Page 27 - Policy Economic Report - April 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

8. India is poised to emerge as the world’s second-largest solar market - NSEFI

India is poised to emerge as the world’s second-largest solar market in 2026 in terms of annual
installations, reflecting the rapid acceleration in its renewable energy transition. This growth is
underpinned by sustained capacity additions, strong policy support, and increasing adoption across utility-
scale, commercial, and distributed segments. The country has achieved a significant milestone by adding
around 50 GW of solar capacity in just 14 months, taking total installed capacity to over 150 GW, marking
a sharp acceleration compared to earlier phases of expansion.

Looking ahead, solar energy is expected to play a central role in achieving India’s target of 500 GW of non-
fossil fuel capacity by 2030, with solar capacity projected to reach 280–300 GW over the medium term.

9. India remains among the fastest-growing economies even as growth slows amid Middle
East Conflict – World Bank Assessment

According to the latest update by the World Bank, India is projected to remain among the fastest-growing
major economies despite a moderation in growth amid rising global uncertainties. Growth is expected to
ease to 6.6 per cent in FY27, primarily due to higher energy prices linked to the Middle East conflict and
disruptions in global supply chains. Nevertheless, the Indian economy continues to demonstrate
resilience, supported by strong macroeconomic fundamentals and policy buffers.

The report highlights that India’s resilience is underpinned by substantial foreign exchange reserves,
relatively low inflation, predominantly rupee-denominated public debt, a stable financial sector, and
ongoing efforts toward trade diversification. These factors provide insulation against external shocks and
enhance the economy’s ability to withstand global headwinds.

10. India’s gross FDI remains strong, but net flows stay near record lows: Morgan Stanley

India’s foreign direct investment (FDI) outlook remains mixed, with strong gross inflows offset by
persistently weak net inflows, according to a report by Morgan Stanley. The report noted that gross FDI
is likely to remain well supported, driven by both greenfield and brownfield investments. However, net
FDI is expected to stay subdued in the near term due to higher repatriation of capital and rising outward
investments by Indian firms.

Gross FDI equity inflows rose to $90.8 billion on a 12-month trailing basis in January 2026 (around 2.3 per
cent of GDP), marking a 13 per cent year-on-year increase from $80.3 billion in January 2025. FDI
excluding repatriation reached a three-year high of $36.3 billion, registering a strong 38.4 per cent
growth. In contrast, net FDI remained near historic lows at just $0.5 billion, weighed down by sustained
repatriation (above $50 billion for the second consecutive year) and a sharp rise in outward FDI to $35.8
billion, more than 2.5 times higher over the past two years.

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