Electrifying low-temperature industrial process heat represents an immediate, high-impact lever for industrial decarbonisation and MSME competitiveness across India and Germany. Grounded in extensive stakeholder engagement, the study explores how replacing fossil-fueled boilers with electric boilers and industrial heat pumps enables micro, small, and medium enterprises to access cheaper renewable energy, while offering German clean-tech manufacturers a resilient supply-chain base in India.
The analysis identifies critical bottlenecks currently weakening the business case for adoption:
- Policy & Knowledge Deficits: The absence of a dedicated Indian policy framework, compounded by scarce operational data and low MSME awareness.
- Financial Constraints: High upfront equipment prices and elevated electricity tariffs, paired with limited access to affordable capital.
- Infrastructure & Market Barriers: Unreliable grid systems, inadequate energy storage, and market-entry obstacles for technology providers.
To overcome these hurdles, the paper proposes a four-part roadmap for the Indo-German partnership:
- Accelerate MSME Adoption: Deploy targeted financial support while resolving technical implementation challenges.
- Upgrade Enabling Infrastructure: Fortify electricity grids and energy storage to integrate renewables effectively.
- Co-Develop Supply Chains: Build local Indian manufacturing capacity for heat pump components of shared strategic interest.
- Foster Joint Innovation: Align collaborative R&D to lower technology costs and expand diverse industrial use cases.
About this Publication
Suggested citation: NewClimate Institute (2026). Indo-German cooperation on electrification of industrial heat: a vision for 2030 and beyond.
Published: August 2026
Authors: Chetna Hareesh Kumar, Imogen Outlaw, Sarah Jackson
Content partners & reviewers: Vrinda Sarda, Jaideep Saraswat, Srinivas Ethiraj (Vasudha Foundation)
Pages: 19