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As India’s energy demand is set to surge, experts emphasise energy efficiency as crucial for climate action, economic competitiveness, and national security.
With India remaining a net energy importer, efficiency gains are vital to mitigate global market volatility.
The focus is on avoiding high-consumption pathways and achieving growth with reduced energy use.
As India’s energy demand is projected to grow 2.5 times over the next two decades, policymakers and experts are increasingly positioning energy efficiency as the country’s “first fuel” — critical not only for climate action, but also for national security and economic competitiveness.
India will remain a net importer of energy for the foreseeable future, making efficiency gains essential to reduce exposure to volatile global fuel markets, said Krushna Panigrahy, director general of Bureau of Energy Efficiency (BEE), at the Forum on Energy Efficiency and Decarbonisation 2026 conference by the Alliance for an Energy Efficient Economy.
“Energy efficiency is not a choice. It is a necessity for industries to survive in a competitive world,” Panigrahy said, adding that India must avoid repeating the high-consumption pathways of developed economies and instead chart an “efficient Bharat 2047” trajectory.
India’s per capita energy consumption is currently about a third of the global average, but is expected to rise as incomes grow. Government projections show that by 2047, per capita consumption could reach 50.9 gigajoules, though this can be reduced to 44.7 gigajoules through efficiency and conservation measures inspired by the government’s Lifestyle for Environment approach.
He stressed that higher living standards do not necessarily require proportionally higher energy use. “We can have a comfortable and ambitious lifestyle without depreciating what we already have,” he said.
India has already made progress on its climate commitments, achieving 50 per cent non-fossil fuel-based installed electricity capacity five years ahead of target, and cutting emissions intensity by 36 per cent from 2015 levels, moving toward a 45 per cent reduction target.
Industry and buildings together account for more than 90 per cent of India’s total energy consumption, with industry alone contributing 48.3 per cent and buildings 42.5 per cent, according to BEE estimates. Transport follows as the third-largest consumer.
Implementation of energy efficiency measures has already resulted in savings of around 65 million tonnes of oil equivalent, roughly 6 per cent of India’s total primary energy supply, translating into Rs 2.82 lakh crore in cost savings and 365 million tonnes of CO2 emissions avoided.
“These are only accounted savings,” Panigrahy noted, adding that better digitalisation of energy data could reveal significantly higher gains.
Despite progress, experts flagged mindset barriers as a major challenge. Investments are still judged on upfront capital costs rather than lifecycle savings, limiting adoption of efficient technologies, said speakers from industry and global technology firms.
Another challenge lies in micro, small and medium enterprises (MSME), which form the backbone of India’s economy but often lack access to finance and technical support for energy upgrades. To address this, BEE has designed a scheme offering 5 per cent interest subvention for micro enterprises adopting technologies that deliver at least 10 per cent energy savings, with potential savings rising to 45 per cent in some cases.
Experts also highlighted the water–energy nexus as an underexploited opportunity. Even a 1 per cent efficiency improvement in water pumps nationwide could save hundreds of gigawatt-hours of electricity annually, noted Richa Gautam, director, CSR and Sustainability at Schneider.
India has built a strong regulatory framework, but the next step is to create robust markets for energy efficiency, Panigrahy said. This includes scaling up the Indian carbon market, which currently covers 490 large energy-intensive industries, and expanding assisted energy efficiency programmes for smaller firms.
Digital tools, artificial intelligence and smart metering are expected to play a central role. By March 2025, all government offices are required to shift to prepaid smart meters to improve transparency and demand-side management, while AI-based systems are being explored to stabilise grids with rising renewable energy penetration.
Cooling is a rapidly growing source of energy demand. For this, India has notified progressively stricter energy efficiency norms for air conditioners, starting January 2026, with further tightening planned by 2028–29 that could improve efficiency by 23 per cent over current baseline models.
They agreed that the coming decade will be decisive. “Energy efficiency must be treated as a resource, not just a compliance requirement,” Milind Deore, secretary, BEE, said, calling for innovative financing, standardised risk assessment and indigenous manufacturing to unlock large-scale investment.
As India pursues rapid growth while navigating climate risks and energy security concerns, experts argued that efficiency across industry, buildings, transport and water systems will determine whether the country can decouple prosperity from emissions.