GST Reform Fuels India's Clean Energy Ambitions
India's GST rationalisation will accelerate its clean energy transition, potentially saving up to Rs 1.5 lakh crore by 2030. By reducing GST from 12% to 5%, costs of projects and equipment are lowered, benefiting households, farms, and industries, while supporting solar manufacturing and reducing CO2 emissions.
- Country:
- India
The Indian government's decision to rationalize GST rates, reducing them from 12% to 5% across the renewable energy sector, is poised to significantly accelerate the country's transition to clean energy. By lowering project costs, the reform is expected to enable India to add 300 GW of renewable energy capacity by 2030, potentially saving up to Rs 1.5 lakh crore in investment.
This move will make electricity more affordable, benefiting millions of households, farmers, and industries. For example, the cost of a typical 3 kW rooftop solar system is set to decrease by up to Rs 10,500, while farmers using solar pumps under the PM-KUSUM scheme could collectively save Rs 1,750 crore. The reform also supports domestic manufacturing, aligning with the Make in India initiative by reducing component costs, thus enhancing the competitiveness of Indian-made renewable energy equipment.
In addition to financial benefits, the GST reduction is expected to decrease India's carbon footprint by avoiding 50 to 70 million tonnes of CO2 emissions annually by 2030. This aligns with India's commitments under the Paris Agreement and reinforces its goal of 500 GW of non-fossil fuel capacity, establishing the nation as a leader in global climate change mitigation efforts.
(With inputs from agencies.)
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