Procurement as Policy: Recalibrating India’s Green Transition Process

India’s green transition is often discussed as a question of technology adoption, consumer incentives, or startup innovation. But recent developments suggest that something more consequential is underway: the quiet emergence of a procurement-led, scale-first model of green industrialisation.

Two examples, published yesterday, illustrate this shift:

First, the Central government has tendered out the manufacturing, deployment, operation, and maintenance of 10,000+ electric buses to a group of EV firms, with companies such as PMI Electric, EKA Mobility, and Olectra Greentech emerging as winners. Apparently, established incumbents like Tata Motors and Ashok Leyland missed out in the tender process. The e-buses will be provided to four large city transport authorities.

Second, the Uttar Pradesh government has awarded a large contract to Sahaj Solar to manufacture, deploy, and maintain distributed solar power generation systems (ranging from 100 KW to 2 MW) across government premises. The produced electricity will be procured by a state power utility.

These, to me, are not isolated procurement decisions. They reflect a deeper structural turn.

From Asset Purchase to Infrastructure-as-a-Service

What unites these cases is not the technology involved—electric buses or solar power—but the procurement architecture.

The state is no longer merely buying assets. It is procuring outcomes and services:

mobility capacity rather than buses,

electricity generation rather than panels,

long-term performance rather than one-time delivery.

Manufacturing, deployment, operation, and maintenance are bundled together. Public agencies act as regulators and overseers, not day-to-day operators. This aligns incentives across the entire lifecycle of infrastructure.

Crucially, this model solves three Indian constraints simultaneously:

Fragmented demand is aggregated at scale

Financing becomes viable due to long-term service contracts

Firms can invest in labour, up-skilling, and systems with confidence

This is why the model matters.

Green Transition as Re-Industrialization 

Seen correctly, this is not merely decarbonisation policy. It is green re-industrialization.

Large-scale procurement:

anchors domestic manufacturing,

creates installation- and O&M-heavy employment,

lengthens labour hiring and skilling horizons,

embeds green technologies into India’s 

physical economy rather than confining them to pilot projects.

This is how infrastructure transformations have historically succeeded—railways, power grids, telecom backbones—not through atomised adoption, but through scale first, diffusion later.

Stress-Testing the Model

That said, scale introduces risk. A serious policy framework must confront these directly.

State capacity risk:

Large contracts require sustained monitoring over 10–15 years. Weak oversight could lead to asset degradation and declining service quality.

Concentration risk:

Bundled tenders can favour a few firms, creating quasi-monopolies and systemic fragility.

Financial transmission risk:

Delayed payments by municipalities or DISCOMs can transmit stress to banks and NBFCs, as India’s power and highway sectors have previously shown.

Technology lock-in risk:

Mass procurement risks freezing sub-optimal battery chemistries, charging standards, or storage architectures too early.

Labour bottlenecks:

Scaling assets faster than technicians, operators, and maintenance staff can degrade reliability.

These risks are real—but they are manageable, not fatal.

Improving the Model: Consortium-Led Procurement

The most important refinement is institutional, not technological.

Large green infrastructure tenders should mandate consortium-based participation, rather than single-firm bids—on the model already adopted by the IndiaAI Mission and the India Semiconductor Mission.

A consortium structure:

modularises capability (manufacturing, software, O&M, finance, skilling),

structurally includes startups and specialised firms,

reduces over-concentration risk,

embeds innovation and upgrade pathways.

This transforms procurement into an ecosystem-shaping tool, not just a purchasing mechanism.

In parallel, contracts should be explicitly:

innovation-linked (upgrade clauses, pilots, domestic R&D),

startup-linked (mandatory participation thresholds),

labour-linked (employment and localisation targets),

skilling-linked (formal pipelines with ITIs and national skilling frameworks).

Benchmarking by Example, Not by Circular

Another critical design choice is how the Centre leads.

Instead of issuing abstract directives, the Central government should:

run a limited number of gold-standard tenders,

publish full documentation and performance metrics,

allow states and PSUs to replicate and adapt.

This is how institutional learning actually diffuses in India. Demonstration beats instruction.

Urgency Without Paralysis

India does not have the luxury of waiting for perfect governance conditions. The green transition is also a race against industrial irrelevance.

Caveats must improve execution, not stall it. Safeguards must be embedded, not endlessly litigated. Iteration must be designed into contracts.

The Centre has already demonstrated—through AI and semiconductor missions—that it can manage coordination complexity at scale. Green infrastructure is operationally simpler by comparison.

Not One Track, But Two

Importantly, this model should not absorb the entire green transition.

Mass procurement is appropriate for:

urban electric mobility,

government and large-enterprise solar deployment,

grid-scale BESS,

public or quasi-public infrastructure.

It is not appropriate for:

household rooftop solar,

agricultural pumps,

MSME energy transitions.

Schemes such as PM Surya Ghar Muft Bijli Yojana and PM KUSUM should remain demand-side driven—through nudges, subsidies, and credit facilitation—preserving space for small firms and local innovation.

The result is a dual-track architecture:

scale and certainty where necessary,

plurality and experimentation where beneficial.

Conclusion: Momentum Before Perfection

What is emerging—piecemeal but unmistakably—is a procurement-led model of green re-industrialization. It is not theoretical, and it is not futuristic. It is already being executed in electric mobility, distributed solar, and other green infrastructure domains. The task before policymakers is not invention, but recognition, standardisation, and scaling.

India’s green transition will not succeed by waiting for millions of atomised, perfectly timed decisions to aggregate into systemic change. Nor will it succeed if every legitimate caveat is allowed to slow execution. Large-scale deployment must proceed first, with safeguards, innovation linkages, and labour pipelines embedded into the process—not used as preconditions for inaction.

The central government is uniquely positioned to lead this phase: by executing a small number of benchmark, consortium-led procurements that demonstrate how scale, innovation, finance, and skills can be aligned in practice. States need not experiment independently; they can replicate, adapt, and accelerate.

At the same time, this cannot—and should not—be the only path. Decentralised schemes for households, agriculture, and MSMEs must continue to rely on incentives, nudges, and credit support, preserving space for small firms and local innovation. The green transition, therefore, must be dual-track: scale-driven where infrastructure and certainty matter, and market-driven where flexibility and experimentation matter.

The real risk for India is not imperfect design. It is hesitation. In an era where climate action and industrial competitiveness are converging, momentum itself is a strategic asset.

India must build that momentum—at scale—now.