India’s energy demand is rising sharply, driven by urbanisation, industry and growing electricity use
Coal remains dominant, accounting for nearly 79% of domestic energy supply despite renewable expansion
Renewable energy capacity and generation are growing fast, led by solar and wind
Heavy reliance on imported oil and gas continues to expose India to global price shocks
Balancing energy security with climate targets will define India’s energy transition in the coming decade
India’s energy sector is entering a decisive decade, balancing surging demand from a fast-growing economy with an accelerating transition towards cleaner sources.
Latest data for the 2024-25 financial year shows a system still anchored in fossil fuels, particularly coal, even as renewable capacity and policy ambition expand rapidly. With urbanisation, industrialisation and electrification deepening, the country’s energy trajectory is expected to test both infrastructure resilience and climate commitments in the years ahead.
Coal continues to dominate India’s energy mix, accounting for nearly 79 per cent of domestic energy supply in FY25, underlining the structural reliance on fossil fuels. Domestic coal production rose to more than 1,047 million tonnes, reflecting steady growth to meet rising electricity and industrial demand.
Oil and gas also remain critical. Crude oil imports increased, with import dependence remaining high at nearly 89 per cent, exposing the economy to global price volatility. The findings come from Energy Statistics India 2026, published by the Union Ministry of Statistics and Programme Implementation (MoSPI), drawing on data from several government agencies including the Ministries of Coal, Power, Petroleum and Natural Gas, New and Renewable Energy, and the Geological Survey of India.
The report provides a broad snapshot of reserves, production, consumption, trade and sustainability indicators shaping India’s energy landscape.
Coal production rose 4.98 per cent year-on-year to 1,047.52 million tonnes, with non-coking coal accounting for around 93.65 per cent of output. Coal imports, however, declined by 8.1 per cent to 241.71 million tonnes. At the same time, natural gas imports rose by 12.3 per cent to 35.72 billion cubic metres, while crude oil imports increased from 234.26 million tonnes to 243.22 million tonnes.
Alongside this, renewable energy is scaling at pace. India’s total renewable energy potential has reached more than 4.7 million megawatts (MW), with solar accounting for around 71 per cent and wind close to 25 per cent as of March 2025.
Electricity generation from renewables has more than doubled over the past decade, growing at a compound annual rate of over 9 per cent, driven by policy support, falling technology costs and increased private investment, the report said.
Despite this progress, the transition away from fossil fuels remains uneven. Globally, fossil fuels still account for over 90 per cent of energy consumption, and India reflects this trend, albeit with faster renewable growth.
Domestically, coal, oil and gas together account for over 96 per cent of total primary energy supply, highlighting the scale of transformation required to align with climate goals.
Noting that “coal remained the backbone of India’s energy supply”, the report highlighted that coal alone accounted for nearly 79 per cent of total energy supply domestically in FY25.
Energy demand itself is rising sharply. Total Primary Energy Supply grew by nearly 3 per cent in FY25, while Total Final Consumption has increased by around 30 per cent since FY16. The residential sector recorded the fastest growth in energy use, followed by the commercial and transport sectors, signalling a shift towards consumption-led demand alongside industrial expansion.
Electricity generation from renewable sources (both utility and non-utility) rose to 4.1 million gigawatt hours (GWh) in FY25, up from 1.9 million GWh in FY15. Availability has also improved, with supply increasing by more than 5 per cent and transmission losses declining to 17.52 per cent.
However, the scale of future demand, driven by electric mobility, cooling needs and digital infrastructure, will require significant investments in grid modernisation and storage solutions.
Import dependence remains a key vulnerability, the report found. While coal imports declined slightly, natural gas imports rose sharply and crude oil imports continued to climb, underlining the dual challenge of ensuring energy security while accelerating domestic clean energy deployment.
Looking ahead, India’s energy pathway will hinge on how effectively it integrates renewables into the grid while managing legacy fossil infrastructure. The government’s target of achieving 500 gigawatt of non-fossil fuel capacity by 2030 and net-zero emissions by 2070 sets a clear direction, but execution will determine outcomes.
Financial flows into clean energy are already rising, with credit to the renewable sector increasing more than six-fold over five years. This trend is expected to intensify as global capital aligns with climate targets and domestic policies incentivise green investments.
In the coming decade, India’s energy story is likely to be defined by a delicate balancing act, meeting the energy needs of a growing economy while reshaping its energy mix. The pace at which coal dependency declines and renewables scale will not only shape domestic sustainability outcomes but also influence global climate trajectories.