India has set ambitious targets to increase the share of renewable energy (RE) in its energy mix. The Government of India (GoI) plans to install 175 GW of renewable energy projects by 2022 and 450 GW by 2030. To put that in perspective, total installed energy capacity in India at the end of 2020 was 379 GW, or which 93 GW (25%) was RE. To date, the government’s primary focus of RE expansion has been on large grid-scale solar. However, achieving India’s ambitious RE targets will also require an increase in distributed renewable energy (DRE) projects. If a more favorable regulatory and policy environment is created, such DRE projects, though smaller in size, have greater scalability potential. They also avoid the long lead times and execution bottlenecks associated with public-sector offtake procurement projects. In this CPI report, outline the benefits and market potential of India’s DRE sector, examine the current policy and institutional landscape, and provide tailored recommendations for the different stakeholders.