Daily Editorial Analysis 2 November 2026

An Energy Revolution in the Making

Context

• India’s transition towards renewable energy is transforming its economy, energy security, and environmental sustainability.
• Solar power is reaching households, farmers, and businesses, reducing electricity expenses and creating employment opportunities.
• With solar capacity increasing from 2.8 GW in 2014 to approximately 171 GW, India is advancing towards Viksit Bharat by 2047 and its target of 500 GW of non-fossil fuel capacity by 2030.

Achievements in India’s Solar Energy Revolution

• Expansion of Rooftop Solar

  • The PM Surya Ghar Muft Bijli Yojana has enabled over 65 lakh households to adopt rooftop solar, with more than 21 lakh receiving zero electricity bills.
  • This reduces household expenses and encourages citizens to become energy producers rather than merely consumers, while promoting technical knowledge and entrepreneurship.

• Falling Solar Power Costs

  • Solar electricity costs have declined from approximately ₹8–₹10 per unit in 2014 to as low as ₹2.15.
  • Technological improvements, economies of scale, and government initiatives such as PM-KUSUM have strengthened affordability and expanded adoption.

• Progress Towards Renewable Energy Targets

  • India has achieved its earlier target of obtaining 50% of installed electricity capacity from non-fossil sources ahead of schedule.
  • However, installed capacity alone does not guarantee reliable electricity; effective storage, transmission, and grid management remain essential.

The Next Phase: Expanding Solar Energy Infrastructure

• PM-KUSUM 2.0 and Agricultural Solarisation

  • More than 30 lakh standalone solar pumps have reportedly been installed under PM-KUSUM.
  • Agricultural solarisation reduces dependence on conventional electricity and diesel.
  • Agri-photovoltaics, which combines farming with solar generation, can improve land-use efficiency and diversify farmers’ incomes.

• Rooftop Solar and Green Transmission Corridors

  • India must expand rooftop installations, strengthen Green Energy Corridors, and digitise electricity networks.
  • Cooperation between the Union government, States, and private companies is necessary to integrate renewable power efficiently.

Four Pillars of India’s Renewable Energy Expansion

• Capital and Investment

  • Achieving 500 GW of non-fossil capacity requires approximately $220 billion in investment.
  • Private enterprises, institutional investors, and foreign investors must complement public funding.
  • Making rooftop installations and solar pumps bankable assets can attract long-term capital.

• Domestic Manufacturing

  • Production-linked incentives have strengthened solar module manufacturing, with capacity exceeding 225 GW.
  • India must expand domestic production of solar cells, wafers, and polysilicon to reduce import dependence.
  • The National Green Hydrogen Mission, targeting five million tonnes of annual production by 2030, can further promote industrial decarbonisation.

• Energy Storage and Grid Modernisation

  • India may require 236 GWh of battery storage by 2031–32. Batteries, pumped-storage hydropower, and smart grids can balance intermittent solar generation.
  • Modern transmission infrastructure is essential for delivering renewable electricity reliably.

• Human Capital and Green Employment

  • Rooftop solar generates employment for engineers, electricians, installers, and maintenance workers.
  • It can create green jobs for youth, expand rural employment, and increase women’s participation.
  • Vocational training, apprenticeships, and recognised qualifications are necessary to develop a skilled workforce.

India’s International Leadership in Renewable Energy

• G20 and BRICS Cooperation

  • India has promoted renewable energy cooperation through the G20 and BRICS.
  • Initiatives supporting solar photovoltaics, smart grids, and storage can encourage technology sharing, investment, and manufacturing partnerships, particularly among developing countries.

• International Solar Alliance

  • The International Solar Alliance (ISA), launched by India and France in 2015, promotes global solar deployment.
  • Its training programmes, centres of excellence, and Africa Solar Facility support skills development and investment mobilisation, particularly across developing economies.

Bharat Renewable Energy Summit and Global Cooperation

• The Bharat Renewable Energy Summit and Expo 2026, scheduled for November 2–5, provides a platform for cooperation on solar power, green hydrogen, and energy storage.
• Solar irrigation, reliable electricity, and reduced fuel-import dependence can strengthen developing countries’ energy and food security.
• This reflects Vasudhaiva Kutumbakam, the principle of the world as one family.

Challenges and the Way Forward

• India faces challenges involving financing, import dependence, inadequate storage, transmission constraints, and uneven rooftop solar adoption.
• Financially sustainable distribution companies, predictable policies, and stronger domestic supply chains are essential.
• Affordable financing, environmental safeguards, and responsible water management must accompany expansion.

Conclusion

• India’s solar transformation is creating economic opportunities while strengthening energy security and reducing electricity costs.
• Achieving its renewable energy ambitions requires investment, manufacturing, storage, infrastructure, and skilled human resources.
• By combining domestic innovation with international cooperation, India can advance towards Viksit Bharat by 2047 and contribute to a sustainable global energy future.

An Energy Revolution in the Making FAQs

Q1. What is the target of India’s non-fossil fuel capacity by 2030?
Ans. India aims to achieve 500 GW of non-fossil fuel capacity by 2030.

Q2. What is the PM Surya Ghar Muft Bijli Yojana?
Ans. It is a government scheme that promotes rooftop solar installations in households.

Q3. Why is energy storage important for solar power?
Ans. Energy storage ensures a reliable electricity supply when sunlight is unavailable.

Q4. What is the role of the International Solar Alliance?
Ans. The ISA promotes global solar energy deployment through cooperation, investment, and skill development.

Q5. How can solar energy create employment?
Ans. Solar energy creates jobs in manufacturing, installation, maintenance, and technical services.

Source: The Hindu

Draft National Steel Policy: Vision 2047 – From Protection to Global Competitiveness

Context

• The Ministry of Steel has released the Draft National Steel Policy: Vision 2047, which aims to make India a globally competitive steel producer and increase steel exports to 45 million tonnes (Mt).
• However, the policy raises a fundamental question: Does India’s steel industry derive its competitiveness from efficiency and productivity or from excessive government protection?
• Therefore, India must gradually dismantle protectionist measures, improve mining policy and enhance industrial efficiency to achieve genuine global competitiveness by 2047.

India’s Steel Industry – Growth and Profitability

• Impressive production growth:

  • India has emerged as the world’s 2nd-largest steel producer, with production reaching 170 Mt.
  • Its share in global steel production has increased from less than 5% in 2000. However, India remains significantly behind China, which produces 961 Mt.

• High profitability:

  • The average EBITDA-to-sales ratio of the Indian steel industry during 2000–2025 was approximately 15%, around 3–4 percentage points higher than the rest of Indian manufacturing.
  • The profitability of India’s three largest steel firms was also 3–4 percentage points higher than that of their major global counterparts during 2015–2024.
  • But, high profitability may reflect protection and policy advantages rather than superior efficiency.

Sources of Protection and Their Economic Costs

• Cheap domestic iron ore:

  • A 30% export duty on iron ore containing more than 58% iron keeps domestic prices approximately 30–40% below global prices.
  • This effectively transfers value from mineral resources and mining regions to steel manufacturers.
  • Low domestic prices reduce incentives for exploration and mining, leading to economic losses in mineral-rich regions.

• High import tariffs and non-tariff barriers:

  • A 7.5% import tariff, combined with an 11.5% safeguard duty, results in an effective duty of approximately 18%. Comparable tariffs in ASEAN countries are only 3–4%.
  • Quality Control Orders (QCOs) cover 228 steel products, restricting imports and competition.
  • The Gauba Committee reportedly recommended removing 122 products from the QCO list, but only 59 have been suspended so far.

• Higher costs for downstream industries:

  • Domestic steel manufacturers sell hot-rolled coils at a 6–7% premium over Japan, despite Japan being a high-cost producer.
  • This increases input costs for –
    • Construction: Steel accounts for approximately 15% of total project costs.
    • Automobiles: Steel and related products constitute roughly 5% of raw material costs.
    • MSMEs: Higher input costs weaken the competitiveness of smaller industries, particularly export-oriented enterprises.
  • Thus, protection for the steel industry imposes an indirect cost on the broader manufacturing ecosystem.

Impact of Removing Protection – Examined Through Two Alternative Scenarios

• Policy change (Alternative 1): Reduce tariffs, lowering domestic steel prices by 6%.
  • Impact: Profitability of the largest private sector steel firm reduces by 25%, that of the largest public sector firm drops by 50%, and the fastest-growing large private firm drops by 40%.
• Policy change (Alternative 2): Remove iron ore export duties and purchase ore at global prices.
  • Impact: Profitability of the largest private firm reduces to approx. 7%, that of the fastest-growing private firm drops by 95%, and that of the largest public-sector firm becomes negative.
• The findings indicate that the industry’s profitability is highly dependent on policy support.
• Genuine competitiveness requires firms to survive through productivity, innovation and cost efficiency rather than protection.

Reforms for Global Competitiveness

• Calibrated liberalisation to strengthen export competitiveness:

  • Reduce import duties over five years to ASEAN levels.
  • Remove unnecessary QCOs, particularly those identified by the Gauba Committee.
  • Introduce greater competition to encourage productivity, innovation and cost reduction.

  • Lessons from other industries:

    • Pharmaceutical and automobile component tariffs declined from approximately 40% in 2000 to 10–15% in 2023.
    • India’s share in global automobile component exports increased from 0.2% in 2003 to 1.5% in 2024.
    • Its pharmaceutical export share increased from 0.7% to 2%.

  • Consider strategic privatisation:

    • The profitability gap between private and public-sector steel firms suggests potential efficiency and governance problems in public-sector enterprises.
    • Market-share trends since 2000 – SAIL (declined from 30% to 10%), JSW Steel (increased from 1% to 12%), and Tata Steel (maintained approx. 11–13%).
    • Privatisation of selected SAIL plants could improve efficiency, corporate governance and fiscal outcomes while retaining strategic oversight.

  • Remove iron ore export duty:

    • Abolish the 30% export duty on high-grade iron ore. Allow domestic miners to realise international prices.
    • Encourage exploration, investment and efficient resource allocation. Expose steelmakers to global input prices, encouraging productivity improvements.

  • Overhaul mining policy:

    • India has explored only around 10% of its obvious geological potential.
    • The existing mining regime discourages exploration because discoveries must be surrendered for future auctions, with discoverers receiving limited incentives.
    • Suggested reforms –
      • Adopt exploration-friendly policies followed by Australia and other mineral-rich countries.
      • Provide adequate incentives and predictable rights to mining explorers.
      • Accelerate new mine development.
      • Increase mining’s contribution to GDP and improve resource utilisation.

Conclusion:

• India’s steel industry has achieved remarkable growth since Jamsetji Tata established the foundations of modern steel production in 1912, overcoming colonial scepticism about India’s industrial capabilities.
• The Draft National Steel Policy: Vision 2047 must build upon this legacy by promoting efficiency, technological innovation, competitive input markets and export orientation.
• A phased transition from protection-led profitability to productivity-led competitiveness is essential for sustainable industrial growth.

Draft National Steel Policy FAQs

Q1. What major challenges India’s steel industry faces?

Ans. Excessive tariff and non-tariff protection, coupled with artificially cheap iron ore, etc.

Q2. How do high steel prices affect India’s downstream industries?

Ans. It increases production costs in construction, automobiles and MSMEs, undermining their domestic and export competitiveness.

Q3. How can tariff liberalisation enhance India’s steel industry competitiveness?

Ans. It can promote competition, innovation, productivity and export growth.

Q4. Why is mining policy reform essential for India’s steel industry?

Ans. It can unlock India’s geological potential, attract investment and ensure efficient resource allocation.

Q5. How can privatisation improve the performance of India’s public-sector steel industry?

Ans. By enhancing operational efficiency, corporate governance and fiscal outcomes.

Source: IE

‹ ›