India clarifies captive plant ownership across corporate groups

The amendments are intended to reduce regulatory ambiguity, amongst others.

India has notified the Electricity (Amendment) Rules, 2026, revising provisions governing captive generating plants to provide clarity for the industry and support the country’s energy transition.

The amendments are intended to reduce regulatory ambiguity, simplify compliance, and enable industries to more easily generate electricity for their own use.

It also clarifies ownership requirements by recognising structures that involve subsidiaries, holding companies, and related group entities.

In line with this, captive status will now generally be assessed across an entire financial year, whilst partial-year verification may apply during the first or last year of ownership of a captive plant.

Moreover, under the revised framework, state or union territory governments may designate nodal agencies to verify captive status for intra-state consumption starting 1 April 2026.

Further, the amendments also address the treatment of cross-subsidy surcharge and additional surcharge. Distribution licensees will not levy these charges whilst captive status verification is pending if the required declarations are submitted.