India Ratings and Research (Ind-Ra) has upheld a stable outlook for smart metering projects in FY26, primarily supported by the go-live status of most rated projects, the implementation of automated payment systems through the Direct Debit Facility (DDF), government backing, and strong domestic manufacturing capabilities. According to Ind-Ra, debtor days remain within comfortable levels for rated entities. The pace of meter installations in FY25 has been slower than expected, with a forecasted improvement within the next 12 to 18 months. The delay in progress was attributed to developers prioritizing IT infrastructure, the impact of general elections, and consumer reluctance toward installations. However, discoms within Ind-Ra’s rated portfolio have successfully implemented the DDF mechanism, ensuring timely payments for Advanced Metering Infrastructure Service Provider (AMISP) charges through tripartite agreements. As of January 8, 2025, the RDSS schemes have awarded contracts for 110.6 million meters, with an implementation rate of just 6%. On the other hand, non-RDSS schemes have seen better success, with 2.97 million meters awarded and an implementation rate of 81%. Despite these challenges, the overall technical and commercial losses, which stood at 15.37% in FY23, are expected to decrease with the adoption of smart meters. The DDF mechanism ensures that payments for AMISP services are safeguarded by a payment gateway, with at least five times the estimated monthly charges available for service providers. Discoms treat these charges as operational expenses, prioritizing them over other costs. However, the regulatory acceptance of these charges has been inconsistent across states. India’s manufacturing capacity for smart meters is currently around 70 million units annually, with manufacturers expanding capacity by setting up new assembly lines. While progress on installations and regulatory approvals remain crucial, Ind-Ra expects these factors to play a pivotal role in the sector’s performance over the next fiscal year.