India is the third-largest producer and consumer of electricity worldwide. As of July 2025, India boasts a total installed electricity capacity of 490 GW. Coal continues to be the dominant player, contributing 45.52% of the total, while solar power follows with 24.29%.
Wind energy accounts for 10.64%, and hydro power makes up 10.13%. Other sources include oil and gas at 4.23%, bio power at 2.37%, and nuclear energy at 1.79%. This data highlights the country’s gradual transition towards renewable energy, even as it still heavily relies on coal.
According to a report from ICRA, India’s electricity demand is expected to increase at a compound annual growth rate (CAGR) of 6.0-6.5% from FY2026 to FY2030. This growth is largely fueled by the rising popularity of electric vehicles (EVs), the expansion of data centers, and the development of green hydrogen projects.
Have you ever thought about what ties together all these different energy sources? Whether it’s coal, solar, wind, hydro, or nuclear, they all rely on transformers. These devices are crucial for boosting voltage so that electricity can travel long distances efficiently, and then they step it down to a safer level for distribution to our homes, industries, and businesses.
Supply Chain Analysis
Electricity begins its journey at power plants, where it’s created using various sources like coal, water, wind, solar, or nuclear energy. After that, the power travels through large transformers that boost the voltage, making it strong enough to cover long distances with minimal loss. This high-voltage electricity then makes its way across the country via transmission lines and towers until it arrives in cities and towns.
As it gets closer to where people live and work, the electricity passes through substations that gradually reduce the voltage. It first drops to medium voltage for industries and large facilities, and then to low voltage (like 230V) for homes, shops, and offices.
Through distribution lines and smaller transformers, electricity is safely delivered to households, factories, and farms, completing the journey from generation to everyday use.
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Energy Outlook
According to the National Electricity Plan (NEP), the country is on track to hit an installed capacity of 609 GW by 2031-32, to achieve 500 GW from renewable sources by 2030. This clearly highlights India’s commitment to clean energy while also addressing the increasing demand.
The Central Electricity Authority (CEA) anticipates an even greater power demand of 817 GW by 2030, with renewables expected to make up 44% of that, while thermal energy will decrease to 52%.
Regardless of whether the growth aligns with NEP’s projections or CEA’s bold estimates, India’s power infrastructure will require significant upgrades — making transformers an essential part of this transition.
Growth Triggers
India’s power sector is on a strong growth trajectory, driven by rising consumption, rapid electrification, and clean energy expansion. As of July 2025, installed capacity stands at 490 GW, with power demand expected to grow at a 6-6.5% CAGR over the next five years.
Massive investments of over Rs. 40 lakh crore (according to Motilal Oswal) are planned in renewables, transmission, and storage, backed by government initiatives like the Rs. 9.15 lakh crore grid upgrade plan and the PM-Surya Ghar rooftop solar scheme.
This aggressive expansion directly boosts transformer demand, as efficient power transmission, renewable integration, and EV infrastructure require advanced transformer solutions. With India targeting 500 GW of non-fossil capacity by 2030 and strengthening its grid, transformer manufacturers are set to play a pivotal role in enabling the sector’s transformation.
The Indian Power & Distribution Transformer Market was valued at USD 4.50 billion in 2025 and is projected to reach USD 6.37 billion by 2031, growing at a CAGR of 5.81%.
Challenges
India’s power sector is on a fast track to growth, but it’s facing some serious hurdles that could put the brakes on progress. One of the main challenges is our electricity grid, the system that delivers power from generation plants to homes and businesses. While we’re making great strides in adding renewable energy sources like solar and wind, our transmission infrastructure just isn’t keeping up.
In fact, there’s over 60 GW of renewable energy ready to go, but it can’t reach consumers due to a lack of transmission lines. To make matters worse, delays in land acquisition, soaring project costs, and outdated grid technology are compounding the issue.
If we don’t make significant upgrades to the grid, India might find it tough to keep up with the growing demand for electricity and meet its renewable energy targets.
In summary, Transformers are the backbone of India’s growing power sector, ensuring efficient transmission as the country expands renewable energy and upgrades its grid. With the transformer market projected to rise from USD 4.5 billion in 2025 to USD 6.37 billion by 2031, key players like TARIL, Shilchar Technologies, Voltamp Transformers, Indo Tech Transformers, and Apar Industries are set to benefit the most from this power sector boom.
Written by Satyajeet Mukherjee
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