Manufacturers' energy costs at 20-year low

Better for business

- SACHIN P MAMPATTA

High energy costs, long a drag on India's manufacturing competitiveness, are finally easing. Power and fuel expenses accounted for 1.98 per cent of net sales in 2024-25, the lowest level in data compiled by the Centre for Monitoring Indian Economy (CMIE) over the past two decades. The April-June 2025 quarter saw an even lower figure of 1.92 per cent.

Advances in technology, conservation measures, and firms investing in their own power generation units are among the reasons for the decline.

"Solar and wind cost ₹3-4 per unit," said Mahesh Bendre, fund manager at LIC Mutual Fund, noting that many firms are shifting to cheaper renewable electricity, either through third-party purchases or captive plants.