Page 24 - Policy Economic Report - April 2025

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

leading to 2024. While India’s clean generation continues to grow, it remains below the global average,
highlighting significant potential for further expansion.

The report added that renewables were the main driver of overall clean growth globally, adding a record
858 TWh in 2024, 49 per cent more than the previous high in 2022. Solar was the largest source of new
power for the third year running, adding 474 TWh in 2024, as well as the fastest-growing for the 20th year
in a row. While global solar generation doubled in three years to reach a share of 6.9 per cent in 2024.

In comparison, India reached a share of 7 per cent solar electricity in 2024, with generation doubling in
three years from 2021. India added 24 GW of solar capacity in 2024, more than double the additions in
2023, making it the third largest globally after China and the US. It also recorded the fourth-largest
increase in solar generation globally in 2024.

Overall, India's electricity demand grew by 5 per cent in 2024. Clean generation met 33 per cent of the
increase in electricity demand, with coal meeting the majority. However, this was significantly lower than
in 2023, when coal met 91 per cent of the increase.

7. ADB revises India's FY26 growth forecast to 6.7% amid US tariff risks

The Asian Development Bank (ADB) has revised downwards India’s GDP growth forecast for the financial
year 2025-26 (FY26) to 6.7 per cent from the earlier 7 per cent in its April 2025 latest outlook report.

A major risk arises from US tariff levies on India’s and other countries’ exports, which could reduce trade
and investment flows and potentially create volatility in the domestic financial market. Global economic
uncertainty may also affect completion of investment projects in India, ADB said in its report.

However, ADB in its report highlighted that these risks could potentially be mitigated by a trade
agreement between India and US, which is being negotiated and the fact that India’s merchandise exports
to the US account for a relatively low 2 per cent of GDP.

According to ADB, favorable monetary and fiscal policies, rising rural incomes, and moderating inflation
would support India’s growth. The growth for the financial year 2026-27 has been projected at 6.8 per
cent in the report. Addressing food inflation with extreme weather events would be a challenge for India,
which ADB said could impose risks on agricultural outlook.

It further said that developing Asian economies should remain committed to open trade and investment,
bolstering economic integration, reconfiguring supply chains to adapt to new tariffs, and seeking new
trade agreements among themselves and with third countries.

Countries should also consider macroeconomic policy support in cases where tariffs result in a significant
slowdown in growth as well as diversify export markets to reduce concentration risk, the ADB report
recommended.

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