Development Watch – Week #1 April’25

Development News

---

India’s solar PV manufacturing capacity at 125 GW

India’s solar PV module manufacturing capacity is set to rise to 125 GW by 2030 from the current 80 GW, according to Union Minister of New and Renewable Energy. Solar cell manufacturing capacity will also increase from 25 GW to 40 GW soon. India aims to achieve 500 GW of renewable energy capacity by 2030. India has emerged as the world’s third largest producer of renewable energy. It will achieve the target of 500 GW of renewable energy capacity by 2030 from 220 GW currently. Despite having 17 per cent of the global population, India’s greenhouse gas emission contribution is less than 4 per cent. Gujarat state has become a state of choice for industrialists and investors. Ease of doing business, pro-people policies and infrastructure facilities are key.

India backs EV tariff cuts

India plans to lower import tariffs on electric cars. Requests to delay the cuts by 4 years from local automakers are being rejected. Automakers are lobbying with the Prime Minister to delay any cut in EV tariffs until 2029. They then propose a phased reduction to 30% from as high as roughly 100%. But currently the government is prioritizing closing a trade deal with the US government. The auto sector will be part of the first tranche of tariff reductions in a planned bilateral trade deal. The government is of the view that the auto sector has been protected for far too long. India is world’s 3rd largest auto market. An immediate tariff cut would favor Tesla, which has finalized showrooms in Mumbai and in New Delhi and plans to sell imported cars in India. Society of Indian Automobile Manufacturers and Commerce Ministry have not yet issued any statements. Domestic manufacturers like TATA Motors and Mahindra have invested heavily in EVs and will be at a disadvantage later. India has subsidized over 1 million electric two wheelers in FY 2024-25 under the PM e-drive scheme. Ministry of Heavy Industries has also reported a 21% increase in two-wheeler sales. There has been a 57% growth in e-3W sales compared to previous years.

Any agreement with the US would set a precedent for ongoing trade talks with EU and Britain. At present, EVs account for only 2.5% of total car sales of 4.3 million in 2024. The government wants to increase this to 30% in 2030. It is worth noting that sales of Tesla are being negatively impacted due to protests over Elon Musk. Sales in key European markets have continued to decline in March. There is increased competition from Chinese manufacturers like BYD and backlash against (far-right) political views of Elon Musk. There has even been targeted vandalism on Tesla dealerships and vehicles in cities like Rome, Berlin and Stockholm, signaling a “fall from grace”.

Job-related challenges in Renewable Energy sector

India’s renewable energy sector aims for 500 GW capacity by 2030, creating more jobs despite a slower hiring pace this year. Youth dominate the sector, with high demand for engineering, project management, data analytics, and sustainable energy roles. Government initiatives have boosted boost growth. However, high attrition and skill gaps pose challenges. There is a need for improved training and retention. Employment in the renewable energy sector is projected to grow by 18.9% in the current financial year. The RE sector remains a driver for job creation, particularly in contractual roles. Up to 27% of the employees are aged between 26-30, and 28% in the 31-35 age bracket. Companies are also seeking professionals in solar, wind, and hybrid energy systems. There is a growing demand for PV technicians, roofers, production operators, storage operators, waste management specialists, energy auditors, and operational support roles. Regionally, Rajasthan, Gujarat, Karnataka and Tamil Nadu are leading employment generators in the sector. Government schemes that have led to growth are PM Surya Ghar Muft Bijli Yojana, National Green Hydrogen Mission, PM KUSUM, and Solar PV Module PLI Scheme.

Mumbai Redevelopment projects worth Rs. 1,200 Crores

Mahindra Lifespace Developers Ltd has secured two redevelopment projects for housing societies. Located in Mumbai’s Lokhandwala Complex and Andheri West, with a project value of approximately Rs 1,200 crore. These projects will be carried out under Maharashtra’s cluster development scheme. The company has been appointed as the preferred partner for the redevelopment of the two residential societies. ‘Mahindra Lifespaces’ and ‘Mahindra Happinest’ develops projects in the residential segment. ‘Origins by Mahindra’ and ‘Mahindra World City’ brands work on integrated cities and industrial clusters.

REITS to share office markets in 2025

The growing maturity of Real Estate Investment Trusts (REITs) is attracting domestic and foreign institutional investors in Indian commercial real estate. This instrument is expected to play a significant role in shaping the country’s office space market this year. “Indian Office Market for 2024” was released by Anarock Commercial Leasing & Advisory. There has been a net absorption of 50 million sq ft across top 7 cities. India is also a preferred destination for Global Capability Centres (GCC). REITs are attracting both domestic and international institutional investors. The institutional capital inflow will enhance the quality of office assets, and promotes professional management practices. Recently, Sattva Group and Blackstone-sponsored Knowledge Realty Trust has filed the Draft Red Herring Prospectus (DRHP) with SEBI. This will help them launch their REIT public issue for raising up to Rs. 6,200 Crores. There are four listed REITs in India owned by Brookfield, Embassy Office Parks, Mindspace, and Nexus Select Trust. Organizations are reimagining their office spaces to enhance collaboration, innovation, and employee well being. WeWork India and Smartworks, along with fractional real estate platforms, are planning to launch public issues. They have also filed DRHPs to raise funds to expand business.

Maharashtra Government Plan for Mumbai’s iconic buildings

The Maharashtra government is implementing a framework to develop iconic buildings in Mumbai through public-private partnerships. This initiative aims to enhance the city’s global stature with regulatory and financial incentives for developers, promoting world-class design, sustainability, and smart infrastructure.

Air Passenger Traffic to rise by 9% CAGR

Air passenger traffic in India is projected to grow at a 9% CAGR between FY2025 and FY2027. It is set to reach approximately 485 million passengers by FY27, according to CareEdge. This growth is driven by increasing air travel demand and expanded airport and airline capacities. Significant investments in airport infrastructure and greenfield airports are also contributing to this V-shape recovery. International passenger traffic is likely to grow at a faster pace. There has been induction of more wide-body aircraft from FY-26.

Sustainable Aviation Fuel for reducing pollution

India has great potential to produce Sustainable Aviation Fuel (SAF) using available biomass waste and feedstocks like rice and wheat straws. Airbus is working with the Indian Institute of Petroleum (IIP), Dehradun, to develop new SAF production methods. Policies and government support are vital for scaling production and making SAF more cost-competitive. India has a lot of attributes to become a great SAF producer. The first one is the availability of feedstock, there is a lot of biomass waste, used cooking oil (and) municipal solid waste that can be recovered. The project is being enabled by SAF and CDR (Carbon Dioxide Removal) Development Sustainability Organization at Airbus. The rice straws or the wheat straws that are burnt every year that makes for very bad air quality in Delhi, these could be used as a feedstock for SAF. By 2040 or 2050, India could be producing 100 million tons of SAF. The International Air Transport Association (IATA) represents around 340 airlines, including Indian carriers, that account for more than 80 per cent of the global air traffic.

Lok Sabha passes Carriage of Goods by Sea Bill

The Lok Sabha has passed the Carriage of Goods by Sea Bill, 2024. It is aimed at modernizing the legal framework for maritime commerce. Additionally, the Indian Ports Bill, 2025, was introduced to enhance port management and development. It also addresses pollution control, and ensure compliance with global maritime standards. This bill includes provisions for port conservation and introduces adjudicatory mechanisms for resolving port-related disputes efficiently.

25,000 km of highways to be widened to 4-lanes

India plans to upgrade 25,000 km of 2-lane highways to 4-lanes. The budget is Rs. 10 lakh crores. It aims to reduce road accidents significantly. Additionally, 16,000 km of national highways will be expanded to 6 lanes for Rs. 6 lakh crores. Key projects in J&K include the construction of longest sub-zero temperature tunnel in Asia at Zojila. Road construction works worth Rs. 2 lakh crores are under way in J&K, where 105 tunnels are being built. The DPRs (detailed project reports) of the projects are getting ready and the work would be completed in 2 years. Work on Jammu-Srinagar highway is also under progress, where 22/36 tunnels have also been constructed. This will reduce the travel time between Jammu & Srinagar from 7 hours to 3.5 hours. Work on Expressway between Delhi-Katra is also in progress. It will reduce travel time to 6 hours from the present 12 hours.

---