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Amid rising energy demand, India bets big on offshore wind, revamping leasing norms to secure RTC power and strategic depth.
Aiming to install 30 GW of offshore wind capacity by 2030, India seeks to monetise its potential of over 70 GW of commercially viable offshore wind. ‘Offshore Wind’ refers to renewable energy harnessed from wind projects installed within coastal states’ Exclusive Economic Zone (EEZ) waters, transmitted to ports, and subsequently purchased by states or distribution companies. India must reengineer its regulatory framework for leasing identified seabed sites as it embarks on harvesting offshore wind energy.
India’s National Offshore Wind Energy Policy set the foundation for auctioning 37 Gigawatts (GW) of offshore site leases by Financial Year (FY) 2030. A Ministry of New and Renewable Energy (MNRE) Strategy Paper for offshore wind energy expansion focuses on eight promising zones to derive wind energy along the Gujarat and Tamil Nadu coasts. The National Institute of Wind Energy (NIWE)—an MNRE’s autonomous body—is mandated to conduct global competitive bidding for offshore wind energy projects. Developers will receive contractual rights for wind energy exploration and utilisation in designated blocks upon selection. It outlines three development models:
Model A (1 GW): Developers bid to construct 0.5-1 GW projects in Gujarat and Tamil Nadu within four years,
Model B (14 GW): Offers exclusivity over the seabed during a two-year survey period; the developer will participate in site lease allocation through competitive bidding, based on the proposed seabed lease fee, with ‘Viability Gap Funding’ (VGF) available, and
Model C (22 GW): Developers bid for project development or seabed allocation after completing necessary surveys without VGF.
The Ministry of External Affairs (MEA) notified the Offshore Wind Energy Lease Rules in December 2023, where a ‘lease’ secures rights from the Central Government over seabed sites within the EEZ under a fixed-term agreement against payment of the lease amount. These ‘Designated Lease Areas’ enclose sea expanses ranging from 25 to 500 sq km, where entry restrictions can be applied for a notified period to conduct activities related to offshore wind energy and transmission projects. The developer must acquire the requisite lease for a maximum of 35 years, marking the first step in setting up offshore wind capacity. An initial three-year lease is given for resource measurements and surveys, followed by another two-year extension.
India’s National Offshore Wind Energy Policy set the foundation for auctioning 37 Gigawatts (GW) of offshore site leases by Financial Year (FY) 2030. A Ministry of New and Renewable Energy (MNRE) Strategy Paper for offshore wind energy expansion focuses on eight promising zones to derive wind energy along the Gujarat and Tamil Nadu coasts.
Environmental and strategic safeguards feature prominently in the regulatory framework. If lease areas are identified for activities that threaten national security or cause irreparable environmental damage, the Central Government may take action. After providing due notice, it can either assume operational control of the offshore wind turbines or appoint an agency to take possession of the zone. Activities linked with coastal livelihoods, such as fishing, are permitted within offshore wind farms if they do not interfere with normal operations.
Data security provisions within the lease rules prohibit data sharing with third parties except for purposes directly related to project execution after receiving permission from the Naval Integrated Headquarters. Offshore assets in the Arabian Sea and the Indian Ocean are strategically instrumental, and companies must share real-time surveillance information with the designated government agencies, including the Navy and Coast Guard.
Offshore wind projects in India present significant leasing challenges, with each GW capacity requiring approximately 250-400 square kilometres of seabed allocation. While the initial projects would be closer to shore, the gradual expansion of these installations will require water depths of approximately 57 metres, with large rotor diameters and substantial offshore assembly weights. Though the Offshore Wind Policy stipulates that the Central/State Transmission Utility (CTU/STU) provide the onshore infrastructure for transmitting power from offshore wind farms, offshore modalities will need further assistance for monitoring sites and safe corridors from shore to the designated lease areas. The VGF scheme has sanctioned INR 7,453 crore—including an INR 600 crore grant—for port upgrades.
Streamlined interventions, such as establishing a single-window clearance system, industry-specific technical standards, and enhanced power offtake support mechanisms, are vital to monetise offshore wind in India.
Planned offshore wind zones in the Gulf of Khambhat, Gujarat, the Gulf of Mannar, and Tamil Nadu are viable for large offshore wind deployment owing to high and consistent wind speeds, shallow seabed depths ideal for fixed-bottom turbines, and existing industrial and port infrastructure. Considering the different wind energy regimes between Gujarat and Tamil Nadu, which require regional turbine customisation, substantial technology adaptation will be imperative to bridge the disparity between offshore turbine specifications (6-12 MW) and their onshore counterparts (2 MW).
Capital costs present the most significant risk to bidders without a skilled workforce and leasing experience. Lease Applicants must deposit INR 100,000 per MW for wind energy projects and INR 50,000 per MW for wind transmission projects, with annual lease fees charged at INR 100,000 per sq km. An unpredictable regulatory environment can elevate capex risks, with offshore projects anticipated to bear 80 percent higher tariffs than their onshore counterparts.
Streamlined interventions, such as establishing a single-window clearance system, industry-specific technical standards, and enhanced power offtake support mechanisms, are vital to monetise offshore wind in India.
If access is restricted to activities linked with livelihood, stakeholders must offer compensation or alternative livelihood opportunities—such as training fishers as turbine maintenance staff or offering community benefit funds for local infrastructure
The regulatory framework acknowledges that offshore wind’s Levelised Cost of Electricity (LCOE) will likely exceed that of other renewable technologies such as solar. To bridge additional procurement costs, the government offers a significant incentive of a 25-year waiver to market players on inter-state transmission system (ISTS) charges for projects commissioned before 2033. It also exempts offshore wind projects commissioned by December 2032 and supplying power to open-access consumers from additional surcharges. Developing state-centred government partnerships with tripartite bodies can potentially leverage the proposed ISTS infrastructure financial relief mechanisms to reduce LCOE. Including offshore wind outputs— even in their nascent or pilot stages—under the Renewable Purchase Obligations (RPO) monitored by State Electricity Regulatory Commissions can further encourage participation from private players and discoms.
A single-window approval system would be highly desirable for private players. The Central and State governments must establish a transparent coordination mechanism to streamline the Lease Rules, which currently mandate approvals from several bodies. The nominated nodal agencies, such as the Gujarat Power Corporation Limited (GPCL), will play a pivotal role—from synchronising tenders to being directly referenced in power purchase agreements.
Incorporating offshore wind within carbon trading under Article 6.2 of the Paris Agreement could drive additional revenue streams for developers. The Ministry of Ports, Shipping and Waterways offers shipbuilding assistance with a 20 percent capital subsidy for specialised offshore wind vessels—including heavy transport vessels, windfarm service and maintenance vessels, and cable laying vessels. The sector also stands to benefit from the third phase of the European Union (EU)-India Clean Energy and Climate Partnership, set to begin in early 2026. This phase will focus specifically on offshore wind and green hydrogen, providing a structured mechanism for technical knowledge transfer from European markets.
Globally, offshore wind leases are allocated through three primary mechanisms: non-competitive direct allocation, competitive bidding processes, and open-door developer applications. Major offshore wind markets—including the United States (US), Netherlands, United Kingdom (UK) and Germany—employ competitive leasing models subdivided into competitive auctions and competitive bilateral bidding. Denmark pioneered the open-door model, permitting developers to submit lease applications freely for designated seabed areas. However, this framework has been temporarily suspended due to a pending review of European Union regulations. The UK Contracts for Difference (CfD) model demonstrates that direct investment programmes constitute powerful incentives. Concurrently, the Indian framework could benefit from a broader grant programme encompassing diverse business sizes, development approaches, and industry roles.
Planned offshore wind zones may disrupt artisanal fishing and migratory species. While India’s lease rules mandate hearings, they lack clear compensation mechanisms. The UK’s Dogger Bank used a Fisheries Liaison Officer to ensure stakeholder dialogue, funding alternative moorings and real-time catch monitoring. Taiwan’s Formosa-I set up a fund for retraining and local job quotas, offering Corporate Social Responsibility (CSR) and a co-benefit scheme template for India.
Incorporating offshore wind within carbon trading under Article 6.2 of the Paris Agreement could drive additional revenue streams for developers. The Ministry of Ports, Shipping and Waterways offers shipbuilding assistance with a 20 percent capital subsidy for specialised offshore wind vessels—including heavy transport vessels, windfarm service and maintenance vessels, and cable laying vessels.
China leads in global offshore wind deployment, commissioning 46.1 percent of new capacity added in 2023. It holds over half the global operational offshore wind capacity, with 41 GW connected to its grid. Broadening offshore wind development across the Asia-Pacific is necessary to mitigate concentration risks and enable more equitable market distribution. Several jurisdictions—such as Bangladesh, Vietnam and South Korea—have recently introduced their first offshore wind projects. Despite having a 7,600 km coastline with substantial offshore wind potential, India has made slow progress due to technical challenges and high initial costs. India saw an overall addition of more than 25 GW of renewable energy in 2024-25, marking an increase of 35 percent from 18.57 GW in 2024–2025. As solar energy dominates new installations, the need of the hour is to diversify renewable energy avenues. Ranking third in total energy consumption and fourth in wind power capacity, India can leverage offshore wind support to its long-term strategy for round-the-clock (RTC) green power production. Accelerating deployment in this sector will be essential for India to achieve its net-zero commitments and maintain its strategic weight within the evolving global and Asia-Pacific energy landscape.
Dharmil Doshi is a Research Assistant at the Centre for New Economic Diplomacy, the Observer Research Foundation.
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Dharmil Doshi is a Research Assistant at ORF’s Centre for New Economic Diplomacy, where his research spans international commercial law (encompassing treaties and conventions, foreign ...
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