Economic Times17.06.2026Business4 dk okumaIndia

India's Energy Self-Sufficiency: A Decade-Long Investment Theme

energy self-sufficiency electrification solar power

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India's energy self-sufficiency is a key investment theme for the next decade, driven by electrification to reduce import dependence.
Experts focus on solar, storage, nuclear, and transmission infrastructure.
EVs face rare-earth challenges, spurring innovation.

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India's energy self-sufficiency is a decade-long investment theme driven by aggressive electrification to reduce import dependence. Experts highlight solar, storage, and nuclear power, alongside transmission infrastructure.

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India's energy self-sufficiency will be one of the defining investment themes of the next decade, according to Nilesh Shah, Group President and Managing Director at Kotak Mahindra Asset Management, who told a wealth summit panel that the recent oil price shock has exposed vulnerabilities the country must now address through aggressive electrification.

Speaking at ET Alpha Wealth Summit panel discussion on the topic 'Global or Local? The New Allocation Reality', Shah said the current energy crisis, while painful, is far less severe than the 1990 crisis that forced India to pledge its gold reserves. But the episode has reinforced the case for reducing import dependence — and that, he argued, is a multi-year theme rather than a one-or-two-year trade.

Other than Shah, Rajeev Thakkar, Chief Investment Officer and Director at PPFAS Asset Management and Rajesh Saluja, Co-Founder, CEO & MD, ASK Private Wealth were also part of the panel discussion.

Solar, storage and the power mix

Shah laid out a roadmap built around four power sources where India is largely self-sufficient: solar, solar rooftop, thermal and nuclear. He noted that India already produces more power than it needs during daytime hours, meaning further solar capacity will require complementary investment in pump storage and battery storage solutions to manage the surplus.

Geography adds another layer, he said. Because most solar generation is concentrated in western India, the buildout will also require significant investment in transmission infrastructure and transformers to move that power across the country, while nuclear and thermal energy continue to rely on their own established vendor ecosystems.

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The rare-earth bottleneck

Generating power is only half the equation, Shah said — using it efficiently is the other. He pointed to the shift from petrol and diesel engines to electric and hybrid vehicles as a critical next step, but flagged a strategic risk: replacing oil dependence on the West with a new dependence on the North, given that rare earth materials needed for electric motors are concentrated there.

In response, he said, Indian companies are pursuing two parallel paths — developing rare-earth-free electric motor technology, with three domestic companies already working on it, and exploring mining options. Shah also pointed to the gradual shift from LPG to piped natural gas (PNG) and induction cooking, while cautioning that induction technology will need further refinement to address health hazard concerns before wider adoption.

AI as the other side of the coin

Alongside electrification, Shah highlighted artificial intelligence as a starkly different but equally significant opportunity, even though India currently has relatively few pure-play AI companies. He recounted a conversation with an entrepreneur who described AI as democratizing access to knowledge once confined to institutions like MIT, Stanford and Harvard — compressing R&D timelines and accelerating product development for companies that previously couldn't compete with global players holding dominant market share.

Shah was candid that such ambitions may or may not succeed, but said the willingness of entrepreneurs to think at that scale is itself a signal worth watching. He framed electrification and AI as opposite ends of the same opportunity spectrum — one driven by large-scale infrastructure buildout, the other by bottom-up technological leapfrogging — and said investors have meaningful opportunities across both.

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India will significantly reduce import dependence through electrification over the next decade.
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Domestic innovation in rare-earth-free electric motor technology will advance.
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