Assam Govt's Abrupt Withdrawal of Clean Energy Policy Raises Investor Concerns

Assam has withdrawn their flagship clean energy policy without giving any clear reason. The state had announced its clean energy policy in February, reported Reuters.

Earlier this year, Assam had announced a big clean energy policy in February to attract investments in renewable energy adoption by offering financial incentives and waivers. An internal memo dated July 18, reviewed by Reuters, said the integrated clean energy policy was withdrawn following a cabinet decision, without specifying the reason for its reversal. The Assam government has not issued an official withdrawal of the clean energy policy, industry sources said.

The February policy offered subsidies on power transmission and eased bank guarantee requirements to support clean energy projects in the state. However, in July the state government quietly decided to withdraw this policy without giving any clear reason. This sudden move has created uncertainty for companies that were planning to invest millions of dollars in projects like green hydrogen.

Major energy companies such as NTPC Green, Larsen & Toubro, Sembcorp and Ocior had shown interest in working in Assam. Now, because of this unexpected policy reversal, investors are worried—it shows that inconsistent state policies can disrupt clean energy plans and make businesses hesitant to invest.

Assam had put its flagship green hydrogen policy on hold in June. Till July, the state had sought to attract major investments in a region that has lagged behind much of the country in renewable energy adoption, offering financial incentives and waivers to bring in electricity. The state’s decision to pause the green hydrogen policy had surprised some of the companies, prompting them to recalibrate potential returns and investment plans worth millions of dollars, reported Reuters.

Policy Reversal Raises Concerns

The policy was introduced in February 2025 with an aim to position Assam as a leading hub for clean energy. With the present abrupt withdrawal of its clean energy policy, Assam has raised concerns among investors and industry stakeholders.

Industry experts suggest that such policy inconsistencies can deter potential investors and disrupt the state’s efforts to transition to sustainable energy sources, reported Reuters.

According to the World Economic Forum, stronger clean energy policies can decrease the cost of capital for renewable energy production and directly influence investment choices between green and brown alternatives.