India's Energy Revolution: World's New Demand Engine & Green Powerhouse!

Energy

|

Updated on 12 Nov 2025, 02:56 pm

The International Energy Agency (IEA) in its World Energy Outlook 2025 highlights India's pivotal role in reshaping global energy markets. India is projected to be the leading contributor to the growth in oil demand and the second-largest consumer of coal, mainly for power generation, by 2035. This surge in consumption is attributed to rapid economic expansion, with GDP expected to grow by an average of 6.1% annually until 2035, leading to a 75% increase in GDP per capita.

As India's consumption rises from 5.5 million barrels per day to 8 million by 2035, driven by factors like increased car ownership, demand for plastics, chemicals, and aviation, nearly half of the global increase in oil supply will be absorbed by the country. However, India is also making significant strides in clean energy. The government's ambitious target of 500 gigawatts of non-fossil fuel capacity by 2030 is driving a massive transition. By 2035, more than half of India's electricity production is expected to come from non-fossil fuel sources, accounting for 95% of new capacity additions. Investment in non-fossil fuel power generation has surged, shifting from a 1:1 ratio with fossil fuels in 2015 to 1:4 by 2025 in favour of clean energy.

The report illustrates India's growing energy needs by noting it adds an urban population equivalent to Bengaluru annually and expands its built space by 40%. Daily additions of nearly 12,000 cars to roads and an estimated 250 million air conditioners over the next decade underscore this demand. Despite this growth, the IEA also warns about vulnerabilities in supply chains for critical minerals essential for renewable technologies and electric vehicles, noting that a single country dominates the refining of most strategic energy minerals.

Impact: This news significantly impacts the Indian stock market, particularly energy, power, infrastructure, and renewable energy sectors, as it signals sustained demand and a strong policy push towards green energy. Investors can anticipate opportunities in companies involved in oil exploration, refining, coal mining, power generation (both thermal and renewable), and manufacturing of related equipment. The geopolitical risk concerning critical minerals also warrants attention for companies involved in supply chains and material sourcing. Rating: 8/10

Terms Explained: * GDP (Gross Domestic Product): The total value of all goods and services produced within a country in a specific period. It's a key indicator of a country's economic health and size. * GDP per capita: GDP divided by the country's total population. It represents the average economic output per person. * Gigawatts (GW): A unit of power equal to one billion watts. It's commonly used to measure the capacity of electricity generation plants. * Non-fossil fuel sources: Energy sources that do not originate from burning fossil fuels like coal, oil, or natural gas. Examples include solar, wind, hydro, and nuclear power.