India will need to mobilise around $145 billion in annual investments to bridge the gap between its strong economic growth and ambitious energy transition goals, according to a new report released on Tuesday.
The report by energy and natural resources data analytics firm Wood Mackenzie said the bulk of investments would be required in power generation, energy storage systems, and urgent modernisation of the electricity grid to support India’s long-term net-zero ambitions.
Despite rapid progress in renewable energy, the report noted that India remains on track to achieve its target of producing 1.5 billion tonnes of coal by 2030, with growing emphasis on coal gasification to diversify the country’s energy mix and enhance energy security.
Wood Mackenzie projected that India’s natural gas demand would nearly double from 72 billion cubic metres in 2024 to more than 140 billion cubic metres by 2050. Industry is expected to account for over two-thirds of gas demand in the coming decades, remaining above 55 per cent through 2050.
While highlighting gaps between economic growth and climate targets, the report said India is uniquely positioned to emerge as one of the world’s most credible large-scale alternatives to China in the global solar and battery supply chain. As global markets diversify procurement sources, India’s expanding manufacturing ecosystem offers a competitive advantage.
Joshua Ngu, Vice Chairman for Asia Pacific at Wood Mackenzie, said India must balance immediate energy security needs while building the low-carbon infrastructure required to support a globally competitive economy.
Rashika Gupta, Vice President of Power and Renewables Research at the firm, said the estimated $1.5 trillion investment required between 2026 and 2035 is not only about increasing generation capacity but also about strengthening transmission and distribution infrastructure.
She added that the success of the transition would depend heavily on market reforms, particularly the proposed Electricity Amendment Bill, which aims to improve competition in power distribution and provide clearer investment signals for private capital.
The report also noted that hydrocarbon fuels will remain critical for near-term energy stability. India’s crude oil import dependence is projected to rise to 87 per cent by 2035, underscoring the need to revitalise upstream exploration and attract international oil companies to the country’s oil and gas sector.
