The International Energy Agency (IEA) has made a groundbreaking projection that will reshape global energy dynamics: India is set to become the world's largest demand center for energy by 2035. According to the agency's latest energy outlook, nearly half of the additional global energy demand over the next decade will originate from the rapidly growing South Asian nation.
India's Unprecedented Energy Growth Trajectory
The IEA's analysis reveals that India's annual energy consumption will increase by 3.0-3.6% annually until 2035, driven by robust economic expansion. India's GDP is projected to grow by an average of 6.1% each year, outperforming all other major countries and regions. This economic surge will result in GDP per capita being 75% higher in 2035 than current levels.
The scale of India's energy demand becomes evident when examining specific sectors. The country will add approximately 12,000 cars to its roads every day by 2035, creating sustained demand for transportation fuels. Simultaneously, Indian households are expected to install over 250 million new air conditioners over the next decade, significantly increasing electricity consumption.
Current Energy Consumption Patterns and Import Dependencies
India already ranks as the third-largest crude oil importer globally, trailing only the United States and China. Recent data from the Petroleum Planning & Analysis Cell shows India imported 243.2 million tonnes of crude oil in FY25, marking a 3.8% increase from the previous year's 234.3 million tonnes.
Petroleum product consumption has been breaking records consistently. FY25 witnessed consumption reaching nearly 242 million tonnes, with projections indicating a fresh record of 252.9 million tonnes for FY26. This growing appetite for energy has translated into a substantial import bill, with crude oil imports costing India $137.2 billion in FY25, up from $133.4 billion in FY24.
Prashant Vasisht, Senior Vice President and Co-Group Head of Corporate Ratings at ICRA Ltd, highlighted the concerning trend: "Domestic production of oil has somewhat declined in the past few years. So, with global suppliers being the main source of energy, the import bill may increase further going ahead."
Global Energy Context and Climate Implications
The IEA's projections mark a significant reversal from previous forecasts. The agency now expects global oil consumption to continue growing until 2050, abandoning earlier predictions of 'peak oil' by 2030. This shift reflects strong ongoing demand from petrochemicals, aviation, and transportation sectors worldwide.
While India's energy demand surges, China's consumption patterns show signs of plateauing. The IEA notes that output levels from established Chinese industries like steel and cement have peaked and are projected to decline. Meanwhile, the United States is experiencing a policy-driven shift, with energy demand expected to rise by 0.5% annually until 2035 after two decades of relative stability.
The growing global energy consumption poses serious challenges for climate goals. The IEA has warned that the target to limit global temperature increases to 1.5 degrees Celsius above pre-industrial levels by 2100 will not be achievable. Current trajectories suggest temperatures will overshoot this critical threshold, with the world not on track to meet internationally agreed climate goals.
This comprehensive analysis from the International Energy Agency underscores India's emerging centrality in global energy markets. As the country continues its economic ascent, its energy needs will not only shape domestic policy but also influence international energy prices, trade patterns, and climate negotiations for decades to come.
