What is India's pathway to limit global warming to 1.5°C?

To align with the Highest Possible Ambition scenario, transport sector needs to undergo a structural shift from oil to electricity. Oil’s share falls sharply from roughly 89% of final energy in 2023 to 67% in 2035 and about 13% by 2050, while electricity rises to 23% in 2035 and then 80% in 2050, becoming the dominant energy carrier. Biofuels and hydrogen play only minor roles, indicating that decarbonisation is driven primarily by direct electrification. To achieve these benchmarks the rate of electrification needs to move way faster than the current rate.

Despite major efficiency gains, total final energy demand still increases due to growing transport activity, from 5230 PJ, in 2023 to around 7000 PJ in 2050. Emissions rise slightly in the near term but then decline sharply, reaching roughly 105 MtCO₂ by 2050 as electrification and power sector decarbonisation accelerate.

India’s policy efforts focus on cost-effective and scalable interventions. At COP26, India committed to ambitious EV deployment targets by 2030, including 80% of two- and three-wheeler sales, 40% of buses, 70% of commercial vehicles, and 30% of private cars.⁷7 Progress toward these targets are uneven. Overall EV penetration in India stood at only 6.5% as of 2024. The growth has been fastest in the two and three wheeler segment with ~60% new EV sale in two wheeler and ~20% in three wheeler.

National programs such as the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme and PM E-DRIVE programme alongside state-level EV policies, provide targeted subsidies and incentives for priority segments. Urban transport policies increasingly emphasise bus electrification such as PM eBus Sewa, metro rail expansion, and pilot projects for integrated mobility systems. Financing relies heavily on a combination of public funding, concessional finance from multilateral development banks, and public–private partnerships, particularly for electric bus deployment and charging infrastructure.

At the same time, India is pursuing elements of an industrial strategy by linking transport decarbonisation with domestic manufacturing ambitions. Production-linked incentive (PLI) schemes for advanced batteries and EV manufacturing aim to build domestic supply chains, reduce import dependence, and create employment opportunities.⁸8

However, regulatory frameworks remain less stringent than in advanced economies, with no binding phase-out date for internal combustion engine vehicles and continued growth in road infrastructure investment. This creates a hybrid policy landscape combining ambition in selected segments with incremental progress elsewhere.

Looking ahead, India will need to strengthen policies that go beyond vehicle electrification to include systemic modal shifts. This includes expanding high-quality public transport, promoting non-motorised transport, and improving freight logistics through rail and waterways.