India is planning a major overhaul of its power sector by opening the retail electricity market to private companies across the country, according to a draft bill from the Union Power Ministry.

Currently, state-run distribution companies (discoms) dominate electricity supply, often facing financial instability and mounting debts. The reform would allow firms like Adani Enterprises, Tata Power, Torrent Power, and CESC, previously limited to select privatised zones such as the National Capital Region, Odisha, Maharashtra, and Gujarat— to expand operations nationwide.

As of June 2025, State utilities owed around USD 6.78 billion to power generators, straining liquidity and restricting credit flow within the sector. The new proposal includes permitting multiple private distributors to operate in the same region, a departure from current rules under the Electricity Act. This plan aims to introduce competition, enhance service quality, modernise power infrastructure, and reduce the financial burden on government-run utilities.