expansion: India’s renewable energy sector offers substantial growth opportunities, particularly in solar, wind, and hydropower. With the government’s ambitious targets for non-fossil fuel energy capacity, investments in renewable energy infrastructure are increasing. Opportunities exist in solar and wind power generation, battery storage, and grid modernization. As renewable energy becomes more affordable, India is poised to attract significant investments, creating new businesses and employment opportunities while reducing reliance on fossil fuels.
• Electric Vehicle Industry: The electric vehicle market in India is experiencing rapid growth, spurred by government policies, subsidies, and the growing demand for cleaner transportation. Opportunities exist in EV manufacturing, battery production, charging infrastructure, and vehicle recycling. The rise of electric mobility will drive the growth of new technologies and business models, providing opportunities for both domestic and international companies. India’s EV market is set to be one of the largest in the world, offering immense potential for businesses involved in the sector.
• Green Hydrogen Economy: India’s green hydrogen economy presents a significant growth opportunity, particularly in the heavy industry and transportation sectors. As part of its National Green Hydrogen Mission, the country is investing in hydrogen production, storage, and transportation infrastructure. This emerging market will create new opportunities in hydrogen production from renewable sources, fuel cell technologies, and related services. Green hydrogen will be essential in decarbonizing industries such as steel, cement, and chemicals, offering vast potential for growth and innovation.
• Energy Efficiency Solutions: The drive for energy efficiency in India presents numerous growth opportunities in sectors such as industrial processes, buildings, and transportation. With government programs like the Perform, Achieve, and Trade (PAT) scheme, businesses are incentivized to adopt energy-efficient technologies and practices. Opportunities lie in the development of energy-efficient products, services, and smart grid solutions, as well as the optimization of energy use across sectors. Energy efficiency is a cost-effective way to reduce emissions and drive sustainability, presenting a significant business opportunity.
• Circular Economy and Waste Management: India’s circular economy initiatives are creating new growth opportunities in waste management, recycling, and sustainable product design. Policies focusing on reducing plastic waste, improving resource efficiency, and promoting recycling are opening up new markets for businesses offering sustainable solutions. Innovations in waste management technologies and sustainable material alternatives will help businesses reduce their carbon footprints and create value from waste.
As circular economy practices become more widespread, India will see new business opportunities in sustainable product development and waste management.
Decarbonization Market in India Driver and Challenges
India’s decarbonization market is influenced by a combination of technological, economic, and regulatory drivers and challenges. The country’s large population, rapid industrialization, and significant energy demand are key factors influencing the pace and scale of its transition. While India’s commitment to climate goals and its focus on clean technologies provide a strong foundation, there are also substantial challenges related to financing, infrastructure, and political will that must be overcome for successful decarbonization.
The factors responsible for driving the decarbonization market in India include:
• Government Policies and Targets: India’s decarbonization efforts are driven by a strong policy framework, including ambitious targets for renewable energy capacity, electric vehicle adoption, and emissions reductions. Policies such as the National Action Plan on Climate Change (NAPCC) and the National Green Hydrogen Mission are shaping the country’s low-carbon future. These policies create a clear roadmap for clean energy development and signal India’s commitment to achieving global climate goals, driving investments in renewable energy, electric mobility, and other sustainable sectors.
• Technological Innovation: Advances in renewable energy, electric mobility, and energy storage technologies are central to India’s decarbonization journey. The country is investing in emerging technologies like green hydrogen and smart grids to improve energy efficiency and decarbonize industries. Technological innovation is lowering the cost of clean technologies, making them more accessible and affordable. India’s rapidly growing digital and manufacturing sectors also provide a strong foundation for the adoption of smart technologies that support sustainability and reduce emissions.
• International Climate Commitments: India’s participation in international climate agreements, such as the Paris Agreement, is a major driver for its decarbonization efforts. By committing to reducing emissions intensity and expanding renewable energy capacity, India is aligning its national goals with global sustainability targets. This commitment enhances India’s credibility as a global leader in decarbonization and attracts international investment in clean technologies, further accelerating the shift to a low-carbon economy.
• Public Awareness and Consumer Demand: Growing awareness among the Indian public about climate change and the need for sustainability is driving demand for clean products and services. Consumers are increasingly seeking energy-efficient appliances, electric vehicles, and sustainable products, which is encouraging businesses to invest in greener technologies. This trend is creating a market for low-carbon solutions and accelerating India’s transition to a cleaner, more sustainable economy.
• Private Sector Investment: India’s decarbonization market is benefiting from increasing private sector investment in clean energy technologies. Both domestic and international investors are recognizing the potential for growth in India’s green economy. Public-private partnerships are playing a crucial role in financing renewable energy projects, electric vehicle infrastructure, and energy efficiency initiatives. As private sector involvement grows, India’s decarbonization market is set to expand rapidly.
Challenges in the decarbonization market in India are:
• High Initial Investment Costs: The high upfront costs associated with renewable energy infrastructure, electric vehicles, and green hydrogen technologies are a significant challenge. While operational costs are lower, the capital required for scaling these technologies can be prohibitive, particularly for small and medium-sized enterprises (SMEs). Securing financing for decarbonization projects remains a challenge, especially for sectors that require large capital investments.
• Infrastructure Limitations: India’s existing infrastructure is not fully prepared to accommodate large-scale renewable energy generation, electric mobility, and energy efficiency improvements. Upgrading the energy grid, building EV charging infrastructure, and developing energy storage solutions are key challenges. These upgrades require significant investment and time, which could slow the pace of decarbonization.
• Regulatory and Policy Uncertainty: Uncertainty in regulatory and policy frameworks can create challenges for businesses and investors in the decarbonization market. Changes in government policies, shifting priorities, and delays in implementation can disrupt market growth. Clear and consistent policies are needed to provide stability and encourage long-term investments in clean technologies.
India’s decarbonization market is being reshaped by strong government support, technological innovation, and increasing public demand for sustainability. While the country faces challenges related to infrastructure, financing, and regulatory uncertainty, the opportunities for growth in renewable energy, electric mobility, green hydrogen, and circular economy practices are significant. With continued investment and collaboration across sectors, India is well-positioned to achieve its climate goals and become a global leader in decarbonization.
List of Decarbonization Market in India Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, decarbonization companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the decarbonization companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10
Decarbonization Market in India by Segment
The study includes a forecast for the decarbonization market in India by services, technology, deployment, and end use.
Decarbonization Market in India by Services [Analysis by Value from 2019 to 2031]:
• Carbon Accounting & Reporting Services
• Sustainable Transportation Services
• Waste Reduction & Circular Economy Services
Decarbonization Market in India by Technology [Analysis by Value from 2019 to 2031]:
• Renewable Energy Technologies
• Energy Efficiency Solutions
• Electric Vehicles
• Carbon Removal Technologies
• Carbon Capture and Storage
Decarbonization Market in India by Deployment [Analysis by Value from 2019 to 2031]:
• On-premises
• Cloud
Decarbonization Market in India by End Use [Analysis by Value from 2019 to 2031]:
• Oil & Gas
• Energy & Utility
• Agriculture
• Government
• Automotive & Transportation
• Aerospace & Defense
• Manufacturing
• Others
Features of the Decarbonization Market in India
Market Size Estimates: Decarbonization in India market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Decarbonization in India market size by services, technology, deployment, and end use in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different services, technology, deployment, and end use for the decarbonization in India.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the decarbonization in India.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.
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FAQ
Q1. What are the major drivers influencing the growth of the decarbonization marketin India?
Answer: The major drivers for this market are increasing investment in decarbonization technologies to reduce costs associated with carbon emissions, growing awareness of the effects of climate change, and stricter emissions standards across the world.
Q2. What are the major segments for decarbonization market in India?
Answer: The future of the decarbonization market in India looks promising with opportunities in the oil & gas, energy & utility, agriculture, government, automotive & transportation, aerospace & defense, and manufacturing markets.
Q3. Which decarbonization market segment in India will be the largest in future?
Answer: Lucintel forecasts that sustainable transportation service segment will remain the largest segment over the forecast period.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 10 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the decarbonization market in India by services (carbon accounting & reporting services, sustainable transportation services, and waste reduction & circular economy services), technology (renewable energy technologies, energy efficiency solutions, electric vehicles, carbon removal technologies, and carbon capture and storage), deployment (on-premises and cloud), and end use (oil & gas, energy & utility, agriculture, government, automotive & transportation, aerospace & defense, manufacturing, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?