As India works towards its Viksit Bharat @2047 vision, the ambition to become a developed economy will depend in part on whether the country can turn its clean energy research into the technologies, manufacturing expertise and industrial capacity needed to power its transition. But along with sits the the Department of Science and Technology’s Research & Development Statistics 2025–26 where India’s gross R&D expenditure at ₹2.45 lakh crore in 2023–24, equivalent to 0.84% of GDP. Private-sector spending contributed 51.8% of the total that year, overtaking the government sector’s 48.2% share.

A study by the Sustainable Futures Collaborative (SFC) and the Climate Policy Lab at Tufts University has mapped 1,359 publicly funded clean energy research, development and demonstration projects across more than 90 institutions between 2019 and 2024. The projects account for approximately ₹1,443 crore in declared funding.

The study found that 81% of the projects focused on improving or adapting technologies already in commercial use, while 67% concentrated on products rather than manufacturing processes. Research into manufacturing processes accounted for about a third of projects but received only a fifth of the declared spending. India’s clean energy industrial policy now focuses on the question on how much public research funding is helping the country develop the capabilities needed to manufacture its own technologies, rather than primarily improving products that already exist?

Solar Manufacturing Exposes the Research Challenge

India’s solar industry illustrates why that question matters. Manufacturing capacity has grown rapidly, but capacity to produce solar modules and the cells inside them has developed at different rates. An analysis by the Council on Energy, Environment and Water (CEEW) estimated India’s solar module manufacturing capacity at 173 gigawatts, compared with approximately 30 gigawatts of solar cell manufacturing capacity. The difference means that the industry remains dependent on imported cells for a substantial share of its module production.

According to CEEW, around 80% of India’s module manufacturing capacity would depend on imported solar cells, primarily from China, based on the capacities assessed in its study. Solar cells are also a major component of module costs, accounting for nearly 60% of the cost of a solar module, according to the analysis.

This gap illustrates the difference between expanding assembly capacity and developing a more integrated manufacturing supply chain. Domestic cell production requires technological expertise, specialised equipment and the ability to manufacture increasingly efficient cells at competitive costs.

The SFC–Tufts study found that solar photovoltaic research received ₹401 crore, making it the largest individual technology category in the publicly funded research portfolio. That was more than the combined funding allocated to hydrogen, energy efficiency, transport and carbon capture, utilisation and storage.

The concentration of funding in solar does not, by itself, establish that the allocation is misplaced. The research portfolio also covers different stages of technological development. The concern raised by the study is whether the overall balance of funding adequately supports manufacturing capability alongside deployment and product development.

Battery Manufacturing Shows the Cost of Capability Gaps

India’s battery industry faces a related challenge. The government approved a production-linked incentive scheme in 2021 with an outlay of ₹18,100 crore to establish 50 gigawatt-hours of domestic advanced chemistry cell manufacturing capacity.

A February 2026 response by the Ministry of Heavy Industries to Parliament reported that 40 GWh of capacity had been awarded to four beneficiary companies. However, only 1 GWh of manufacturing capacity had been installed under the scheme as of the end of December 2025. The ministry said domestic demand for advanced chemistry cells continued to be met largely through imports.

The ministry identified several implementation challenges, including limited technology availability, shortages of skilled workers, dependence on imported machinery and the lack of upstream components such as cathode and anode active materials and electrolytes.

These constraints help explain why manufacturing ambitions require a supporting research and technology ecosystem. Building a battery factory involves more than securing investment and installing production lines. Manufacturers also need access to cell technologies, materials, specialised equipment and technical expertise.

Small Grants Dominate Public Research Funding

Another problem is that the funding structure is dominated by relatively small grants. Around 68% of the projects received less than ₹50 lakh each, while the median grant size varied little across technology areas, ranging from ₹33 lakh to ₹39 lakh.

The Department of Science and Technology funded just over half of the projects, largely through numerous small grants. The Ministry of New and Renewable Energy supported a smaller number of substantially larger programmes. The 20 institutions with the highest project counts accounted for 68% of all projects.

Small grants can support early-stage research, enable researchers to test ideas and allow institutions to explore different technological approaches. The study does not assess whether individual grants produced useful results or whether their size was appropriate for their objectives.

Its concern is about the combined portfolio. The available public record does not reveal an explicit strategy connecting the distribution of research funding with India’s broader priorities for clean energy deployment, manufacturing and technological leadership.

The researchers therefore raise a question about the purpose of the funding system: should public investment maintain a broad range of exploratory research, or should a greater share be directed towards selected technological capabilities that are important to India’s industrial ambitions?

The answer would influence how research programmes are designed, how funding is distributed and how progress is assessed. Manufacturing-oriented research, for instance, may require different funding scales and longer development periods than projects focused on incremental improvements to existing products.

Clean Energy Research: Wider Strategy for Innovation

India has introduced manufacturing incentives to expand domestic production of solar modules and advanced chemistry cells. These programmes demonstrate that industrial capacity is already a policy priority. The research study examines a different part of the same challenge: whether public research investment is organised to help develop the technologies and production capabilities those industries need.

The distinction matters because manufacturing capacity figures alone do not establish how much technological value is being created domestically. A country can expand final-product manufacturing while remaining dependent on imported cells, components, machinery or materials.

The report calls for greater alignment between clean energy research and India’s manufacturing and deployment ambitions. Such alignment would require a clearer view of which capabilities India already possesses, where critical gaps remain and how public research funding can help address them.

The study also has important limits. It relies on publicly available disclosures, with budget information missing for around 16% of projects and start years missing for 39%. Private-sector research—which the report says accounts for roughly half of India’s national research and development spending—is not captured. Demonstration projects and industry-linked research may also be underrepresented.

The database is therefore a substantial mapping of publicly visible research activity, rather than a complete account of India’s clean energy innovation system or an assessment of the outcomes of individual projects. Its central finding is about coordination. India has set ambitious goals for clean energy deployment and domestic manufacturing, but the public record does not yet show clearly how the country’s research investments add up to a strategy for achieving both.

India accounted for 5.7% of global greenfield investment between 2020 and 2025, more than twice China’s 2.8% share, even as investment in strategically important industries remained concentrated in Europe and North America. The figures highlight India’s position as a major destination for new investment while exposing the wider challenge facing developing economies seeking a larger role in emerging technology and energy supply chains.

The findings, reported in the United Nations Conference on Trade and Development (UNCTAD)’s latest investment analysis, come amid a shift in global capital towards artificial intelligence (AI) infrastructure, semiconductors and energy-transition technologies. These sectors accounted for 44% of global greenfield investment in 2025, compared with 16% in 2020. UNCTAD’s July 2026 analysis identifies the shift as a significant change in the direction of international investment.

India Leads Among the Listed Asian Economies

India accounted for the largest share of global greenfield investment among the Asian economies listed in the report, followed by Malaysia at 4%, Indonesia at 3.8% and China at 2.8%.

Greenfield investment involves establishing new operations in another country, such as a factory, data centre or manufacturing facility. Unlike an acquisition, which transfers ownership of an existing business, a greenfield project can create new productive capacity, although its effects on jobs, domestic suppliers and technology transfer depend on how the project is developed.

India’s 5.7% share is therefore a measure of its participation in new investment projects, rather than a direct measure of jobs created, technology acquired or investment actually realised. Announced project values and completed investments can differ.

AI Infrastructure Attracts the Largest Share

The changing composition of investment is as significant as its geographical distribution. According to the figures cited in the report, global greenfield investment totalled $845.7 billion over 2020–2025. AI infrastructure and related technologies attracted the largest share, at 12.4%, followed by the semiconductor value chain at 8.1% and energy-transition technologies and services at 7.8%.

The shift reflects the capital requirements of the digital economy, from data centres and computing infrastructure to the chips that power AI systems. Energy-transition technologies represent another strategically important area as economies invest in technologies and services associated with changing energy systems.

These industries can shape future manufacturing capacity, technology development and supply-chain relationships. Attracting investment into them can offer host countries opportunities to build industrial capabilities, but the benefits depend on whether domestic businesses, workers and research institutions become part of the value chain.

Europe and North America Retain Their Advantage

Despite the growing participation of Asian economies, strategic investment remains concentrated in a limited number of regions. Europe accounted for 28.4% of strategic investment during 2020–2025, while North America captured another 28%, according to the reported figures. Developing Asia accounted for 26.5% among developing economies, with China, India, Indonesia, Malaysia and Singapore identified as leading destinations for new investment.

The distribution points to an important distinction: a country can attract a substantial share of new investment without having equal access to the industries commanding the greatest strategic importance. Strategic projects often require substantial capital, reliable energy and digital infrastructure, specialised skills and established supplier networks. Economies with these capabilities can offer investors advantages that are difficult for less industrialised countries to replicate quickly.

For developing countries, the challenge is not simply to attract foreign capital, but to secure investment in activities that strengthen domestic productive capacity and connect local businesses to international supply chains.

Industrial Policy Shapes Investment Competition

India’s record of industrial policymaking provides another part of the picture. The report’s figures show that India implemented 1,416 industrial policies between 2008 and 2021, compared with 4,201 in China and 4,025 in the United States. The figures place India among the countries that have used industrial policy extensively over the period.

Industrial policies can include incentives, subsidies, domestic manufacturing programmes and measures intended to develop particular industries. Governments use them to influence where companies invest, which technologies are developed and how domestic producers participate in global markets.

However, the number of policies alone does not establish their effectiveness. Their impact depends on implementation, the industries targeted, the resources committed and whether the measures lead to lasting improvements in productivity, technological capability and employment.

Wider Challenge for the Global South

UNCTAD’s central concern is that the shift towards strategic industries could deepen existing investment inequalities. Its July 2026 analysis found that low-income and lower-middle-income economies attracted only about 10% of global greenfield investment in strategic sectors between 2020 and 2025, compared with more than 20% in other sectors. The gap suggests that the industries attracting increasing amounts of capital are not necessarily opening opportunities evenly across the developing world.

For India, the 5.7% share offers evidence of its place in the global investment landscape. The next question is how effectively the country can translate new projects into stronger domestic supply chains, skilled employment and technological capacity, particularly in sectors such as semiconductors, AI infrastructure and energy-transition technologies.

For other developing economies, the concentration of investment presents a more fundamental concern: without the infrastructure, financing and skills required to compete, they risk remaining on the margins of industries that will shape future production and trade.

The distribution of greenfield investment will therefore matter beyond headline investment shares. It will help determine which economies build the productive capabilities needed to participate in the next phase of industrial development.

Australia’s transition away from fossil fuels faces a new test after New South Wales approved the continuation of the Hunter Valley Operations (HVO) coal mine until 2045.

The NSW Independent Planning Commission (IPC) on September 30 approved the continuation of HVO North until the end of 2045 and HVO South until the end of 2042. The project would allow an estimated 429 million tonnes of coal to be extracted from the Hunter Valley near Singleton.

The decision is significant not only because of the scale of the mine, but because it extends a major coal operation into the period in which Australia is committed to sharply reducing its greenhouse-gas emissions.

Australia’s current climate commitments include cutting national emissions by 43 per cent from 2005 levels by 2030 and by 62–70 per cent by 2035, with net-zero emissions targeted for 2050.

The latest government inventory estimates Australia’s emissions at 452.4 million tonnes of carbon dioxide equivalent in the year to June 2026, a preliminary 1.8 per cent decline from the previous year. Emissions in the year to March 2026 were 25 per cent below 2005 levels.

Against that backdrop, the IPC acknowledged that the HVO project would have a substantial climate footprint. Its statement of reasons estimates that the project could result in about 809 million tonnes of greenhouse-gas emissions from local mining operations and the eventual combustion of exported coal overseas. The commission said those emissions would contribute to climate impacts in the Hunter, NSW and globally.

The 809-million-tonne figure needs an important qualification to note. it is a lifecycle-related estimate that includes overseas combustion emissions and should not be interpreted as emissions produced directly by the mine.

Coal mine.Representational image.Image credit:Pexels

The economic case for the extension is substantial. HVO employs more than 1,500 people and engages more than 800 suppliers, according to evidence presented to the IPC. The NSW Government says the continuation could secure up to 1,500 ongoing jobs and create about 600 temporary positions through infrastructure upgrades, subject to federal approval.

The approval also comes with conditions intended to address the mine’s emissions and its eventual transition. HVO must prepare a Scope 3 Management Plan dealing with emissions associated with exported coal, maximise renewable electricity use at the mine and purchase additional carbon offsets. It must also prepare a comprehensive closure plan within 12 months, in consultation with local councils and communities, outlining how the mine will transition towards closure while supporting workers and the local economy.

The NSW Government argues that the decision can support regional employment while maintaining the state’s broader emissions-reduction pathway. It says the approved proposal has 43 per cent lower Scope 1 emissions than the company’s 2022 application. NSW’s 2026–50 coal policy also allows extensions of existing mines while ruling out applications for new greenfield coal mines.

At the national level, the federal Safeguard Mechanism is intended to reduce emissions from Australia’s largest industrial facilities. The government says the mechanism is designed to put covered facilities on a trajectory consistent with the country’s 2030 target and net-zero goal.

That creates the central question around HVO’s extension. How does Australia manages the economic and employment role of existing coal regions while reducing emissions over the same period.

The NSW approval does not settle that question. The project still requires approval from the Australian Government under the Environment Protection and Biodiversity Conservation Act.

For the Hunter Valley, the decision provides a longer operating horizon for an established coal industry. For Australia’s climate transition, it brings the challenge of managing an economy in which existing fossil-fuel assets continue operating while national policy seeks progressively sustainable energy and lower emissions.