Our rating is based on a combination of project pipeline, political and policy support, investor confidence and structural readiness of the country in terms of grid infrastructure, permitting process and local supply chain.
Estimate of installed and operating wind power capacity based on the latest statisitics and measured against the Windpower Intelligence database.
India's wind market has experienced phenomenal growth in the past decade. Since the National Action Plan on Climate Change in 2008 set a target of 60GW of wind capacity by 2022, the market has seen fairly consistent growth.
However, the sudden shift from feed-in-tariffs to reverse auctions in early 2017 changed the market dynamics significantly. Overnight, small investors were locked out and a new breed of power producers, many with overseas funding, entered the wind sector, leading to consolidation and a number of smaller players exiting the sector.
While successfully opening up the market for development — India has awarded bids for 12GW of capacity since 2017 — the auctions also brought in significant price pressures for turbine manufacturers and developers. Coupled with other challenges including delays in land allocation by states, unavailability of grid infrastructure and long procedural formalities, this has strained the financial and operational wellbeing of the ecosystem and led to delayed project deployment.
While the government remains supportive of wind energy, it insists on very low ceiling prices for auctions, and some states continue to display temperamental behaviour towards wind power projects. The financial health of the two major players in India, Suzlon Energy and Inox Wind, is also a cause for concern.
Despite these challenges, India looks set to become a top global player. The major OEMs have nearly 10GW of manufacturing capacity located in India and are betting on the market in the long term.
The government's announcement of 70GW offshore potential and its intent to develop 5GW offshore wind by 2022, although out of reach for now, suggests that the country has much more to offer in the years to come.