The free trade agreement (FTA) concluded between India and the United Kingdom (UK) on May 6 will open a new market for Indian clean energy manufacturers at a time when the US is increasingly becoming a challenging space to trade due to tariffs and uncertainty over its Inflation Reduction Act (IRA).
Industry stakeholders and experts told Moneycontrol that not only will the FTA be a boon to Indian exporters of solar modules, wind turbines and other green energy equipment, but it will also increase foreign direct investment (FDI) in India's renewable sector.
The UK renewable energy market size was estimated at $ 20.25 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 20.3 percent from 2024 to 2030, according to Grand View Research. The Indian renewable energy market was valued at $ 23.9 billion in 2024 and is likely to grow at a CAGR of 9 percent during 2025-2033, as per market research firm IMARC.
Hitesh Doshi, Chairman of the Waaree Group, India’s largest solar module manufacturer with a capacity of at least 13 gigawatts (GW), said the FTA is “a significant step” towards bolstering the economies and achieving net zero emission targets of the two countries. Waaree is one of the biggest exporters of solar modules in India.
“I foresee exciting opportunities for collaboration in the energy transition space. Increased investment, shared expertise, and easier market access will drive innovation and deployment of clean energy solutions,” he said.
Bhupinder Singh Bhalla, former secretary of the Ministry of New and Renewable Energy, said the FTA will lend confidence for enhanced partnerships between the Indian and UK private sectors.
“UK has a zero duty on solar cells and panels. So India may have received a zero duty commitment for its exports to UK. This will provide resilience to the clean energy supply chain in the UK while providing a stable market for Indian solar manufacturers,” Bhalla said.
All international companies are already allowed to participate in renewable energy bids in India, though they have to incorporate a local special purpose vehicle (SPV) within a specified period if they win the bid. The FTA could lead to increased participation of UK clean energy firms in Indian bids. India is already issuing renewable energy tenders close to 50 GW annually to achieve its target of having a non-fossil fuel based power generation capacity of 500 GW by 2030.
In its statement, the UK government said the FTA “will give the clean energy industry a brand new and unprecedented access to India’s vast procurement market”, as India makes the switch to renewable energy, alongside its growing energy demand.
Praveen Singhal, Vice President, Renewable Energy, Baldota Group said India and the UK share a strong history of clean energy collaboration, including the UK’s $ 1 billion investment commitment in Indian green projects announced ahead of COP26. "The India-UK FTA builds on this foundation. With provisions to enhance UK firms’ participation in India’s procurement market, it presents meaningful opportunities for domestic players to collaborate, bringing local market expertise."
Senior government officials told Moneycontrol that India and the UK are also going to collaborate on round-the-clock power supply through technology sharing on battery energy storage systems. Other areas of work will include industrial decarbonisation, grid upgrades, and offshore wind supply chains and financing models.
The detailed text of the India-UK FTA is expected to be shared by officials after three months during which a joint 'legal scrubbing' of the deal is likely to be concluded, government officials said.
The final text of the FTA will be sent to the British Parliament for ratification after the formal signing. However, given Britain's ratification process, the deal may take over a year to become operational, officials said.
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