India’s economic transformation is creating a structural increase in energy demand. Rapid industrialisation, urbanisation, rising household incomes, expanding manufacturing capacity, transport demand and the growth of digital infrastructure are all increasing the need for reliable and affordable energy. The International Energy Agency (IEA) expects India’s electricity demand to grow at an average rate of around 6.4% annually through 2030, adding more than 570 TWh of annual electricity consumption over the next five years. Industry, households and services are expected to remain major contributors to this growth.
This changing energy landscape makes the oil and gas sector strategically important even as India accelerates renewable energy deployment. In June 2025, non-fossil sources accounted for 50% of India’s cumulative installed electricity capacity, five years ahead of the country’s 2030 target under its Nationally Determined Contribution. Yet electricity capacity and total primary energy consumption are different measures. Coal, oil and natural gas continue to provide the majority of India’s overall energy supply.
Within this broader system, natural gas has an important role to play. It can support industrial competitiveness, urban energy access, transport diversification and the integration of variable renewable energy while India simultaneously develops solar, wind, nuclear, hydrogen, bioenergy and energy-storage systems.
Natural Gas and India’s Energy-Mix Ambition
The Government of India has set a policy objective of increasing natural gas’s share in the country’s primary energy mix from approximately 6.7% to 15% by 2030. The ambition is significant because the global average share of natural gas in primary energy has historically been considerably higher than India’s level.
The challenge, however, is not simply to increase gas consumption. India must develop a competitive and resilient gas ecosystem covering domestic production, LNG imports, pipelines, city gas distribution, storage, markets and end-use infrastructure.
The scale of the opportunity is illustrated by the IEA’s India Gas Market Report: Outlook to 2030, published in February 2025. The report forecasts Indian natural gas demand to rise by almost 60% between 2023 and 2030, reaching approximately 103 billion cubic metres annually by the end of the decade. Natural gas demand had already increased by more than 10% in both 2023 and 2024, according to the IEA.
India’s domestic gas market has also expanded materially. According to the Petroleum Planning & Analysis Cell, natural gas consumption increased from approximately 60 billion cubic metres in 2022-23 to 67.5 billion cubic metres in 2023-24. In 2024-25, consumption increased further to approximately 72.3 billion cubic metres, while gross domestic production was around 36 billion cubic metres.
This gap between domestic production and consumption demonstrates why LNG will remain an important part of India’s energy security architecture.
PNG: Bringing Natural Gas to the Consumer
One of the most visible dimensions of India’s gas transition is the expansion of Piped Natural Gas, or PNG.
Unlike fuels delivered through individual cylinders or liquid fuels transported by road, PNG creates a continuous energy-delivery system connected directly to consumers. It can serve households, commercial establishments and industrial users.
The scale of the City Gas Distribution expansion is substantial. The Petroleum and Natural Gas Regulatory Board, or PNGRB, has authorised CGD development across 307 Geographical Areas, covering nearly the entire mainland of India and reaching around 784 districts across 34 States and Union Territories. The infrastructure continues to expand rapidly.
As of 31 January 2026, PNGRB reported approximately 1.62 crore domestic PNG connections and 8,616 CNG stations, together with approximately 6.30 lakh inch-km of CGD pipeline infrastructure.
By July 2026, PNGRB data indicated approximately 1.75 crore domestic PNG connections and 9,096 CNG stations.
The long-term target is much larger. PNGRB’s Minimum Work Programme envisages around 12.63 crore PNG domestic connections, 18,336 CNG stations and 5.46 lakh inch-km of CGD pipeline infrastructure by 2034.
This means that the next phase of the gas transition will be less about introducing gas only into India’s largest metropolitan centres and more about achieving reliable last-mile connectivity across emerging cities, industrial clusters and smaller urban markets.
CNG and the Transformation of Urban Mobility
CNG represents another important application of natural gas. India’s transport sector is simultaneously moving toward electric mobility, biofuels and other low-carbon technologies. CNG therefore should not be viewed as the only solution to transport decarisation.
Nevertheless, it has an important role in segments where battery-electric solutions may take longer to scale, particularly in commercial fleets, buses, taxis and high-utilisation urban vehicles.
The expansion of CNG infrastructure demonstrates the changing character of urban energy systems. More than 9,000 CNG stations were already operating by July 2026, according to PNGRB.
The policy challenge is to ensure that CNG expansion is economically efficient and does not lock capital into infrastructure that becomes underutilised as electric mobility accelerates. This calls for a differentiated approach: passenger vehicles may electrify rapidly, while heavy-duty transport, long-distance freight and other high-utilisation segments may require a portfolio involving CNG, LNG, bio-CNG, hydrogen and electricity.
LNG: The International Dimension of India’s Gas Security
Liquefied Natural Gas is strategically important because India cannot currently meet all of its natural gas requirements through domestic production. PPAC data show that LNG imports increased from approximately 26.3 billion cubic metres in 2022-23 to 31.8 billion cubic metres in 2023-24. Natural gas import dependence, based on consumption, reached around 47% in 2023-24 and approximately 50% in 2024-25.
This dependence creates both an opportunity and a vulnerability. LNG provides India access to a geographically diversified global gas market. Cargoes can be sourced from different producing regions, allowing India to reduce dependence on any single supplier. At the same time, LNG prices are influenced by global demand, weather, geopolitical developments, shipping costs, liquefaction capacity and competition from markets in Asia and Europe.
Consequently, the expansion of LNG infrastructure must be accompanied by a broader energy-security strategy. India currently has eight operational LNG terminals with combined regasification capacity of approximately 52.7 million tonnes per annum, according to the Ministry of Petroleum and Natural Gas. PNGRB data also show that utilisation varies substantially among terminals, indicating that increasing capacity alone does not automatically translate into greater gas consumption.
The more important objective is therefore to create an integrated system connecting LNG terminals with the national pipeline network and demand centres.
From Regional Pipelines to a National Gas Grid
Infrastructure is the physical foundation of India’s gas economy. PNGRB data show that by December 2025 approximately 34,273 km of natural gas pipelines had been authorised, of which around 27,427 km were operational. This represents a major transformation from the fragmented pipeline network that existed in earlier decades.
The concept of “One Nation, One Gas Grid” is particularly important because India’s gas resources and demand centres are geographically separated. LNG terminals are concentrated along coastal regions, while domestic production comes from specific sedimentary basins. Major industrial and consumption centres are distributed across the country.
A national pipeline system can therefore improve connectivity between sources and consumers. The introduction of a unified tariff framework is another important institutional development. PNGRB implemented unified tariff arrangements to reduce the disadvantage faced by consumers located far from major gas sources and to support the creation of a more integrated national market.
The strategic objective is not simply to build more kilometres of pipeline. It is to improve utilisation, connectivity, market access and affordability.
Natural Gas and Industrial Competitiveness
Natural gas has applications across fertiliser, refining, petrochemicals, ceramics, glass, steel, city gas, food processing and other industries. For industrial users, energy costs directly influence international competitiveness. Reliable gas supply can also reduce dependence on more carbon-intensive liquid fuels in applications where switching is technically and economically feasible.
The IEA expects industrial activity to remain one of the principal drivers of India’s energy-demand growth through 2030. This creates a substantial potential market for natural gas, particularly where gas can substitute for higher-emission fuels without undermining cost competitiveness.
However, affordability remains critical. Imported LNG can become expensive during periods of tight global supply. Therefore, India’s gas strategy must combine domestic production, long-term LNG contracts, spot-market procurement, diversified suppliers, pipeline connectivity and efficient gas markets.
Domestic Production and Energy Security
Increasing domestic natural gas production is one of the most important requirements for India’s 15% gas-share ambition. PPAC data indicate that gross domestic natural gas production increased from approximately 28.7 billion cubic metres in 2020-21 to around 36 billion cubic metres in 2023-24. Yet production growth has not been sufficient to eliminate import dependence.
India has consequently pursued exploration and production reforms, including the Hydrocarbon Exploration and Licensing Policy and the Open Acreage Licensing Policy. By August 2025, 172 exploration blocks covering approximately 378,652 square kilometres had been awarded under OALP rounds I to IX, while OALP Round X offered another 25 blocks covering approximately 191,986 square kilometres.
The objective should be to improve the conversion of geological potential into commercially viable production while maintaining appropriate environmental and safety standards. Greater domestic production would strengthen energy security, reduce exposure to international LNG prices and retain more economic value within India.
Safety, Technology and Skilled Human Capital
The expansion of gas infrastructure creates another strategic requirement: safety. Natural gas pipelines, LNG terminals, CGD networks and CNG stations operate within technically complex environments. The quality of engineering, welding, inspection, corrosion management, pressure testing, emergency response and integrity management directly affects public safety and system reliability.
PNGRB has established Technical Standards and Specifications, including safety standards, covering natural gas pipelines, CGD networks, LNG facilities and other downstream infrastructure. Its framework includes pipeline integrity management, third-party conformity assessment and emergency response and disaster-management requirements.
The scale of future infrastructure therefore creates demand for engineers, inspectors, safety professionals, technicians, data specialists and skilled operations personnel.
India’s gas transition is consequently not only an energy transition. It is also a technology, infrastructure and human-capital transition.
Natural Gas and the Green Transition
Natural gas should neither be presented as a permanent substitute for renewable energy nor dismissed as irrelevant to the energy transition. Its role needs to be assessed pragmatically. India is targeting 500 GW of non-fossil electricity capacity by 2030 and has committed to achieving net-zero emissions by 2070. At the same time, electricity demand is growing rapidly and renewable generation is variable.
The IEA expects solar PV to meet around half of India’s additional electricity-demand growth through 2030, while coal, wind, nuclear, hydropower and gas provide the remainder. This suggests that India’s future energy system will be diversified rather than dependent on a single technology.
Gas-fired power generation may have a role in providing flexibility during periods when renewable output is insufficient, although the economics of gas-based power remain challenging when LNG prices are high.
The environmental case for natural gas must also be considered carefully. Gas combustion generally produces less carbon dioxide per unit of energy than coal, but methane leakage across the gas and LNG value chain can materially affect climate performance. The IEA has highlighted the importance of methane abatement, reducing flaring, improving process efficiency and addressing emissions across production, transmission, liquefaction, shipping and regasification.
Therefore, a credible gas strategy must include methane measurement, leak detection and repair, improved operational efficiency and stronger emissions management.
Preparing Gas Infrastructure for the Future
An important strategic question is whether today’s gas infrastructure can support tomorrow’s low-carbon economy. There is growing interest in hydrogen blending, renewable gases, biomethane and compressed biogas. PNGRB has examined regulatory and technical requirements associated with hydrogen blending in natural gas pipelines, including potential modifications to technical and integrity-management standards.
This creates the possibility that parts of the gas infrastructure developed during the 2020s could eventually become components of a broader multi-molecule energy network. Such an approach could improve the long-term value of infrastructure investment, provided technical standards, economics and safety requirements are rigorously evaluated.
Energy Infrastructure for Viksit Bharat 2047
The central lesson from India’s energy journey is that the transition cannot be reduced to a choice between fossil fuels and renewables. India needs energy security, affordability, reliability and sustainability simultaneously. Natural gas, PNG and LNG can contribute to this objective by diversifying the energy mix, strengthening industrial competitiveness, supporting cleaner urban fuel systems and providing flexibility as renewable energy expands.
But natural gas must be developed within a wider energy architecture that includes solar, wind, hydro, nuclear, bioenergy, green hydrogen, electric mobility, energy storage and energy efficiency. For Viksit Bharat 2047, the strategic priority should therefore be an integrated energy system rather than fuel-by-fuel policymaking.
The evidence already points toward a major transformation. Natural gas consumption has risen substantially; domestic production has expanded; LNG infrastructure has grown; the national pipeline network is approaching a truly integrated grid; and CGD infrastructure is reaching hundreds of geographical areas and districts.
The next challenge is quality of expansion.
India will need to ensure that every kilometre of pipeline is safe, every LNG terminal is efficiently utilised, every gas connection is economically viable, domestic production becomes more competitive, LNG procurement is diversified, methane emissions are controlled and skilled manpower keeps pace with infrastructure growth.
Natural gas is unlikely to be the final destination of India’s energy transition. Nor should it be treated as merely a transitional fuel with no strategic significance. Its more important role is as a flexible component of India’s evolving energy architecture.
As India moves toward Viksit Bharat 2047, the real objective should be to create an energy system that is resilient enough to withstand global shocks, affordable enough to support inclusive growth, flexible enough to integrate new technologies and sustainable enough to support India’s long-term climate commitments.
India’s energy story, therefore, is ultimately not just about oil, gas or electricity. It is about building the infrastructure, institutions, technology, skills and strategic capabilities required to power a large and increasingly sophisticated economy. The expansion of PNG, CNG, LNG and natural-gas pipelines represents one important chapter in that larger national journey.
