India Launches First National Policy on Geothermal Energy

India on September 15, 2025, launched its first national policy on geothermal energy, marking a strategic step towards diversifying its renewable energy mix. The policy, announced by the Ministry of New and Renewable Energy (MNRE), is designed to unlock the country’s geothermal potential through incentives, international collaborations, and regulatory clarity.

Policy Highlights and Incentives

The new policy encourages joint ventures between geothermal developers and oil, gas, and mineral companies. It also introduces fiscal incentives such as tax holidays, import duty exemptions, and viability gap funding to attract investment. Projects will be supported for up to 30 years, with extensions possible depending on resource availability.

Additionally, the policy promotes 100% foreign direct investment (FDI) and concessional loans, aiming to draw both domestic and global players into India’s geothermal space.

Repurposing and Innovation

A key element of the plan is the repurposing of abandoned oil and gas wells, which can be adapted for geothermal exploration. The policy also supports the deployment of ground source heat pumps for heating and cooling, expanding the use of geothermal resources beyond electricity generation.

Such innovations are expected to lower development costs while maximising the use of existing infrastructure.

Global Context and Relevance

Globally, geothermal power capacity reached 15.4 GW at the end of 2024, led by the United States, Indonesia, and the Philippines. Countries such as Germany are fast-tracking geothermal expansion, while U.S. technology companies are actively seeking low-carbon electricity sources to meet rising artificial intelligence (AI) demand.

India’s entry into this sector is therefore timely, aligning its renewable ambitions with international best practices and creating opportunities for cross-border collaboration.

India’s Geothermal Potential

The MNRE has identified 381 hot springs and 10 geothermal provinces across the country, including regions in Ladakh, Himachal Pradesh, and Gujarat. These areas hold significant promise for power generation as well as direct heating applications.

By formalising a national framework, the government hopes to accelerate exploration and establish India as a competitive player in geothermal energy.

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Conclusion

The launch of India’s first geothermal energy policy represents a milestone in the country’s clean energy transition. With fiscal incentives, FDI support, and opportunities for technological innovation, the policy aims to position India among leading geothermal nations. By tapping subterranean heat, India not only diversifies its renewable portfolio but also strengthens its long-term energy security.

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