INDIA’S decarbonisation strategy must be anchored in strengthening national resilience. Rather than trying to match the large-scale clean-technology subsidies deployed by China, the European Union (EU), and, until the current administration, the US, India can take a more strategic route by using limited public funds to build the foundations needed for decarbonisation.

Getting the sequencing right

India needs a strong green industrial policy to expand domestic manufacturing in electric vehicles (EVs), batteries, electrolysers, green hydrogen, solar components and other low-carbon technologies. Subsidies deployed under the right conditions work. India’s solar module and cell manufacturing scaled rapidly under the Production-Linked Incentive (PLI) but the same has not been true for batteries or electrolysers due to gaps in the supporting ecosystem needed — resilient supply chains, skilling, quality assurance and technology transfer.

Large economies can afford to subsidise firms heavily, absorb failures and adjust course. In India, every rupee spent on corporate incentives competes with essential public priorities like health and education, making the efficient use of public capital important.

Addressing coordination failures is crucial

In many green manufacturing sectors, investors hesitate to commit capital because of gaps in the surrounding ecosystem. EV components, electrolysers and battery manufacturing all depend on specialised import-clearing desks, quality-control centres, reliable power connectivity, storage facilities, logistics networks and shared testing infrastructure. This is where government action is valuable. India should accelerate the creation of specialised green manufacturing parks. By clustering manufacturers and shared services, these can generate economies of scale, reduce costs, and create common infrastructure. China’s success in green manufacturing has also been driven, in part, by industrial hubs that anchor supply chains and support scale, but only after decades of public investment in building the ecosystem.

Investing in skills

A second priority is skills. Green manufacturing requires specialised, high-tech capabilities. Firms have limited incentives to invest in advanced training because workers can be poached. The government should work with industry leaders, start-ups, technical institutes and certification bodies to develop training programmes for green technologies, focusing on precision engineering, electrochemistry, AI-enabled digital supply chains, advanced recycling, and waste management.

Building a quality-assurance ecosystem

Quality is central to competitiveness. If Indian-made green products fail to meet international certifications and performance standards, they will struggle to enter high-value markets like the EU, Australia and Japan. Even within India, concerns over product reliability make companies and banks cautious. India needs a quality-assurance ecosystem with stronger lab networks, credible accreditation, transparent certification, and internationally respected testing facilities.