India has a vast population and very limited natural resources especially for meeting its energy requirements. If the country needs to maintain its momentum of rapid growth it is possible only with a clear strategy for best possible use of energy options available. Energy is vital for development and this means that if India is to move to a higher growth trajectory than is now feasible, it must ensure the reliable availability of energy. The present energy scenario in India is not satisfactory and there is a large scope of improvement. The present paper reviews the importance and prospects of renewable energy of India and extrapolates the future developments keeping in view the demand, consumption, production and supply of power. Most of the power generation in India is carried out by conventional energy sources, coal and mineral oil-based power plants which contribute heavily to environmental degradation. Setting up new power plants requires inevitable import of highly volatile fossil fuels. The paper focuses on the solution of the energy crisis on judicious utilization of abundant renewable energy resources, such as biomass, solar, wind, geothermal and ocean energy. Due to the inequality in energy distribution, renewable energy has the possibility of becoming the foundation for the country’s future energy requirements.