Electricity, not oil, should define growth

Many commentators have recently spoken about the idea of an "electrostate". Some see it as a country powered by renewable energy. Others view it as a manufacturing hub for batteries, solar panels, and green hydrogen. My definition is broader.

An electrostate is an economy that organises its growth model around electricity. As India pursues the vision of Viksit Bharat by 2047, we need a model capable of delivering several objectives at once: faster growth, manufacturing competitiveness, technological leadership, energy security, exports, jobs, and strategic autonomy.

Electricity sits at the intersection of all these goals. The next growth cycle will be far more electricity-intensive than the last. AI, data centres, electric mobility, advanced manufacturing, semiconductors, and digital infrastructure run on electricity. India must not merely consume these technologies. It should build an economy around them, and use low-cost electrification to restore cost leadership in steel, cement, aluminium, chemicals, textiles, and automotives, our foundational industries.

This is not about clean energy alone, though it will naturally lead as it is the cheapest source of new power. The real idea is to make electricity the organising principle of economic development.

As a consumer electrostate, we would progressively replace imported oil and gas with electricity across transport, industry, buildings and digital infrastructure. Electricity accounts for only around 21% of our final energy consumption. An electrostate vision will aim to raise it to 60% by 2047.

As a producer electrostate, India would manufacture and export solar modules, batteries, power electronics, electrolysers, transmission equipment, and green hydrogen. Add to this the export of green compute, as India becomes a preferred home for data centres powering global AI. There is a $40-50 billion export opportunity.

China is the only country that is a consumer as well as producer electrostate. That is the model India should replicate. It's tempting to think electricity could do for India what oil did for West Asia. The analogy is useful, but incomplete.

Oil transformed countries like Saudi Arabia and the UAE because it became the foundation of national development. Cheap domestic energy enabled energy-intensive industries such as aluminium and steel, financed infrastructure, powered exports, and built geopolitical influence.

Oil enriched one sector and financed an economy. Electricity can improve the productivity and efficiency in large parts of the economy, because it enables more efficient, precise, automated, and scalable production systems. For a country of India's scale, that distinction matters. A successful growth model cannot rest on one sector. It must create jobs, attract investment, support exports, and strengthen resilience.

Making the electrostate idea real will require action on three fronts.

A stronger electricity push

By 2047, India could need roughly five times today's generation and eight times renewable capacity, so we must treble our pace of clean-power deployment. That means scaling solar, wind and storage faster, building transmission ahead of demand, and adding nuclear and other firm power.

Reducing delivered cost of electricity to industry and data centres

It may be the single most important competitiveness challenge facing India, and the key driver that will push industries needing heat to shift from coal and oil to electricity.

India produces some of the cheapest renewable electricity. Yet industrial consumers rarely benefit fully, since generation is only part of the bill. Between 30% and 45% of industrial electricity costs come from transmission charges, losses, duties, and cross-subsidies rather than generation itself. This higher cost flows into everything else, from food to manufactured goods, eroding productivity and investment attractiveness.

China and Vietnam have engineered their systems to strip out many of these costs for industry. In sectors such as aluminium, polysilicon, chlor-alkali chemicals, electric-arc-furnace steel, and data centres where power can exceed 50% of production costs, their cheaper delivered electricity gives them a structural edge in attracting investment. India needs no tech breakthrough. We need to reform how we set tariffs, how states earn electricity revenues, how we discipline the completion of transmission lines, and how we solve right-of-way and land bottlenecks.

Resilient grid

It should be able to carry electricity from and to all corners of India, with a capacity to absorb energy from millions of rooftop installations and deliver it to the biggest aluminium smelters. We need to rapidly build a grid that is larger, smarter, more flexible, and in the right geographies.

Smarter combination of industrial and trade policy

We have several schemes. The task now is to link demand tools, cost competitiveness, manufacturing scale, exports, standards, and skills into one framework.

In electric mobility, tighter mandates, wider charging networks, and harmonised standards do more than boost EV adoption; they create predictable demand for batteries and power electronics, encouraging long-term manufacturing investment. Our solar sector shows the same pattern: incentives, demand creation, standards, and trade measures work far better as one system than as scattered schemes.

Finally, India should create Export India, modelled on Invest India, a government-backed platform offering market intelligence, buyer facilitation, standards navigation, and deal support, backed by diplomacy. Helping Indian electro-tech companies win global markets will be as important as helping them manufacture in the first place.

India's opportunity is not merely to shift to electricity faster. It is to build something more relevant now: a producer and consumer electrostate that combines energy security, industrial competitiveness, exports, and inclusive growth into a single national mission.

This article is also published on Financial Express. illuminem Voices is a democratic space presenting the opinions of leading Sustainability Thought Leaders, their views do not necessarily represent those of illuminem.

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