The history of gas in India’s energy system has a mixed track record, with periods of rapid expansion followed by episodes of decline. After steep demand declines in the wake of the 2022 global energy crisis, total gas consumption in India in 2023 was only slightly higher than in 2011. However, this report – grounded in comprehensive data analysis and extensive consultations with Indian stakeholders – argues that gas use in India has reached an inflection point and is on course to increase substantially between 2023 and 2030. This growth is driven by three major trends: the rapid expansion of India’s gas infrastructure, a rebound in domestic natural gas production (which is generally cheaper than imported LNG) and an expected easing of global gas market conditions. Supportive government policies have further paved the way for increased natural gas consumption through 2030. 

India's natural gas consumption is forecast to increase by nearly 60% by 2030, driven by robust growth in city gas distribution, industrial demand, and power generation. Since 2000, India's natural gas consumption more than doubled, exceeding 65 bcm/yr by 2023. Between 2023 and 2030, gas consumption is projected to grow by nearly 60%, reaching 103 bcm/yr by the end of the forecast period, bringing India roughly on par with the current gas consumption of Saudi Arabia. The city gas distribution (CGD) sector is expected to lead this growth, supported by the rapid expansion of compressed natural gas (CNG) infrastructure and the cost advantage of gas over liquid fuels for small industrial users. Heavy industrial and manufacturing sectors, such as iron and steel production, are also driving demand, collectively adding around 15 bcm/yr during this period. Gas use in oil refining is expected to increase by more than 4 bcm/yr as more refineries get connected to the grid. Growth prospects in the petrochemical and fertiliser sectors remain more limited, as no new gas-based capacity additions are foreseen within our forecast horizon. Gas demand in the power generation sector is projected to reach nearly 15 bcm/yr by 2030, driven by a recovery in large gas-fired power plants and the rapid expansion of gas use in captive power plants.

Targeted strategies and policy interventions could boost gas consumption beyond the forecasted trajectory to around 120 bcm/yr by 2030, close to the current gas consumption of the entire continent of South America. Incremental growth in this accelerated demand trajectory, which requires additional policy support in each category, could come from higher utilisation of India’s stranded gas-fired power plants, faster adoption of LNG in heavy-duty transport, and more rapid expansion of India’s CGD infrastructure, combined with the replacement of LPG with natural gas in the commercial segment. In total, this accelerated uptake of natural gas across the residential, commercial, transport and electricity sectors could add another 15 bcm/yr of gas demand by 2030.

India's domestic gas production, which met 50% of demand in 2023, is expected to grow only moderately through 2030. After nearly a decade of decline and stagnation, India's domestic gas production has seen a resurgence. In 2023, total net gas production reached 35 bcm, meeting about half of the country's gas demand. This growth is primarily driven by the deepwater fields in the Krishna-Godavari basin, which now account for nearly 25% of India's total production. Between 2024 and 2030, only moderate growth is expected, supported by increasing onshore production from coal bed methane (CBM) and discovered small fields (DSF). Offshore production will also rise with additional supplies from ONGC’s deepwater KG-D5 project. However, overall growth will be tempered by plateauing output from the KG-D6 fields and declining production from legacy assets like ONGC’s Mumbai offshore fields, leaving production in 2030 (at just under 38 bcm) only around 8% higher than 2023 levels.

India's compressed biogas (CBG) production potential remains largely untapped, with annual output expected to reach 0.8 bcm by 2030. India's CBG potential is estimated at approximately 87 bcm/yr, while the installed capacity currently represents less than 1% of this potential. The government has introduced several policy initiatives to support CBG production. As of September 2024, approximately 90 CBG plants were operational, with an additional 508 plants under various stages of development. By 2030, CBG production could reach 0.8 bcm/yr. However, challenges such as land availability, limited offtake, seasonal biomass supply and inadequate logistics continue to hinder the consistent availability and commercial viability of CBG production. The government has provided financial support for pipeline connectivity for CBG plants, biomass aggregation machinery, and byproducts offtake to address these challenges and build a robust CBG ecosystem by 2030.

India's LNG imports are set to more than double between 2023 and 2030, driven by steady demand growth and a much slower rise in domestic production. Between 2013 and 2023, India's LNG imports increased by 70%, and reached 36 bcm in 2024, matching the previous record set in 2020 and cementing the country’s position as the fourth-largest LNG importer globally. Looking ahead, India's LNG demand is projected to grow steadily, reaching 64 bcm/yr by 2030. This represents an annual average growth rate of 11% for the 2023-2030 period, twice the average rate observed in the previous ten years. As domestic natural gas production is projected to see only marginal growth until 2030, LNG imports are expected to meet an increasing share of India’s future gas demand. The rapid rise in LNG requirements necessitates additional LNG import capacity in the second half of the decade. The gap between contracted LNG supply and projected LNG requirements is set to widen significantly after 2028, leaving India more exposed to the volatility of the spot LNG market unless additional LNG contracts are secured in the coming years.