India will become the largest source of energy demand growth in the world by 2035, along with the largest contributor to growth in oil demand in this period and the second largest for electricity generation and coal demand growth, says the IEA World Energy Outlook 2025, released Wednesday.
The International Energy Agency (IEA) said that energy demand in India is being propelled by increasing economic activity. Oil remains the dominant fuel until 2050. China accounted for more than 75% of oil demand growth over the past ten years, but this picture is changing, and India is becoming the new epicentre of growth in oil demand.
“Between 2010 and 2024, its GDP growth rate was second only to that of China among major countries and regions. In the period to 2035, GDP grows on average by 6.1% each year in India, which is more than any other major country or region, and its GDP per capita is 75% higher in 2035 than today,” said the report.
India is currently well below the global average on a range of key energy and economy-wide indicators, but it has been moving towards them, and it continues to do so over the next decade.
India adds the equivalent of one Bangalore every year to its urban population by 2035, and its built floor space expands by 40%. It also adds nearly 12,000 cars to its roads every day, and well over 250 million air conditioners to its homes over the next decade.
“India has the fastest rate of growth of any region, with an increase in demand of 80% to 2035, driven by the rising use of air conditioners and appliances: despite this, it still has one of the lowest rates of electricity demand per capita among major economies in 2035,” the report highlights.
In India, coal-fired generation rises in the near term before reaching a plateau by 2035 as renewables and nuclear advance. India is one of the few countries to continue to significantly ramp up coal production. Coal production declines in all major producing countries except India to 2035
Distribution grids have experienced similar growth patterns over the past decade. Driven by rising electricity demand, they have increased rapidly in emerging markets and developing economies. In India, grids have been extended by more than 50%, by 4.6 million km.
“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. Its oil use increases from 5.5 mb/d in 2024 to 8 mb/d in 2035 because of rapid growth in car ownership, increasing demand for plastics, chemicals and aviation, and a rise in the use of liquefied petroleum gas (LPG) for cooking,” the report added.
