India's Power Retail Market Set For Shake-Up As Draft Bill Opens Doors To Private Firms
This development is likely to end the dominance of state-run power distributors across most states.
India plans to open its retail electricity market to private players nationwide, aiming to end the dominance of state-run power distributors across most states, reported news agency Reuters citing a draft bill from the federal power ministry on Friday.
The proposal could enable private firms such as Adani Enterprises, Tata Power, Torrent Power, and CESC to expand their footprint across the country.
A similar reform attempt in 2022 had faced pushback from state-run distribution companies. Currently, only a few regions including the National Capital Region, Odisha, and industrial states like Maharashtra and Gujarat have privatised power distribution, while most areas remain under state control and weighed down by heavy financial losses.
The Centre has been urging state utilities to curb losses, improve balance sheets, and modernise ageing infrastructure. Earlier this year, Uttar Pradesh, India's most populous state, invited bids to privatise two of its four distribution companies.
As of June 2025, state power utilities owed generators around $6.78 billion, leading to a liquidity crunch for independent power producers and restricting credit flow to the sector, according to the Institute for Energy Economics and Financial Analysis.
The draft bill also proposes allowing multiple private retailers to operate in the same distribution area, which is a provision currently missing from the Electricity Act.
