Energy subsidies are measures that keep prices for customers below market levels, or for suppliers above market levels, or reduce costs for customers and suppliers. Energy subsidies may be direct cash transfers to suppliers, customers, or related bodies, as well as indirect support mechanisms, such as tax exemptions and rebates, price controls, trade restrictions, and limits on market access.
Subsidies matter because they are used by governments around the world to influence energy producers and consumers
the Government of India (GoI) has used subsidies to support different types of energy, updating two previous reviews of India’s energy subsidies.
Recent increases in fossil fuel subsidies and decreases in renewable energy subsidies have not yet altered larger trends—since FY 2014, India has shifted significant public resources toward a clean energy transition.
In FY 2014, the first year from which we track data, fossil fuel subsidies have fallen by more than half, largely driven by falling world oil prices and policy reforms to diesel and kerosene pricing, while subsidies for RE and EVs have increased over three and a half times, largely due to policy efforts to meet capacity targets. EV subsidies, in particular, have increased over 440 times from a very low baseline in FY 2014
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