According to a report by SBI Caps, India's power transmission sector is set for a recovery in FY27 after experiencing five years of subdued growth. The report highlights that transmission line and substation additions fell short of targets between FY22 and FY26 due to various challenges, including right-of-way delays and equipment shortages from limited imports from China. However, FY26 showed early signs of improvement, with transmission line additions increasing by 37% year-on-year. SBI Caps estimates a substantial ₹7.6 trillion (approximately $91 billion USD) investment opportunity in the sector over the next six years.

Regulatory shifts are expected to influence project economics, particularly with the gradual withdrawal of Inter-State Transmission System (ISTS) fee concessions for renewable projects, which may encourage more local renewable energy development. Additionally, energy storage is emerging as a viable solution to transmission congestion, improving asset utilization and potentially lowering tariffs for users.

On the financing front, asset monetisation is crucial for addressing the sector's capital needs. The National Monetisation Pipeline 2.0 has set a target of ₹2.3 trillion (approximately $28 billion USD) for transmission between FY26 and FY30. Furthermore, monetising state transmission assets, which represent a ₹2.9 trillion (approximately $35 billion USD) opportunity, could significantly bolster state finances and support sector growth.