New Delhi: India, already the world’s third-largest oil importer and consumer, is set to become the epicentre of global oil demand growth over the next decade, according to a statement from the International Energy Agency (IEA) on Wednesday.
Among emerging markets and developing economies, India stands out, with energy demand expected to rise at an average annual rate of 3 per cent through 2035. The Paris-based IEA’s latest Global Energy Outlook reveals that India will register the largest absolute increase in global oil consumption through 2035, a trend underpinned by rapid economic growth, accelerating industrialisation, and a surge in vehicle ownership.
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India’s expanding appetite for energy is projected to outstrip that of China and Southeast Asia combined, highlighting the country’s growing influence in shaping global oil markets. “Oil remains the dominant fuel to 2050 in the CPS (current policies scenario). China accounted for more than 75 per cent of oil demand growth over the past ten years, but this picture is changing, and India becomes the new epicentre of growth in oil demand,” the IEA noted.
“India leads global oil demand growth over the next ten years, with almost half of the additional barrels produced globally to 2035 heading in its direction,” it added.
India’s oil use is forecast to rise from 5.5 million barrels per day (mbpd) in 2024 to 8 mbpd in 2035. The agency attributes this increase to a rapid uptick in car ownership, higher demand for plastics, chemicals and aviation, and increased use of liquefied petroleum gas (LPG) for cooking. “Oil demand in India increases by 2 mbpd to 2035 - the largest increase in any country - and continues to rise through to 2050. The next largest increases to 2035 are in Africa (1.2 mbpd), and Southeast Asia (1 mbpd),” the IEA stated.
India’s dependence on imported oil is set to intensify, with import reliance projected to climb from 87 per cent in 2024 to 92 per cent in 2035, despite government initiatives to boost local production. However, India is not only self-sufficient in refining capacity but also maintains an exportable surplus. Global refining capacity is expected to see a net increase of around 4 mbpd between 2024 and 2035, with Asia—led by India—accounting for the majority of the growth. “Since 2022, India has emerged as a global swing supplier, refining volumes of Russian crude oil exports that previously flowed to Europe. India’s refining capacity grows from 6 mbpd in 2024 by 1.5 mbpd to 2035 which solidifies its role as a key exporter of transport fuel,” said the IEA.
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Natural gas demand in India is expected to nearly double by 2035, reaching 140 billion cubic meters (bcm), led by growth in the city-gas distribution sector. Most of this demand will be met through rising imports of liquefied natural gas (LNG), with LNG imports projected to climb to 50 bcm in 2035 from 35 bcm today.
India’s electricity demand is also on track to climb sharply, expected to reach about 5,000 TWh by 2050 on sustained growth of more than 4 per cent annually. Meanwhile, LNG imports are set to nearly triple between 2024 and 2035.
The IEA observed that coal production will decline globally except in India, where output is projected to rise by about 50 million tonnes of coal equivalent (Mtce) by 2035, reflecting a strategy to reduce coal imports and strengthen energy security. India’s coal production reached almost 600 Mtce in 2024—an increase of nearly 100 Mtce since 2022. Domestic production will not fully meet the rise in demand, but it will help to contain import growth. In 2024, Coal India Ltd was granted clearance to expand the Gevra mine to 70 million tonnes per year, potentially making it Asia’s largest coal mine. The company also announced plans for 36 new mines in the next five years.
Overall, India is projected as the largest driver of global energy demand growth—across oil, gas, coal, electricity, and renewables—through 2035. The IEA expects India’s energy demand to rise by over 15 exajoules by 2035, nearly equalling the combined increase of China and Southeast Asia. Notably, India’s GDP is forecast to grow over 6 per cent a year on average, with industry and transport fuelling most of the increase in fuel consumption.
India has pledged to reach net zero emissions by 2070, is targeting 100 GW of nuclear capacity by 2047, and plans to launch a carbon market in 2026. Ethanol blending in petrol has already hit 20 per cent, easing oil import burdens, while renewables—especially solar and wind—are the fastest-growing energy sources, projected to comprise nearly 20 per cent of the energy mix by 2050.
Industrial and transport sectors are expected to drive most of the demand increase, with CO2 emissions predicted to peak around 2040 at close to 3.4 gigatonnes per year. The country achieved its 50 per cent non-fossil power capacity target five years ahead of schedule in 2025. By 2030, renewables are expected to reach a 60 per cent share of installed capacity, climbing to 70 per cent by 2035, and accounting for over 95 per cent of new capacity additions. Solar PV investment over the past decade has reached $113 billion, outstripping funds for fossil fuel power.
