India’s renewable energy expansion to fuel $400b equipment market by 2035

India's rapid electrification and renewable energy expansion are poised to make the country one of the most consequential markets for power equipment over the next decade, according to a McKinsey report.

The report estimated that renewable energy equipment and high-end cables alone could represent a global market of $350b to $400b by 2035, whilst the global power electronics market could exceed $140b over the same period.

Domestically, electricity demand is projected to surge on the back of renewable energy project buildouts, electric vehicle adoption, data centres, and grid expansion.

The fastest-growing segments through 2035 are power electronics, batteries, grid management systems, and energy storage technologies, each expected to expand at over 14% annually.

India's electrical equipment market has already grown sharply, with domestic consumption reaching $59b in FY2025 after an 11% compound annual growth rate over the past five years.

The report projected total domestic electrical equipment consumption could reach $170-205b by 2035.

However, McKinsey warned that the energy transition risks being powered largely by imports if domestic manufacturing does not keep pace.

Import dependence has already climbed from 22% in 2020 to 33% in 2025, and the report cautioned that under a business-as-usual scenario, this could exceed 70% by 2035, creating a production shortfall of more than $130b.

The four segments with the greatest localisation urgency are power electronics, batteries, solar photovoltaic cells and modules, and subcomponents.

The report called for a fivefold expansion in domestic capacity across these areas, as well as in AC compressors, transformers, and cables, to reduce overall import dependence from 33% today to below 14% by 2035.

McKinsey also flagged grid stabilisation technologies and power software as emerging high-growth segments tied to the complexity of managing a renewables-heavy electricity system, as subsea and high-speed rail cables round out the list of priority areas where India could build global export competitiveness.