India is set to overtake China as the biggest engine of oil demand growth, reshaping global energy dynamics for the next decade, the International Energy Agency (IEA) said in its Global Energy Outlook released on Wednesday.
The world’s third-largest oil importer and consumer will drive nearly half of the additional global oil consumption through 2035, powered by rapid economic growth, industrial expansion, and a surge in vehicle ownership.
“Oil remains the dominant fuel to 2050 in the CPS (current policies scenario). China accounted for more than 75 per cent of oil demand growth over the past ten years, but this picture is changing, and India becomes the new epicentre of growth in oil demand,” the IEA said.
Energy demand in India is rising faster than in any other major emerging economy, expanding by 3 per cent every year until 2035.
“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,” the agency added.
India’s oil consumption will jump from 5.5 million barrels per day (mbpd) in 2024 to 8 mbpd by 2035, the steepest rise worldwide.
The surge is driven by an explosion in car ownership, greater demand for plastics and aviation fuel, and higher LPG use for cooking.
“Oil demand in India increases by 2 mbpd to 2035 — the largest increase in any country — and continues to rise through to 2050. The next largest increases to 2035 are in Africa (1.2 mbpd), and Southeast Asia (1 mbpd),” the IEA said.
But this growth comes at a cost, a heavier import bill. India’s crude oil import dependence will climb from 87 per cent in 2024 to 92 per cent by 2035, despite ongoing efforts to boost domestic production.
At the same time, India is consolidating its position as a refining powerhouse.
“Since 2022, India has emerged as a global swing supplier, refining volumes of Russian crude oil exports that previously flowed to Europe. India’s refining capacity grows from 6 mbpd in 2024 by 1.5 mbpd to 2035 which solidifies its role as a key exporter of transport fuel,” the IEA said.
Asia will witness a net refining capacity increase of 3 mbpd between 2024 and 2035, and India will lead that growth.
Natural gas use is set to soar as well. India’s demand for natural gas will nearly double to 140 billion cubic metres (bcm) by 2035, driven by expansion in city-gas networks and rising industrial needs.
“In 2035, India imports 50 bcm of LNG, up from 35 bcm today,” the report said, adding that LNG imports will almost triple between 2024 and 2035.
Electricity consumption will also rise sharply, reaching about 5,000 terawatt hours (TWh) by 2050, sustained by over 4 per cent annual growth from 2024.
While coal use declines across major producing nations, India is the only country where output continues to rise. “Coal production declines in all major producing countries except India to 2035,” the IEA noted.
Domestic coal output is expected to rise by 50 million tonnes of coal equivalent (Mtce) by 2035 as the government pushes to cut imports and fortify energy security.
Coal India Ltd has already received environmental clearance to expand its Gevra mine to 70 million tonnes per year, making it Asia’s largest. The company plans to open 36 new mines within five years.
The IEA said India is now the single biggest driver of global energy demand, across oil, gas, coal, electricity, and renewables.
Its energy consumption is expected to rise by over 15 exajoules (EJ) by 2035, almost matching the combined growth of China and Southeast Asia.
As the economy expands at over 6 per cent annually, India’s transport and industrial sectors are set to fuel most of the surge. But the country is also laying the groundwork for cleaner energy.
It has pledged net zero emissions by 2070, is targeting 100 GW of nuclear capacity by 2047, and plans to launch a carbon market in 2026. Ethanol blending in petrol has already hit 20 per cent, reducing oil import pressure.
Solar and wind power will play a crucial role, expected to make up nearly 20 per cent of India’s energy mix by 2050. Carbon dioxide emissions are projected to peak around 2040 at about 3.4 gigatonnes annually.
India reached its 50 per cent non-fossil power capacity target five years ahead of schedule in 2025, a major milestone. Renewables will make up 60 per cent of installed power capacity by 2030 and 70 per cent by 2035, accounting for over 95 per cent of new additions.
Over the past decade, investments in solar photovoltaic (PV) projects have touched USD 113 billion, outpacing fossil fuel investments.