Ajay Shankar, Distinguished Fellow at The Energy and Resources Institute and former Secretary, Department of Industrial Policy and Promotion (DIPP), Government of India, on the sidelines of the launch of his newly authored book, spoke in an exclusive conversation with Nijhum Rudra of Elets News Network (ENN). He shared insights on opportunities in clean power, mobility, and green hydrogen, while also acknowledging the challenges faced by hard-to-abate industries. He discussed the book at length, outlining its various dimensions and explaining how it presents a bold yet pragmatic blueprint for India to emerge as a global leader in the clean-energy economy.

Edited by: Abhineet Kumar | Elets News Network

India’s energy transition is often described as both ambitious and complex. What new perspectives or evidence does your book bring that challenge existing assumptions about India’s path to net zero?

The book makes two major arguments. First, it is important to map multiple pathways to net zero and identify the least-cost option, and then examine the policy choices that would enable India to follow that pathway. Second, it focuses on how public policy and state programmes can reduce the risk perception of private investment and provide sufficient confidence on returns, so that private capital can participate competitively in the journey to net zero. Market forces alone will not take us to net zero, nor are they doing so today. The key question, therefore, is how state policy can creatively mobilise private investment within a competitive framework to move towards net zero.

The book challenges the assumption that India must follow the same expensive, subsidy-heavy path adopted by many developed countries. Instead, it demonstrates that a carefully designed mix of de-risking instruments, competitive auctions, and smart regulation can significantly reduce the cost of capital and make the transition affordable. It also highlights that India’s young and expanding economy offers a unique advantage, namely the ability to build a new system rather than retrofit an old one.

The book highlights sectoral transformation across power, industry, and mobility. Which sector, according to your research, poses the toughest implementation challenge, and why?

One segment of the transition is relatively straightforward in terms of technology and costs, namely a carbon-free electricity system and 100 per cent electric mobility. These are both achievable and affordable, and policy choices will determine the pace at which we get there. Together, they account for roughly half of India’s carbon emissions.

The more difficult challenge lies in industrial emissions and hard-to-abate sectors. Here, India actually has an advantage. With the launch of the National Green Hydrogen Mission, we are broadly on par with advanced industrial economies in addressing this problem. With the right policies, India can aim to be at the global frontier in deployment, technological mastery, and cost competitiveness within the next five to eight years.

Once pilot projects are completed and cost discovery has taken place, it will be possible to make informed decisions on sectoral prioritisation, financing mechanisms, subsidies, cost pass-through, and cost reduction strategies. Unlike power and transport, these sectors do not yet have a single drop-in solution. They involve complex value chains, evolving technologies, high capital costs, and uncertain offtake markets. This is why the book strongly advocates large-scale pilots and cost discovery before committing substantial public and private capital to any single technology or sector.

You spoke about green hydrogen for downstream investments. Do you believe green hydrogen is less important today compared to solar, or is it still evolving, or merely a buzzword?

Green hydrogen is critically important today. It enables downstream production with zero or near-zero carbon emissions. We need to implement pilot projects and position ourselves at the global frontier in cost competitiveness, technological mastery, and innovation. This will allow India to become a globally competitive producer of downstream products, such as steel, fertilisers, ammonia, and chemicals, with minimal carbon footprints.

Green hydrogen is not a buzzword. It is currently the only scalable pathway to decarbonise heavy industry and long-distance transport. Given India’s vast renewable energy potential, we have the opportunity to produce some of the world’s lowest-cost green hydrogen if we move decisively. The success of the first few large projects over the next four to five years will determine whether India becomes a global exporter of green molecules.

From the first page to the last, what are the key messages your book conveys to industry and government?

The core message is to combine ambition with confidence and creative thinking. India does not need to apologise for its emissions or rely on others for solutions. We can lead if we are determined. Government and industry must function as partners rather than adversaries. The government’s role is to de-risk, while industry competes and innovates. Finally, speed is more important than perfection. Early action by first movers will help bring costs down more rapidly for everyone.

India’s manufacturing capabilities are expanding. Do you believe that within the next 20 years, India can challenge or come close to China?

Predicting the future is difficult, but the ambition should be to begin closing the gap, and that is certainly achievable. The pace at which we do so will depend on policy choices and the collective efforts of stakeholders, including Indian firms, institutions, and young talent. China had a significant head start and extensive state support, but many clean-energy technologies are still at an early stage of development. With a stable, predictable, and competitive ecosystem, Indian companies and talent can move very quickly. Twenty years is a long period in technology, as demonstrated by the evolution of solar and battery technologies since 2005.

What role do states and local governments play in accelerating the transition? Does the book identify policy models or success stories at the state level?

India is well positioned because there is broad consensus across political parties and states that the energy transition is beneficial and must be pursued earnestly. States are already experimenting with innovative policies. While this book does not go into detailed state-level case studies, many macro-level policy decisions can be implemented at the state level, and several states are already doing so.

Since land, power tariffs, ease of doing business, and charging infrastructure fall largely within state jurisdiction, proactive states can secure a strong first-mover advantage. Healthy competition among states is one of India’s greatest strengths in this transition.

Is there a specific policy change or regulatory focus you would like to highlight for the central government?

The most critical priority, which is already recognised by the central government, is domestic manufacturing of clean-energy equipment. Excessive dependence on imports for batteries, solar panels, and other critical equipment creates strategic vulnerabilities, limits domestic value addition, and exposes the economy to supply-chain disruptions.

A focused, time-bound mission to build domestic manufacturing capacity, supported by clear policies, is essential. China is the cheapest producer in the world. To make domestic manufacturing competitive, a robust industry structure is required, along with a willingness to pay higher prices until Indian firms achieve low-cost manufacturing capabilities. The book suggests that the government should undertake competitive procurement with stipulations for domestic value addition to create manufacturing capacity. Repeated bidding processes would enable firms to learn, innovate and progressively reduce costs.

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