The Trump tariff turmoil has given India a rare opportunity to gain a competitive edge by positioning itself as a leader in clean-tech manufacturing.
The National Manufacturing Mission’s focus on clean-tech, announced this year, could be a critical step towards achieving these goals. However, its success hinges on complementary policies that drive demand, foster R&D, integrate global supply chains, prioritise waste recycling, and develop robust testing and laboratory infrastructure to be internationally competitive.
Key elements
First, create domestic demand for green goods. India should support the Production-Linked Incentive (PLI) schemes for manufacturing electrolysers, batteries, solar modules, and battery energy storage systems by creating and accelerating domestic demand for these clean-tech products and develop complementary policies for power grid infrastructure, firm and dispatchable renewable energy (FDRE) and rationalise tariffs to aid the Manufacturing Mission.
For instance, mandating green hydrogen blending in fertilizer plants and refineries will provide the necessary pull for electrolysers. Electrifying equipment needed in the industrial sector, especially in MSMEs, can create large-scale demand for renewable power and end-use equipment.
Second, build an internationally competitive R&D and innovation ecosystem. The Manufacturing Mission should seamlessly integrate with the Anusandhan National Research Foundation’s mandate of providing high-level strategic directions for research, innovation and entrepreneurship.
It can act as a funnel to innovate and commercialise future technology, such as high-efficiency electrolysers, advanced batteries and solar PV panels.
Third, play the strategic manufacturing game and integrate into global supply chains. We should have clear priorities on what parts of the Indian manufacturing ecosystem to develop and identify partner countries to build the rest. India has cost advantages in labour and, in some cases, materials such as steel, aluminium and copper.
However, we cannot and should not aspire to be manufacturers of everything. For example, India does not currently have the technology for membranes used in electrolysers. However, India can tap into its specialty chemicals industry, which provides key inputs for these membranes, to manufacture the membranes in another country.
Developing an indigenous membrane can be a longer-term goal. Further, manufacturing of electrolysers needs key minerals like platinum, iridium and nickel. India could stitch the critical minerals partnership into the free trade agreements.
Fourth, focus on waste recycling as an imperative. India must seek active collaboration with countries to develop new technologies and deploy existing ones for recycling electronic and clean-tech waste.
For example, according to a CEEW study, the cumulative waste from existing and new solar capacity will reach about 600 kilo tonnes by 2030 and 19,000 kt by 2050. This provides an excellent opportunity for urban mining by developing an industrial base on recycling while ensuring minimal damage to the environment.
Finally, create the infrastructure for clean-tech development. We should collaborate with partner countries to develop an elaborate support system for laboratories and testing facilities. For example, the capacity of standard development organisations like the Bureau of Indian Standards and the Petroleum and Explosives Safety Organisation needs to be enhanced to rapidly develop new clean-tech standards or adapt and harmonise standards from other geographies.
If India’s clean manufacturing push succeeds, it will establish the country as a global leader in clean-tech trade.
Mallya is a Fellow, and Yadav is a Senior Programme Lead, at the Council on Energy, Environment and Water. Views are personal