Despite global cleantech investment falling 41% in Q1 2009, global spend totaled sizable US$1 billion. India accounted for just 1% of this figure (North America 68%, Europe/Israel 28% and China 2%).

India's energy conundrum

Pressure comes from having to balance immediate need and economic development with long-term sustainability. Subsidized - vote winning - fuel has crippled state owned oil companies and Government relies on importing 75% of its crude oil at huge cost.

As India's consumption grows the need to become less reliant on fossil fuels and "old" technology becomes increasingly important. Yet evidence suggests that there is little will to tackle this thorny, political issue.

Cleantech not gaining traction

While global cleantech investment grew 38% in 2008, India's figures fell 20% to just US$ 277 million. Mohanjit Jolly, executive director, Draper Fisher Jurvetson India explains, "The drop in clean technology venture investment in India is not surprising". Jolly explains that most investors are still learning and optimistically predicts, "Going forward, you will actually start to see positive results of this learning phase."

Q1 2009, India deals

First quarter 2009 saw India investment of US$ 54 million (value of one deal was undisclosed). Jain Irrigation, country's largest provider of micro-irrigation systems; Sri Biotech, an agri-biotech company and Polygenta all received funding. More recently, private equity firm Olympus Capital, established their first clean environment fund to focus on India and China, last year, it invested US$ 35 million in renewable energy company Orient Green Power.

National and local government

UK government announced a £1 million grant to launch a joint UK-India project to develop pest-resistant crops by June 2013. A number of Indian state governments have announced new cleantech policies, Orissa is preparing a master plan to produce biodiesel using jatropha plantations, securing rural jobs in the process.

Kick starting cleantech

Jaswinder Kaur, Managing Director of Cleantech Group, believes slow development can be attributed to lack of distribution networks, financing strategies and incentives for consumer adoption. He suggests involvement of research institutes to help create cleantech companies, tax incentives and an India specific focus to get the sector moving.

Nicholas Parker of Cleantech Group gave a future-focused presentation in Mumbai last October, in it he suggested that India positions itself as the world's cleantech lab, emulating the success of the country's IT sector. Given India's R&D skills the suggestion makes sense and the wealth and job creation opportunities are massive.

To make it a reality Government needs to show a willingness to review its relationship with and reliance on fossil fuels.