India is expected to see a steady increase in demand for natural gas, the preferred transition fuel, with an annual growth rate of 4.5 per cent until 2050. This rise in demand will be primarily driven by the industry and transport sectors, which are forecasted to grow at rates of 3.3 per cent and 6.4 per cent, respectively.
The Global Gas Outlook report, published by the Gas Exporting Countries Forum (GECF), highlighted that the development of the national gas grid will play a crucial role in boosting natural gas accessibility in India. The report projected India’s natural gas demand to climb from 66 billion cubic meters (bcm) in 2023 to 223 bcm by 2050, representing an average annual growth rate of 4.5 per cent.
The report also emphasized the importance of the One Nation, One Gas Grid initiative in expanding the country’s pipeline network. India is investing significantly in expanding its transmission pipelines by adding over 10,000 km to the existing 24,500 km. This expansion aims to connect LNG terminals and domestic gas fields to demand centers while addressing infrastructure bottlenecks.
In terms of consumption, the industrial sector is expected to drive the largest share of natural gas demand growth in India, contributing 57 bcm and accounting for 36 per cent of the total increase from 2023 to 2050. This growth will be fueled by the expansion of industries such as fertilizers, petrochemicals, ceramics, glass, textiles, and other light manufacturing.
Additionally, the transport sector in India is projected to witness significant growth in natural gas demand, reaching 40 bcm by 2050, with an average annual growth rate of 6.4 per cent. While the power generation sector is expected to see modest growth in the near term, the report noted that there are no explicit policy measures to incentivize gas-based electricity generation.
The report also highlighted the growing demand for liquefied natural gas (LNG) in South Asia, which is expected to experience a temporary stall due to sensitivity to spot LNG prices. However, post-2026, a strong demand recovery is anticipated as LNG prices soften. India’s LNG imports are projected to rise significantly from 22 million tonnes (mt) in 2023 to 130 mt by 2050, necessitating substantial investments in LNG infrastructure, including regasification capacity.
In 2024, the Indian government reiterated its commitment to natural gas infrastructure by announcing a $67 billion investment plan over the next five to six years. This funding aims to enhance domestic gas availability, increase LNG imports, expand pipeline connectivity, and strengthen the city gas distribution network. The government is also focused on energy equity by providing 7.5 million free LPG connections to women-led households over the next three years.
Furthermore, the government is promoting the adoption of LNG in freight transport by developing over 1,000 LNG fueling stations along national highways. This initiative is expected to facilitate the transition of a third of long-haul trucking fleets from diesel to LNG over the next five to seven years. The government has allocated 0.5 million cubic meters of domestic gas per day for this effort, which is sufficient to power around 50,000 LNG trucks in the next two to three years.
