India’s Quiet Power Shift: How Electrification Is Redefining Development

• India is electrifying faster than China did at similar income levels, challenging traditional development models.

• Per-capita fossil fuel use remains far lower despite rising energy demand.

• Cheaper solar, batteries, and EVs are accelerating India’s shift.

• Electrification is driven by economics and energy security, not climate goals alone.

• China’s manufacturing dominance poses both risks and incentives for India to build domestic capacity.

China’s swift transition toward electric power has long been described as extraordinary. Yet new analysis suggests that India may be moving even faster—at least when viewed through the lens of economic development and energy use.

According to a recent report from the energy think tank Ember, India is expanding electricity use and limiting reliance on fossil fuels more aggressively than China did when the two countries were at comparable income levels. The findings challenge the long-held belief that emerging economies must pass through a fossil-fuel-heavy phase before reaching cleaner forms of energy.

“This goes against the conventional storyline that developing nations have to follow the same progression as Western countries and China—starting with biomass and then shifting to coal, oil, and gas,” said Kingsmill Bond, an Ember strategist and co-author of the report.

To make a meaningful comparison, Ember adjusted gross domestic product figures for purchasing power, aligning India’s current per-capita income—about $11,000—with China’s level in 2012. This approach allowed researchers to examine how each country’s energy system evolved at a similar stage of development.

The picture that emerges is complex. India is rapidly adding renewable electricity, yet fossil fuels remain central to its energy mix. Policymakers are weighing proposals that could double coal-fired power capacity by 2047, and India’s oil demand growth recently exceeded China’s. Still, when measured per person, India’s coal and oil consumption remains far below what China used at a comparable income level. Even in total terms, India’s fossil-fuel use is increasing more slowly than China’s does today.

One key reason is cost. India is benefiting from far cheaper access to technologies such as solar panels, batteries, and electric vehicles than China had a decade ago. Massive Chinese investment drove down global prices for these so-called modular technologies, where each unit produced leads to efficiency gains in the next.

That dynamic is already reshaping India’s transport sector. Electric vehicles accounted for roughly 5% of new car sales in 2024. At the same point in its transition, China consumed about 60% more oil per person for road transport than India does now. Bond believes this gap means India’s per-capita demand for road oil may never reach China’s peak levels.

Ember’s researchers argue that countries like India—especially those without large domestic reserves of coal, oil, or gas—are likely to evolve into what they call “electrostates.” In such systems, most energy demand would be met through electricity generated from clean sources. No nation has fully reached that stage yet, Bond noted, but the trend is becoming more pronounced as renewable technologies continue to get cheaper.

For economies even less developed than India, the advantages could be greater still. Falling costs for solar power, electric vehicles, batteries, and critical minerals make electricity-based growth increasingly accessible.

Climate goals are not the primary driver behind this shift, Bond emphasized. The motivation is largely economic. India imports more than 40% of its primary energy—mainly coal, oil, and gas—according to the International Energy Agency. Reducing that dependence is seen as essential for long-term growth and energy security.

“To expand while gaining energy independence, India has to ease the massive burden of fossil-fuel imports that cost around $150 billion every year,” Bond said. “That means finding alternatives.”

Those alternatives, however, come with complications. China currently dominates global manufacturing of many electric technologies, creating potential chokepoints for other countries. Beijing has already used its position strategically, including in trade negotiations involving rare earth elements. Chinese firms also control much of the specialized equipment needed to build new manufacturing capacity elsewhere.

This dependence has already had tangible effects. Earlier this month, Reliance Industries Ltd. suspended plans to produce lithium-ion battery cells in India after failing to secure key equipment from China.

Bond acknowledged that rising trade tensions could slow the pace of electrification worldwide. At the same time, he said, efforts by countries like India to build domestic manufacturing capabilities—without total reliance on Chinese suppliers—could accelerate the transition.

As the United States and Europe increasingly restrict imports tied to Chinese electric technology, nations such as India may find stronger incentives to invest at home. “We may be at the high-water mark of China’s dominance in electric technologies,” Bond said, “as other countries begin to recognize that this is what the future of energy looks like.”