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India’s new Nationally Determined Contribution for 2031 to 2035 set high targets and could reshape trade ties with partners and rivals
On 25 March, India’s cabinet approved the country’s Nationally Determined Contribution (NDC) for the period 2031 to 2035, with the objective of reducing emissions intensity by 47% from 2005 levels and increasing the share of non-fossil-fuel-based energy resources in installed electric power capacity to 60% by 2035. According to the government’s estimates, emissions have already been reduced by 35% and the share of non-fossil-fuel-based energy resources is currently 52.57%. New Delhi also plans to create a carbon sink of 3.5 to 4.0 billion tonnes of CO₂ equivalent through forest and tree cover by 2035. The updated NDC commitment, it declared, is “a major milestone” in the country’s journey to achieve net zero emissions by 2070.
India has consistently showcased impressive progress in its ambitious NDC commitments, often meeting targets ahead of schedule. For example, the goal of achieving 50% non-fossil-fuel power capacity, initially set for 2030, has already been reached. This achievement lays the groundwork for even more ambitious goals in the future.
The onward journey, however, may be tougher. Take, for instance, the enormous quantity of resources needed to achieve the goals. To meet the NITI Aayog’s goals for 2050, it is estimated that US$5.15 trillion would be required between 2025 and 2050. This cannot be made up by multilateral funding alone, and currently no specific pathways have been identified to generate such resources, apart from the broad vision of private sector involvement. Similarly, there is no clarity on how these targets and their achievements would translate across sectors. India is yet to officially mandate specific, legally binding emission reduction targets for individual sectors – such as, cement, steel, or transport.
The world could witness the birth of a new competitor in the global green technology supply chain.
More important questions, however, are about how India’s march towards net zero impacts its relations with its partner countries. For example, will India’s reduced reliance on fossil fuel, which is still only a long-term goal – change its relations with Australia? At the other end of the spectrum is the China question. How will India’s relations with China – a rival country to say the least – evolve, given Beijing’s domination over green supply chains.
India is Australia’s fifth-largest trading partner, with two-way trade in goods and services valued at A$54.4 billion in the financial year 2024–25. Coal exports, largely high-quality coking coal for steelmaking, from Australia dominates the bilateral trade. However, over the years, India’s import of coking coal from Australia has fallen, in view of India’s policy of diversifying its coking coal imports and increasing domestic production. Compared to financial year 2022, when Australia’s share in India’s coking coal import basket was 78%, it declined to around 60% in 2024. Imports of PCI coals from Australia, too, have fallen sharply by 40% over the same period. The void has been filled by higher shipments from the US, Canada, and particularly Russia. India’s goal of greater energy security and its march towards lesser reliance on fossil fuels could accentuate the decline in the coming years.
However, instead of marking a break in trade relations, the future could present significant economic opportunities around clean energy. For that, both India and Australia will have to reconfigure their trade relations, embracing India’s growing needs for clean energy, critical minerals, and technology. Some of these strategic shifts are already in the making, through the India–Australia Economic Cooperation and Trade Agreement (INDAUS ECTA) that came into force in 2022.
In the past year, India has flagged China’s dominance in clean energy gear as a potential risk to its low-carbon transition, advocating a more diverse global supply chain and targeted incentives. However, that appears merely aspirational, as India still imports 50% of its solar cells and modules, along with critical battery minerals from China. Although India has rapidly built enough solar-module-making capacity since 2020, it still depends heavily on China for the cells that go into those panels and almost entirely for other upstream products, such as wafers and polysilicon.
As India races to keep its green energy transition on track, a massive growth opportunity for the Chinese green energy technology sector could be created in the short to medium term. However, if India’s self-reliant mission (Atmanirbhar Bharat) succeeds and that reliance on Beijing can be dismantled, the world could witness the birth of a new competitor in the global green technology supply chain. This would not be without fierce competition between India and China, with the latter doing everything possible to hold on to its supremacy.
What may unfold in the coming years is a broad reshaping of India’s trade ties with its partners and rivals. Therefore, the true test may be not just in meeting emission targets but in whether India can build the financial frameworks, domestic industrial capacity, and strategic partnerships needed to make its low-carbon future both credible and sustainable.
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