SUKUMAR SAH
For decades, India’s industrial geography has been defined by coal, ports, and political patronage. The heavy industries — steel, cement, power, and mining — clustered around coal belts in Jharkhand, Chhattisgarh, and Odisha, while coastal Gujarat and Maharashtra emerged as gateways for petrochemicals and manufacturing exports.
But that familiar map is beginning to blur. As India pursues its net-zero ambitions and global investors increasingly tie capital to sustainability metrics, climate policy is quietly redrawing the contours of Indian industry.
At the heart of this shift lies the new economics of energy. Solar and wind power are now cheaper than coal on a per-unit basis, and renewable clusters are emerging where sunlight and wind are most abundant — Rajasthan, Gujarat, Tamil Nadu, and Karnataka.
Investments chasing green hydrogen, battery storage, carbon capture tech
Industrial investors, once fixated on proximity to coal mines, are now drawn to regions with reliable renewable capacity and grid access. The result: a geographic tilt from the mineral-rich east and centre to the sun-soaked west and south.
This transition carries both promise and peril. The western corridor — from Kutch to Coimbatore — could become India’s green manufacturing heartland, hosting everything from solar panel factories to battery and electric vehicle (EV) plants.
But eastern states, dependent on coal royalties and thermal plants, face an economic vacuum. Jharkhand and Chhattisgarh derive over 15 per cent of their state revenues from coal-related activity. As decarbonisation accelerates, they risk not just job losses but fiscal stress. The politics of green growth will thus be shaped as much by who loses as by who leads.
Climate policy has become the new industrial policy. The Centre’s push for green hydrogen, battery storage, and carbon capture technologies is already creating a new pattern of subsidies and incentives.
Rajasthan and Gujarat, with vast arid land and high solar potential, are front-runners for hydrogen projects. Tamil Nadu and Karnataka, with mature industrial ecosystems and wind corridors, are attracting EV and renewable investments. Meanwhile, the central states that once powered India’s growth are struggling to reinvent themselves.
There’s also a federal dimension to this realignment. Richer states with stronger governance and better infrastructure are better placed to attract clean-tech investment. Poorer states, often burdened by discom losses and land acquisition hurdles, are being left behind.
Unless the transition is managed with fiscal transfers, retraining programmes, and targeted support, India could see a new kind of regional imbalance — a “green divide” replacing the old industrial one.
The private sector, too, faces a strategic choice. For India Inc., decarbonisation is no longer just about compliance or global reputation. It determines access to export markets, especially as the EU and the US impose carbon border taxes. Companies aligning early with the renewable geography will gain not just cost advantage but policy goodwill.
Climate policy, then, is doing what liberalisation did three decades ago — redrawing India’s industrial map. The question is whether this new geography of growth will be inclusive, or whether green prosperity will again be concentrated in the same few states that always got ahead.