10 September 2026
Financial Express
Op-eds
India should aim to be a consumer as well as a producer electrostate, with electricity as the organising principle of economic development
Many commentators
have recently spoken about the idea of an “electrostate”. Some see it as a
country powered by renewable energy.
Others view it as a manufacturing hub for batteries, solar panels, and green
hydrogen. My definition is broader.
An
electrostate is an economy that
organises its growth model around electricity. As India pursues the vision of
Viksit Bharat by 2047, we need a model capable of delivering several objectives
at once: faster growth, manufacturing competitiveness, technological
leadership, energy security, exports, jobs, and strategic autonomy.
Electricity
sits at the intersection of all these goals. The next growth cycle will be far
more electricity-intensive than the last. AI, data centres, electric mobility,
advanced manufacturing,
semiconductors, and digital infrastructure run on electricity. India must not
merely consume these technologies. It should build an economy around them, and
use low-cost electrification to restore cost leadership in steel, cement, aluminium,
chemicals, textiles, and automotives, our foundational industries.
This is not about clean
energy alone, though it will naturally lead as it is the cheapest source of new
power. The real idea is to make electricity the organising principle of economic
development.
As a consumer
electrostate, we would progressively replace imported oil and gas with
electricity across transport, industry, buildings and digital infrastructure.
Electricity accounts for only around 21% of our final energy consumption. An
electrostate vision will aim to raise it to 60% by 2047.
As a
producer electrostate, India would
manufacture and export solar modules, batteries, power electronics, electrolysers,
transmission equipment, and green hydrogen. Add to this the export of green
compute, as India becomes a preferred home for data centres powering global AI.
There is a $40-50 billion export opportunity.
China is the only
country that is a consumer as well as producer electrostate. That is the model
India should replicate. It’s tempting to think electricity could do for India
what oil did for West Asia. The analogy is useful, but incomplete.
Oil transformed
countries like Saudi Arabia and the UAE because it became the foundation of
national development. Cheap domestic energy enabled energy-intensive industries
such as aluminium and steel, financed infrastructure, powered exports, and
built geopolitical influence.
Oil enriched one sector
and financed an economy. Electricity can improve the productivity and
efficiency in large parts of the economy, because it enables more efficient,
precise, automated, and scalable production systems. For a country of India’s
scale, that distinction matters. A successful growth model cannot rest on one
sector. It must create jobs, attract investment, support exports, and
strengthen resilience.
Making the electrostate
idea real will require action on three fronts.
A stronger electricity
push: By 2047, India could need roughly five times today’s generation and eight
times renewable capacity, so we must treble our pace of clean-power deployment.
That means scaling solar, wind and storage faster, building transmission ahead
of demand, and adding nuclear and other firm power.
Reducing
delivered cost of electricity to industry and
data centres: It may be the single most important competitiveness challenge
facing India, and the key driver that will push industries needing heat to
shift from coal and oil to electricity.
India produces some of
the cheapest renewable electricity. Yet industrial consumers rarely benefit
fully, since generation is only part of the bill. Between 30% and 45% of industrial
electricity costs come from transmission charges, losses, duties, and
cross-subsidies rather than generation itself. This higher cost flows into
everything else, from food to manufactured goods, eroding productivity and
investment attractiveness.
China and Vietnam have
engineered their systems to strip out many of these costs for industry. In
sectors such as aluminium, polysilicon, chlor-alkali chemicals,
electric-arc-furnace steel, and data centres where power can exceed 50% of
production costs, their cheaper delivered electricity gives them a structural
edge in attracting investment. India needs no tech breakthrough. We need to
reform how we set tariffs, how states earn electricity revenues, how we
discipline the completion of transmission lines, and how we solve right-of-way
and land bottlenecks.
Resilient grid: It
should be able to carry electricity from and to all corners of India, with a
capacity to absorb energy from millions of rooftop installations and deliver it
to the biggest aluminium smelters. We need to rapidly build a grid that is
larger, smarter, more flexible, and in the right geographies.
Smarter combination of
industrial and trade policy: We have several schemes. The task now is to link
demand tools, cost competitiveness, manufacturing scale, exports, standards,
and skills into one framework.
In electric mobility,
tighter mandates, wider charging networks, and harmonised standards do more
than boost EV adoption; they create predictable demand for batteries and power
electronics, encouraging long-term manufacturing investment. Our solar sector
shows the same pattern: incentives, demand creation, standards, and trade
measures work far better as one system than as scattered schemes.
Finally, India should
create Export India, modelled on Invest India, a government-backed platform
offering market intelligence, buyer facilitation, standards navigation, and
deal support, backed by diplomacy. Helping Indian electro-tech companies win
global markets will be as important as helping them manufacture in the first
place.
India’s opportunity is
not to merely to shift to electricity faster. It is to build something more
relevant now: a producer and consumer electrostate that combines energy
security, industrial competitiveness, exports, and inclusive growth into a
single national mission.
