New Delhi: On the second day of India Energy Week (IEW) 2025, the International Energy Agency (IEA) released its comprehensive India Gas Market Report on Wednesday, revealing that India’s natural gas sector has reached an inflection point. The report projects India’s natural gas consumption to increase by nearly 60 percent to reach 103 billion cubic meters (bcm) per year by 2030, positioning the country’s consumption levels comparable to present-day Saudi Arabia. Following over a decade of slow growth and periodic declines, India’s natural gas demand increased by more than 10 percent in both 2023 and 2024, indicating an inflection point, said the report.
According to the report, this substantial growth trajectory is supported by three major trends: the rapid expansion of India’s gas infrastructure, a rebound in domestic natural gas production, and an expected easing of global gas market conditions. The report states that supportive government policies have created a favorable environment for increased natural gas consumption through 2030.
The city gas distribution (CGD) sector is poised to lead this expansion, driven by the rapid growth of compressed natural gas (CNG) infrastructure and the cost advantage of gas over liquid fuels for small industrial users. Heavy industries, including iron and steel manufacturing, are projected to add around 15 bcm annually to the demand, while gas use in oil refining is expected to increase by more than 4 bcm annually as more refineries connect to the grid.
The IEA report indicates that with targeted strategies and additional policy support, India’s gas consumption could potentially reach 120 bcm annually by 2030, approaching the current consumption levels of South America. This accelerated scenario would involve higher utilisation of gas-fired power plants, faster adoption of LNG in heavy-duty transport, and more rapid expansion of CGD infrastructure.
While domestic gas production, which met 50 percent of the demand in 2023, is expected to grow moderately through 2030, LNG imports are projected to more than double during this period, reaching 64 bcm annually by 2030. This positions India to remain the fourth-largest LNG importer globally, highlighting the country’s growing significance in the global gas market.
“India’s gas market is entering a new phase of growth, supported by significant infrastructure development and clear policy direction,” said IEA Director of Energy Markets and Security Keisuke Sadamori. “The prospect of higher gas demand in India coincides with an expected wave of new global LNG supply. However, it will require careful planning and market coordination to ensure supply security and to help gas to compete in a price-sensitive market,” Sadamori added.
Looking ahead, the report emphasised the need for strategic planning in LNG procurement and import infrastructure. As legacy contracts expire, India faces a widening gap between contracted supply and projected demand after 2028, potentially increasing exposure to spot market volatility unless new long-term contracts are secured in the coming years.
