India Unveils Landmark National Policy on Geothermal Energy

India Launches First National Geothermal Energy Policy

The Union Ministry of New and Renewable Energy (MNRE) officially launched India's first national policy on geothermal energy on September 15, 2025. This landmark policy aims to establish geothermal energy as a crucial component of the nation's renewable energy landscape, significantly contributing to India's ambitious 2070 Net Zero Goal and bolstering energy security.

Briefing the media, Santosh Sarangi, Secretary at the Ministry of New and Renewable Energy, highlighted the policy's comprehensive framework for the exploration, development, and utilization of India's untapped geothermal resources.

Strategic Objectives and Potential

The new policy outlines a clear vision for integrating geothermal energy into India's clean energy transition. The Geological Survey of India (GSI) has identified an estimated potential of approximately 10 Gigawatt (GW) from 381 hot springs and 10 geothermal provinces across the country. Key objectives of the policy include:

• Improving research capabilities in geothermal exploration, drilling, reservoir management, power generation, and direct-use applications.
• Promoting collaboration between local ministries, research institutes, and international geothermal development bodies to adopt global best practices.
• Deploying geothermal heating and cooling solutions for diverse sectors such as buildings, agriculture, and industries.
• Encouraging advanced geothermal exploration, including deep and multilateral drilling, and the repurposing of abandoned oil and gas wells.
• Establishing a robust public-private ecosystem for long-term geothermal development.

The policy also emphasizes diverse applications beyond electricity generation, including space heating and cooling, agriculture (greenhouses, cold storage), tourism, and desalination.

Incentives and Implementation Framework

To attract investment and accelerate development, the policy allows 100% Foreign Direct Investment (FDI) in geothermal projects. It also offers a range of fiscal incentives, including concessional loans, Viability Gap Funding (VGF), sovereign green bonds, tax holidays, import duty and GST exemptions, and accelerated depreciation benefits. Project support will be provided for up to 30 years, with potential extensions based on resource availability. The MNRE will serve as the nodal body for implementing these projects, facilitating a streamlined single-window clearance system for permits and approvals.

Pilot Projects and International Collaboration

In a move to assess viability and potential, five pilot projects have already been sanctioned under the new policy. These initiatives include generating electricity from deep oil wells in Rajasthan in collaboration with Vedanta and IIT Madras, utilizing geothermal heat to warm an army base in Arunachal Pradesh, developing cooling systems in Hyderabad by Osmania University, mapping shallow geothermal potential nationwide by IIT Delhi, and demonstrating integrated solar-geothermal power generation.

India is also actively seeking technology partnerships with countries that have advanced geothermal industries, such as the United States, Iceland, Norway, and Indonesia, to incorporate global best practices and technical expertise.