Interview with Abhinav Nanda: “Localisation has moved from policy aspiration to strategic necessity”

Abhinav Nanda is Assistant Vice President (AVP) – Contracts and Commercial at O2 Power Private Limited, where he oversees large-scale procurement and contract portfolios in the renewable sector. With expertise in strategic sourcing, contract structuring, and risk management, he is a strong advocate of localisation and resilient contracting as drivers of India’s energy transition.

In this interview with Power Peak Digest, he shares his perspective on the Goods and Services Tax (GST) restructuring, supply chain localisation, and the role of procurement in meeting India’s 2030 renewable energy goals. Excerpts…

How is the recent GST restructuring expected to impact procurement costs and contract structuring in renewable energy projects?

The GST overhaul has simplified India’s indirect tax regime by collapsing multiple slabs into just 5% and 18%. For renewable developers and EPC contractors, this brings predictability in procurement costs and reduces classification disputes. While inputs such as cement, cables, and transformers remain at 18%, many items that previously attracted 28% — like paints, tiles, and appliances — are now at 18%, lowering allied construction costs. In my own experience of structuring high-value Contracts, lower tax incidence improves lifecycle costing and gives us more room to negotiate favourable terms with suppliers.

The real structural impact, however, is on contracting. With fewer tax slabs, contracts can now carry clearer GST pass-through provisions, reducing contingencies and making risk-sharing between developers and contractors more transparent. Financing institutions will also welcome this clarity, as it strengthens project bankability.”

Do you see GST changes influencing project timelines, especially for wind and solar installations where supply chains are global?

GST rationalisation helps projects once materials and services are in India, by reducing working capital pressure and improving liquidity for contractors. Lower tax incidence on EPC services and insurance, for instance, ensures smoother fund flows. But when it comes to project timelines, especially for wind and solar installations dependent on global supply chains, the bigger challenges remain outside India — shipping delays, forex swings, and geopolitical disruptions.

In other words, GST is an enabler of smoother domestic execution, but the ‘critical path’ for project timelines is still determined globally. From managing procurement cycles that span both domestic and international vendors, I’ve seen how tax clarity can smoothen local execution, though it cannot insulate projects from overseas disruptions.

How important has localisation of supply chains become in procurement strategy, especially with currency volatility and trade policies?

Localisation has moved from policy aspiration to strategic necessity. Volatile currencies, shifting trade rules, and pandemic-era bottlenecks have highlighted the risks of import dependence. The GST relief on industrial and farm equipment complements broader incentives for domestic manufacturing, signalling a clear policy push for resilient local supply chains.

For renewable energy, the procurement challenge is about balance: leveraging proven global OEM technology while developing strong domestic vendor ecosystems. This dual sourcing not only mitigates risk but also shortens lead times and improves cost predictability.

Contract variations and disputes are common in infrastructure. How is the renewable industry dealing with risk allocation and claims in current market conditions?

The renewable industry has matured to a stage where contracts are well-equipped to address tax-related changes, drawing on lessons from earlier transitions such as the GST rollout. Most EPC agreements now incorporate pass-through clauses, change-in-law provisions, indexed pricing for commodity and forex risks, along with clearly defined trigger events for claims. In the current environment, effective risk allocation and claims management depend on well-structured contracts that identify risks, allocate responsibilities, and embed robust mechanisms for resolving disputes related to anticipated potential claims events during the drafting and negotiation stage.

That said, the recent GST changes may also require amendments to already executed contracts. Within the legal framework, developers and contractors may seek to restructure timelines to maximise the benefit of revised tax incidence. Equally important is how claims are handled: early warning notices, proactive negotiation, and dispute boards are now preferred over litigation. The sector is moving towards contracts that anticipate volatility rather than react to it.

Where do you see procurement challenges intensifying over the next five years- raw materials, financing, logistics, or policy?

Looking ahead, procurement challenges will shift away from tax issues to deeper structural concerns. Raw materials like lithium, copper, and rare earths will remain globally constrained. Logistics volatility and financing hurdles for long-gestation projects will add further pressure.

In terms of sectors, the competitive landscape is shifting as battery storage costs fall and solar-plus-storage gains traction. Yet, wind continues to play a critical role in India’s renewable mix, particularly in providing diversity and stability to the grid. Wind turbine OEMs are already pushing the envelope — with larger rotor designs, hybrid wind-solar configurations, and advanced digital monitoring — which have significantly improved efficiency and reliability. With continued innovation, wind can remain a strong complement to solar, ensuring India’s energy transition is both balanced and resilient.

What role do you see procurement and contract management playing in helping India achieve its 2030 renewable energy targets?

Procurement and contract management will be central to India’s 2030 renewable energy ambitions. With the Goods and Services Tax (GST) easing project economics, procurement must evolve from a transactional exercise into a strategic function. This means securing critical materials through long-term contracts and global partnerships, while also building stronger domestic vendor capacity in modules, batteries, and balance-of-plant. At the same time, embedding environmental, social, and governance (ESG) standards and green supply chain practices will align procurement with broader climate goals.

Equally important is the ability to manage financing and insurance risks in ways that strengthen bankability at scale. Digital adoption will also play a defining role, whether through artificial intelligence-driven demand forecasts, e-tendering, or blockchain-enabled contract transparency. Ultimately, procurement will determine not only how cost-efficient renewable projects can be, but also how quickly and reliably they scale. GST has eased costs, but it is resilient procurement that will decide how fast and how credibly India achieves its 2030 energy goals.