Open a Company in the Energy Sector in India
Updated on Wednesday 29th August 2018
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The energy sector in India is comprised of some of the most diversified energy sources at a global level. The country’s energy sector is still based on the conventional sources of energy, such as natural gas, coal or lignite, but it has also shifted its focus to renewable sources of energy, through the use of wind or solar energy.
Investors who want to open a company in India should know that the energy demand in this country has increased in the last years and, most notably, so did the foreign direct investments in this sector, accounting for US $12,97 billion between 2000 and 2017. Our team of specialists in company registration in India can offer in-depth advice on the regulations addressed to foreign investments in the energy sector.
Indian initiatives for promoting green energy
India is one of the largest energy markets at a global level, due to the large size of its population (of over one billion citizens). As the country is largely based on conventional sources of energy which have a negative impact on the environment, the local government created various initiatives to sustain green energy projects. Thus, investors starting a company in India should consider the following:
- Direct Benefit Transfer Scheme, created for a better allocation of subsidies in the energy sector;
- The National Policy on Biofuels – 2018, created to sustain the development of employment, reduce the negative impact on the energy usage over environment and others;
- Energy Efficiency Services initiative, which had as an impact the reduction of greenhouse gases;
- Rent a Roof policy, created for achieving by 2020 renewable energy with a total capacity of 175 GW.
Advantages of opening an Indian energy company
Depending on the specific activities developed by the Indian energy company, the local government can provide a wide range of tax benefits and incentives for the businesses operating in the green energy sector; our team of consultants in company formation in India can advise on these regulations, but it is important to know that companies can obtain a 10 years tax break and custom duty exemptions for the import of machinery used in this sector.
Furthermore, the sector is sustained through the Renewable Purchase Obligations, which imposes energy companies (operating as energy distributors) to purchase a part of their electricity from renewable sources; businessmen are invited to contact our team of agents, who can provide more details on how to open a company in India in this industry.