India will have the highest energy demand growth in the world by 2035: IEA

India will have the largest source of energy demand growth in the world by 2035, as the country's energy demand will increase by over 15 EJ( exajoule - a unit to measure large quantities of energy), says the International Energy Agency (IEA).

This demand is nearly as much as the demand growth in China and all Southeast Asian countries combined. India will be the largest contributor to growth in oil demand, the second-largest for electricity generation and coal demand growth, and the third-largest for natural gas demand growth by 2035, the IEA said in its 'World Energy Outlook 2025'.  

India's GDP grows on average by 6.1% each year, which is more than any other major country or region. The GDP per capita will be 75% higher in 2035 than it is today. Though India is currently well below the global average on a range of key energy and economy-wide indicators, it has been moving towards them and will continue to do so over the next decade, the IEA said, citing big growth in economic and industrial activity.

In addition to boosting energy supply to meet fast-growing demand, India is tackling a variety

of other energy-related challenges, said IEA. These include: ensuring universal access to modern energy; reducing fossil fuel import dependence; improving the reliability of electricity supplies; reducing air pollution; and cutting GHG emissions. A key challenge is to provide universal access to modern energy. India has made remarkable progress in improving energy access in recent decades, but nearly 20% of its population continues to rely in whole or in part on traditional biomass for cooking. The Pradhan Mantri

Ujjwala Yojana policy seeks to address this by providing subsidies for LPG use for poor households, it observed.

Efforts to meet demand

IEA says India's long-term non-fossil fuel targets are now supported by a goal to scale up nuclear power capacity to 100 GW by 2047 from 8 GW today, plans to implement a carbon market for select industries in 2026, and a biofuels mandate that has achieved an ethanol blending rate of 20% in auto fuels in 2025. With policy support, solar PV and wind are the fastest growing sources of energy to 2050, although coal and oil remain mainstays.

India met its target for 500 GW grid-connected non-fossil fuel generation capacity in 2025, five years ahead of schedule. This success was underpinned by surging investment in renewables. In 2015, every dollar invested in fossil power generation sources in India were broadly matched by a dollar invested in non-fossil sources, a 1:1 ratio. By 2025, this ratio had increased to 1:4 in favour of non-fossil sources. Solar PV alone has attracted USD 113 billion in cumulative investment in the past decade, compared with USD 112 billion for all fossil fuel power generation sources combined.

Future scenario

Energy demand growth will be the fastest in the industry and transport sectors, with the industry alone accounting for over half of the demand increase by 2050.  

The share of non-fossil sources in installed generation capacity will rise to 60% in 2030 and 70% in 2035, and will account for over 95% of capacity increases by 2035. This is a striking contrast to the 2015-2024 period, when coal and natural gas accounted for over 70% of increased generation. Nevertheless, led by industry, demand for coal will rise and moderate by 2035, and coal continues to be a mainstay in the electricity generation mix, providing valuable dispatchable generation and flexibility. Solar PV and wind power see their share of generation rise from 11% today to over 25% by 2030 and to nearly 40% by 2035. Generation from nuclear will triple by 2035. As a result, non-fossil sources are responsible for over half of electricity generation in India by 2035, the IEA said, analysing announced policies and growth and energy scenario in the country.  

The rising share of variable renewables in power generation brings with it both challenges and opportunities, it notes. One challenge will be the need for investment in storage and transmission to

facilitate the deployment of renewables. Over 230 gigawatt-hours (GWh) of battery storage will be added to the system by 2030. The transmission network will expand by 35% during the same period, with over 200,000 km of new transmission lines, including nearly 60,000 km of lines to facilitate the integration of renewables.  

India also faces challenges arising from the financial weakness of distribution companies, exemplified by delayed payments to generation companies totalling USD 7 billion in October 2025. A range of reforms have been instituted, including the establishment of a payment security mechanism, a payment security fund, and state government guarantees to increase investor confidence in renewable energy projects, said IEA.