Rs 7.9 lakh crore power boom: Why India’s power transmission sector is a massive investment opportunity

That’s the unglamorous but essential business of transmission and distribution (T&D), and brokerage firm Macquarie Research believes it’s about to boom.

In a new report, Macquarie pegs the investment opportunity in this space at Rs 7.9 lakh crore ($85 billion) between FY27 and FY36. 

Here are four factors supporting this opportunity 

Power demand rising, and India is starting from a low base

India’s per-capita power consumption is still significantly lower than that of several other emerging economies. Macquarie attributes this gap to a mix of factors: historically lower urbanisation and industrialisation, affordability constraints for households, and years of under-investment in the energy ecosystem itself.

Today, urbanisation is accelerating, rising temperatures are pushing up cooling demand, industrial and infrastructure investment is picking up, and data centres are adding a whole new category of consumption. 

To keep pace, Macquarie estimates capital investment in power generation alone will cross Rs 15 lakh crore between FY27 and FY30, with India’s total installed capacity projected to nearly double from around 475 GW in FY25 to almost 880 GW by FY32.

But building power plants isn’t enough on its own; the grid connecting them to consumers has to scale in step. The report notes that India’s transformation-to-generation capacity ratio has already improved from 1.1x in March 1992 to 2.8x by December 2024. As per the report, this ratio needs to keep climbing to ease transmission congestion.

The renewables push is forcing a grid rebuild

The second driver is the rapid scale-up of renewable energy. According to the report, renewables bring a very different set of grid challenges than traditional coal or gas plants, because solar and wind generation is spread across many, often remote, sites and is intermittent by nature.

Citing National Electricity Plan projections, Macquarie says renewables’ share of installed capacity is set to rise from about 39% in 2022 to 55% by 2027 and 66% by 2032. 

The Central Electricity Authority is even more bullish, projecting a 70% share by FY36. To hit these numbers, renewable capacity additions are expected to grow at a 14% CAGR through 2032, which is nearly double the 8% pace expected for overall capacity growth.

This matters for the grid because, as of March 2026, close to 125 GW of solar and wind projects were already under construction. Each of these projects needs to be physically connected to the grid and integrated in a way that keeps the system stable, since renewable output can swing sharply with weather. As per the report, this will require substantial incremental T&D investment for grid stability and last-mile connectivity, including through the government’s Green Energy Corridors programme, which is specifically designed to evacuate and transmit renewable power from generation-rich regions to demand centres.

A nearly $100-billion transmission spending cycle is already mapped out

The third driver is the most direct one: transmission spending that’s already been planned out by policymakers. According to Macquarie, the National Electricity Plan-Transmission estimates that peg total planned transmission spending at Rs 9 lakh crore (about $100 billion) between FY22 and FY32. Roughly 45% is front-loaded into the first five years, with the remaining 55% coming in the following five years as renewable capacity ramps up further.

Separately, updated Central Electricity Authority estimates through FY36 point to Rs 7.9 lakh crore of spending in that period. Looking even further ahead, spending through FY47 is estimated at over Rs 15 lakh crore.

Where does this money actually go? As per the report, this goes into the transmission lines, substation and transformation capacity, and HVDC (high-voltage direct current) systems used for long-distance power transfer. Substations and transformation capacity account for the single largest chunk, around 50-55% of the total spend, which is notable because it’s this equipment (transformers, switchgear, and related gear) that companies in this space actually manufacture.

A global equipment shortage has opened an export window for Indian manufacturers

The fourth driver looks outward. Macquarie points to a global shortage of high-voltage equipment, driven by supply chain constraints and a wave of energy-transition investment now underway in developed markets, meaning Indian manufacturers aren’t just building for India’s own grid; they’re also positioned to fill gaps in demand elsewhere.

Citing IEA data, the report notes that electricity demand growth in advanced economies is accelerating again after 15 years of relative stagnation, with data centres a key factor behind this reversal. In the US specifically, data centres accounted for roughly half of all electricity demand growth in 2025, and the US Energy Information Administration expects commercial electricity consumption to grow a further 5% in 2026, largely on the back of data centre server usage.

Global data centre electricity demand rose 17% in 2025, with AI-focused data centres growing even faster, at about 50% year-on-year. The IEA expects this segment’s total consumption to nearly double, from 485 TWh in 2025 to 950 TWh by 2030. 

The report also added that Indian players are already tapping into this demand: one Indian manufacturer secured a Rs 90-crore ($99.2 million) export order from a US data centre customer in 2026, while another has seen its exports grow at a 22% CAGR over five years, compared to 9% domestic revenue growth over the same period, with export orders now making up 8% of its FY26 order inflow.

Conclusion 

Grid infrastructure has long been the quiet, unglamorous part of the power story, but as per the Macquarie report, it’s fast becoming the story itself. And as it grows, it may not just power India, but help power the world.