Indian Economy News

India's Power Transmission Infrastructure Set for US$ 94.32 billion Upgrade as Renewable Push Accelerates

India’s power transmission and distribution sector is set for a sustained growth cycle, supported by an estimated Rs. 9 trillion (US$ 94.32 billion) capital expenditure programme through 2032, according to a report by Motilal Oswal Financial Services. The report said the capex cycle, which began in FY23, has already strengthened order books, revenues and margins for sector participants, although FY26 saw weaker ordering activity with only 16 schemes awarded versus 45 in FY25. It attributed the slowdown to temporary execution and manufacturing capacity constraints rather than a structural demand problem, while noting that high-capacity utilisation and longer manufacturing and testing cycles for higher-voltage transformers are extending delivery timelines. The National Electricity Plan’s transmission investment push, driven by renewable energy integration, continues to reinforce the long-term outlook for the sector.

The report also highlighted strong demand from both domestic and export markets, with transformer supply struggling to keep pace. Demand from the US and Europe is surging because of renewable energy integration, data centre expansion, industrial electrification, EV charging infrastructure and the replacement of ageing grids, creating a demand-supply mismatch that is raising transformer prices and increasing reliance on imports. Indian manufacturers are positioned to benefit from this global shift, especially as the country gains importance in OEM feeder factory networks. The report further pointed to opportunities in high-voltage direct current projects, noting a 32.3 GW pipeline, of which about 14.5 GW has already been tendered and awarded. It expects transformer players to deliver strong earnings growth between 2025 and 2028, although valuations are no longer cheap; even so, possible earnings upgrades and export opportunities could keep investor interest intact.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.