India needs $140 billion (£91bn) every year until 2040 to meet the country’s electricity demand.
That’s according to a report by the International Energy Agency (IEA), which stated the nation needs an investment worth $110 billion (£71.5bn) annually in energy supply and $30 billion (£19.5bn) per year in efficiency.
Although India’s energy demand has almost doubled since 2000, its demand per capita in 2040 would still be 40% below the world average.
The country still faces “some important” challenges in the energy sector as around 240 million people lack access to electricity, the report added.
It suggests policy makers to redouble efforts to attract investors, particularly in more efficient and low carbon technologies.
However, the report also added India is set to contribute to the rise in global energy demand in the next 25 years more than any other nation.
India has pledged to produce 40% of electricity from “non-fossil fuel” energy sources by 2030 as part of its plans to tackle climate change ahead of the COP21 conference in Paris.
IEA Executive Director Fatih Birol said: “India’s energy transformation requires three things: investment, investment and investment. A lot is being done already to overhaul the energy regulatory system and get the incentives in place; this is vital as India will need to call upon a wider range of investors and sources of finance than it has in the past.”