India electrification quietly outpacing China: report

China’s rapid electrification over the past two decades has often been treated as a one-off miracle, a byproduct of state planning, scale, and industrial policy that other emerging economies couldn’t easily duplicate.

However, a new report from energy think-tank Ember suggests that assumption may no longer hold. By several key measures, India is now electrifying faster than China did at a comparable stage of economic development, and doing so with lower per-capita fossil fuel intensity.

The Ember finding challenges a long-held orthodoxy in energy economics: that developing economies must follow a linear path from traditional biomass to fossil fuels before transitioning to cleaner electricity. Instead, Ember’s analysis infers that India is compressing and, in some sectors, actually skipping that pathway altogether.

To make the comparison meaningful, Ember adjusted both economies’ gross domestic product for purchasing power parity. On that basis, India’s current per-capita income of roughly US$11,000 aligns with China’s income level in 2012. At that point in its development, China’s energy system was still heavily dominated by coal and oil, particularly in the transportation and industrial sectors.

India’s reality today looks far different. According to the report, India is electrifying end-use sectors faster and relying on fewer fossil fuels per person than China did at the same income level. While India’s absolute fossil fuel consumption is still rising, its coal and oil use per capita remains a fraction of China’s at a similar stage of growth.

Renewables price crash

One reason for India’s progress is timing. It’s building a modern energy system in an era of dramatically cheaper clean technologies. Solar modules, batteries, electric vehicles (EVs), and power electronics now cost a fraction of what China paid just over a decade ago. Much of the cost decline was driven by Chinese manufacturing itself, creating what Ember calls a “latecomer advantage” for countries industrialising today.

According to data from the International Renewable Energy Agency (IRENA) and BloombergNEF, clean energy has transitioned from a subsidised niche to the cheapest form of new electricity generation in most of the world. That’s a point that the global oil and gas sector conveniently fails to comprehend.

Solar photovoltaics (PV) prices have experienced the most dramatic decline of any energy technology, dropping around 90% since 2010. Both onshore and offshore wind have seen steady industrialisation and turbine scaling, with costs falling between 70% and 60%, respectively, over the same period. Battery energy storage systems (BESS) have followed a similarly steep trajectory, with battery pack prices plummeting by over 90% since 2010, recently reaching record lows below US$115 per kilowatt-hour.

Nowhere is the late-comer advantage clearer than in transportation. EVs accounted for around 5% of India’s new car sales in 2024, a milestone China reached earlier in its development cycle. Yet India’s per-capita oil consumption for road transportation at that point was roughly 60% lower than China’s when it crossed the same threshold. Ember projects that India’s peak oil use per person for road transportation may never reach Chinese levels.

Fossil fuels remain

This doesn’t mean India is abandoning fossil fuels. Problematically, coal remains central to the country’s power system, while the government is considering plans that could significantly expand coal-fired capacity through mid-century.

India, along with China and Indonesia, remain the top three countries responsible for the largest increases in CO2 emissions and in coal-fired power generation in the decade since the Paris agreement, according to a CREA report. Meanwhile, oil demand in India is still growing, while the country was one of the main contributors to global oil demand growth last year.

But the structure of that growth in India is changing. Electricity is capturing a larger share of incremental energy demand, particularly in urban areas, mobility, and manufacturing. In absolute terms, India’s fossil fuel consumption is increasing more slowly than China’s today, even though China already has a far wealthier economy.

Ember’s analysts argue that this dynamic could give rise to what they describe as “electrostates” or countries that meet most of their energy needs through electricity rather than direct fuel combustion. No country fits that definition yet, but the report suggests that India is closer to that trajectory than China was at a comparable point.

The concept has broader implications for Asia. Many emerging economies in the region lack significant domestic fossil fuel reserves and face persistent balance-of-payments pressure from energy imports. Electrification, if paired with domestic renewable generation, offers a pathway to reduce long-term exposure to imported coal, oil, and gas.

However, the Ember report is careful not to frame electrification as a panacea for the energy sector. The shift requires massive investment in grid infrastructure, transmission capacity and system flexibility. India’s power grid will need to absorb rapidly rising demand from EVs, heat pumps, data centres, and industrial electrification, all while integrating variable renewable generation. This represents a significant challenge for any developing nation.

Grid constraints are already emerging as a binding factor across Asia, from India to Southeast Asia. Transmission build-out, permitting delays, and land acquisition are increasingly shaping the pace of energy transitions, sometimes more than fuel availability or capital.

There’s also a political dimension. Electrification delivers clear benefits (improved air quality, higher energy efficiency, and reduced exposure to fuel price volatility) but it also requires upfront investment and policy coordination across transport, power, industry, and urban planning. Behavioural change remains a barrier, particularly in price-sensitive markets.

Still, Ember’s central conclusion is difficult to ignore: the energy transition for emerging economies is no longer bound by the historical order established by Europe, the U.S., or even China. Clean electricity is no longer a luxury added after industrialisation; it’s becoming a core growth input.

For Asian energy markets, that shift matters. Slower per-capita growth in oil and coal demand doesn’t eliminate the need for fossil fuels in the near term, but it does reshape long-term demand trajectories. Countries like India may reach saturation points earlier than expected, not because of policy mandates alone, but because electrification increasingly makes economic sense. In that context, the debate is moving beyond whether emerging economies can afford to electrify, to whether they can afford not to.

(Writing by Tim Daiss; editing by Sophie Davies)