The Indian economy is expected to grow at more than 8% over the next years. With reforms on a fast-track, the economy is expected to further open in the years to come, creating ever greater opportunities for international companies. There is significant focus by the government in the areas of power and infrastructure and these areas hold special potential in the coming years.

Electricity Deficit
In 2008, India had a base load power deficit of 10% (84 TWh) and peak load deficit of 12.7% (over 15 GW). The resultant frequent electricity shortages cost the country an estimated 6% of GDP. 400 million Indians still do not have access to electricity. Hundreds of millions more only have access to a very unsatisfactory power supply. Every 1% rise of GDP requires a 1.48% increase in electricity supply, but it is only 0.73% at present. To sustain the projected growth rate, India needs to have around 300GW (double the current installed capacity) by 2017 and approximately another 400GW by 2030.

At present, renewables amount for around 3.5% of the electricity generation. This is set to increase, however, as renewables are ideally placed to close the peak power gap, provide more political and economic energy security and supply power in remote locations. At the same time, the heavy subsidies for fossil fuels (especially petroleum products) will become increasingly unviable as prices rise and climate considerations become more pertinent. The National Action Plan on Climate Change targets 15% of renewable power generation by 2020. This will require an installed capacity of renewable power of more then 100 GW (as opposed to 16 GW in 2010).

About three quarters of the infrastructure India will need by 2030 is yet to be built. The urban population is expected to increase from 340 million in 2008 to 590 million during the same period. At present, only 31% of generated sewage is treated. India is planning to invest as much as EUR1.000 billion into its cities between 2010-2030 for water, public health and transport. Vast road, railway, sewage, housing, airport, port and grid projects are underway across the country.

Since India needs large scale private and foreign investments to match its requirements for power and infrastructure, it has allowed 100% FDI in these sectors.