India’s natural gas market at inflection point, demand set to surge 60% by 2030: IEA

India's natural gas demand is expected to surge nearly 60% by 2030, driving a more than doubling of its liquefied natural gas (LNG) imports to around 65 billion cubic meters (bcm) annually, the International Energy Agency (IEA) said in a report released on Wednesday.

The "India Gas Market Report: Outlook to 2030" projects gas consumption will reach 103 bcm per year by the end of the decade, putting India on par with some of the world's largest gas consumers.

The growth comes after more than a decade of sluggish demand and periodic declines, with consumption rising over 10% annually in both 2023 and 2024. The report argues that gas use in India has reached an inflection point and is on course to increase substantially between 2023 and 2030.

"India's gas market is entering a new phase of growth, supported by significant infrastructure development and clear policy direction," said Keisuke Sadamori, IEA Director of Energy Markets and Security. "However, it will require careful planning and market coordination to ensure supply security in a price-sensitive market."

Since 2019, India has nearly quadrupled its compressed natural gas (CNG) stations, doubled residential gas connections, and expanded its pipeline network by 40%.

By 2030, the number of CNG stations and residential connections is set to nearly double again, while the gas transmission grid will expand by an additional 50%. The city gas distribution sector is projected to lead consumption growth, buoyed by competitive pricing against liquid fuels and expanded CNG infrastructure.

India's domestic gas production, which met 50% of demand in 2023, is expected to grow modestly to just under 38 bcm by 2030, about 8% above 2023 levels. This limited domestic growth means LNG imports will fill the gap, more than doubling from 36 bcm in 2024.

The report also outlines an accelerated scenario where targeted policy measures could push total gas demand to around 120 bcm by 2030, comparable to current consumption levels in South America. This would require policies to boost gas-fired power plant utilisation, accelerate LNG adoption in heavy-duty transport, and further expand city gas networks.

However, the IEA warned that as legacy LNG contracts expire, India faces a growing gap between contracted supply and projected demand after 2028. Without new long-term agreements, the country could face increased exposure to volatile spot markets.

The report's findings will be presented at India Energy Week 2025 on February 12 in New Delhi.

Addressing IEW 2025 earlier this week via video message, Prime Minister Narendra Modi said the supply of natural gas is increasing due to several discoveries and the expanding pipeline infrastructure in India.

"As a result, the use of natural gas is also set to grow in the coming years, creating numerous investment opportunities for you in this sector," he said.