India's power transmission set to rise amidst $96.2b investment pipeline

The National Electricity Plan accelerates a multi-year transmission expansion cycle.

India’s power transmission sector is set for a multi-year expansion, supported by a planned INR9 lakh crore ($96.2b) investment pipeline under the National Electricity Plan (FY23–32), according to Motilal Oswal Financial Services.

The report states that this investment cycle, which began around FY22–23, has already driven higher order books, stronger revenues, and improved profitability across transmission and distribution equipment companies.

It adds that demand momentum is expected to continue over the coming years, driven by domestic infrastructure development and overseas demand.

This comes as India’s power sector undergoes a structural shift as it integrates higher volumes of renewable energy (RE) into the national grid.

The report notes that even partial delivery of transmission targets under the National Electricity Plan will generate sustained demand for transmission equipment.

It also highlights increased investment in high-voltage direct current systems as part of long-distance transmission requirements linked to RE integration, with these projects expected to support continued order inflows for equipment manufacturers.

The report identifies supply constraints in transformer manufacturing as a near-term limitation, stating that production capacity has not kept pace with rising demand, resulting in longer delivery timelines.

Several companies are expanding capacity, with new additions expected over the next two to three years.

Export demand forms another key driver, with the report pointing to a supply gap in global transformer markets.

Particularly in the United States and Europe, demand is rising due to RE deployment, data centre expansion, and electrification. Indian manufacturers are supplying into these markets.

The report also notes increasing demand for battery energy storage systems as India expands RE capacity, stating that storage infrastructure will support grid stability whilst adding to transmission-related equipment demand over the next decade.

Motilal Oswal maintains that the combination of domestic investment, export opportunities, and grid modernisation supports a positive outlook for the sector.

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