India is the third-largest producer and consumer of electricity globally after China and the United States. In FY 2024-25, the country generated 1824 TWh of power, of which 25% came from non-fossil sources. India has achieved near-universal household electrification, though the quality and reliability of supply remain uneven across regions.

Electricity in India is generated by both public and private sector utilities, transmitted through a unified national grid, and distributed primarily by state-owned distribution companies. The sector has undergone significant reforms since the Electricity Act of 2003, which introduced competition, open access, and independent regulation. Despite rapid growth in generation and transmission capacity, the distribution segment continues to face financial stress due to high technical and commercial losses, tariff constraints, and subsidy burdens.

India has also emerged as a global leader in renewable energy deployment, with renewables accounting for 89% of capacity additions in FY 2024-25. The country has set ambitious targets to achieve 500 GW of non-fossil fuel capacity by 2030 as part of its transition toward a low-carbon energy system.

Electricity was first introduced in India in 1879 with the demonstration of electric light in Kolkata, followed by the country's first hydroelectric power station at Darjeeling in 1897. During the colonial period, electricity supply was largely developed by private companies serving urban centers and industries.

After independence in 1947, the Electricity (Supply) Act, 1948 established CEA for planning at central level and State Electricity Boards (SEBs) at state level. SEBs oversaw generation, transmission, and distribution within each state. The sector expanded rapidly through successive Five-Year Plans, with coal and large hydroelectric projects forming the backbone of India's power system.

However, not every state was rich in coal or hydro resources. This lead them to depend on diesel generators. In 1960s, regional grid was conceptualized to supplement power from neighboring states.

By 1970s, REC was established to finance rural electrification. Generation was not able to keep up with growing demand. This, along with the oil price shocks lead central government to nationalize coal mines and establish CIL, NTPC and NHPC.

In 1980s, rural electrification accelerated. However, due to vote-bank politics by state governments, tariffs were kept low which strained their finances. In order to further develop the sector, PFC was established for financing needs.