Abstract
The study investigates how financial development and geopolitical uncertainty affect India’s renewable and fossil fuel energy consumption. To address potential omitted variable bias, we account for per capita gross domestic product and trade openness. Empirical analysis, using the bounds test of cointegration, identifies a long-term relationship among the variables. The non-linear autoregressive distributed lag model results indicate that financial development lowers the consumption of both renewable and non-renewable energy. Geopolitical uncertainty reduces non-renewable energy use but significantly promotes renewable energy consumption over the long term. In terms of policy implication, a strong argument is to develop a sound financial system to support renewable energy growth and decrease reliance on imported energy. Besides, India should leverage geopolitical uncertainties to accelerate investments in renewable energy and reduce dependence on non-renewable energy sources.
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