India's natural gas demand to surge 4x by FY40, yet infrastructure constraints may hinder clean energy transition: Report
New Delhi, May 21
India's clean energy transition could face a major bottleneck as natural gas demand is expected to rise nearly four times by FY40, even as the country continues to face structural constraints in gas supply infrastructure, according to an infrastructure sector trends report by Equirus.
The report said India's natural gas demand is projected to rise from 131 million metric standard cubic metres per day (mmscmd) in FY16 to 496 mmscmd by FY40, driven by the country's transition toward cleaner sources of energy.
However, Equirus said the challenge is not just increasing demand, but the limited ability of the gas supply chain to respond quickly.
"Gas demand is set to ~4x--intensifying pressure on constrained supply and infrastructure," the report said.
The report highlighted that while several major economies use natural gas as a key transition fuel, India remains heavily dependent on coal, with gas accounting for only around 7 per cent of the country's energy mix, compared with nearly 24 per cent globally.
"India's low gas share is a structural constraint--not a transition lag," the report noted, adding that this keeps the country "far behind global energy mix shifts."
The report explained that unlike crude oil, natural gas and liquefied natural gas (LNG) require a tightly connected infrastructure chain, making the sector more vulnerable to disruptions and capacity shortages.
"Gas is critical--but structurally harder to scale than oil," the report said.
According to the report, constraints exist at every stage of the gas supply chain, including production, liquefaction, LNG shipping, regasification terminals, pipelines and last-mile connectivity to consumers.
The report further said that limited availability of specialised LNG vessels, terminal capacity restrictions and inadequate pipeline connectivity are preventing gas from becoming a free-flowing energy commodity like oil.
"Gas flow is constrained at every stage--making supply rigid, fragmented, and non-responsive to demand," the report said.
It also noted that high price sensitivity among consumers often leads to fuel switching, making demand volatile and reducing reliability in gas consumption planning.
The report comes at a time when India is aggressively expanding renewable energy capacity and increasing investments in cleaner fuels as part of its long-term energy transition strategy.
— ANI
Reader Comments
This is concerning. While the government is pushing for net-zero by 2070, we can't even scale up natural gas infrastructure fast enough. And the report says demand is volatile because of price sensitivity—people switch back to coal or biomass when gas prices rise. So the transition isn't just about supply, it's about making gas affordable and reliable for households and industries. 🏭💸
Honestly, I feel the focus should be on renewable energy, not natural gas. Yes, gas is cleaner than coal, but it's still a fossil fuel. Instead of building more LNG terminals and pipelines, why not invest that money into solar, wind, and battery storage? We have abundant sunshine—let's use it! ☀️ India should leapfrog to renewables, not get stuck in another fossil fuel trap.
I disagree with the "transition lag" comment. India is not lagging—we are starting from a different baseline. Our coal use is high because we have abundant reserves and it's cheap. You can't just switch to gas overnight without crippling industry. The report itself says gas infrastructure is "structurally harder to scale." So be realistic—we need a phased approach, not unrealistic targets.
The key takeaway for me is the "high price sensitivity" point. In our country, if gas becomes expensive, small businesses and households will just switch back to LPG cylinders or even firewood. We need to think about energy poverty—millions still lack access to clean cooking fuel. Infrastructure is important, but affordability and equity must be central to any transition plan. 🇮🇳
J James A