India’s gas story is no longer theoretical. The unanswered question though is execution discipline
I see India’s natural gas sector entering a structural inflection phase. For a decade or more, gas in India had swung between promise and stagnation, hampered by price volatility, infrastructure bottlenecks, and global supply shocks. But today the fundamentals are changing in a way that requires serious global attention.
Drawing from my advisory work in energy and biogas projects across India, this will be the decade where it becomes clear if India is going to become a gas-based economy or natural gas remains only an aspirational short-term target.
The growth signal is real
India’s gas demand is expected to grow close to 60 per cent between 2023 and 2030, from approximately 65 bcm annually to around 103 bcm.
This is structural growth, not incremental expansion.
Decentralised commercial and industrial (C&I): The city gas distribution (CGD) sector will be the mainstay of this category, with compressed natural gas for transport and piped natural gas connections in urban households. Meaningful demand growth is also expected for industrial users such as iron and steel, manufacturing, and refining. With targeted policy measures, demand could even rise to 120 bcm/year in 2030.
From a systems perspective, this growth represents three reinforcing dynamics:
· Just the rapid build-out of liquefied natural gas (LNG) regasification and pipe (2023-10-08)
· Moderate recovery of domestic upstream production
· Anticipation of relaxation of constraints on global LNG supply after 2026
The infrastructure build out is notably important. India’s gas transmission backbone is likely to be around 35,000 km by the end of this decade. LNG import capacity already totals some 65 bcm/year and is set to increase further. To do this on such a scale signals long-term strategic intent.
The structural constraint: Domestic supply limits
Domestic output is expected to climb only up to about 38 bcm in 2030 despite renewed production in the Krishna Godavari basin and coal bed methane projects. That is only 8 per cent above present levels.
That makes India’s gas future import linked.
LNG imports could more than double in volume to roughly 64 bcm/year by 2030.
This renders India structurally dependent on global LNG markets, contract discipline, and pricing strategy.
Unless long-term contracts can be extended beyond 2028, India runs the risk of being exposed to spot market volatility precisely the vulnerability that led to markets being upended in 2022.
The power sector reality check
A significant tension still exists in gas-fired power generation. Gas plants are operating at a low utilisation rate, primarily due to competition with the cost of fuel from coal.
Gas-based generation competes poorly against coal-based generation at ~Rs 4/kWh as long as LNG prices are above US$ 8-10/MBtu. Dispatch economics don’t change meaningfully until gas prices sustainably fall below US$ 6/MBtu.
But an economic comparison ignores externalities. This changes the merit order when air pollution, health costs, and carbon intensity are internalised. Gas provides considerable local pollutant reductions and a much lower carbon intensity than coal.
And not just price, but do policy frameworks start to reflect true system costs?
The underutilised strategic resource: Compressed biogas
One of the most neglected sectors in Indian gas transition is compressed biogas (CBG). The technical potential is around 87 bcm per year, but operational capacity is less than 1 per cent of that number.
With feedstock aggregation, logistics, land access, and offtake assurance on the plate for India to tackle, CBG could be a raging domestic buffer against LNG dependence. From my field perspective, CBG is not merely an environmental play; it is a strategic energy security lever.
With current policy support, output per year could increase to 0.8 bcm by 2030.
With industrial scale ecosystem development, that number could be materially higher.
Market reform: Necessary but incomplete
Proven need for gas market modernisation in India
Unified pipeline tariff implementation
Expansion of third-party access
India: Launching of Indian Gas Exchange (IGX)
Transmission and marketing unbundling, however, is incomplete. The average utilisation of pipelines is only around 40 per cent. No underground gas storage yet in place.
At the same time, I believe that infrastructure, contract flexibility, and regulatory independence must deepen for liquidity in India to converge with mature hubs.
The 15% target: Ambition vs. trajectory
India aims to raise the share of gas in its primary energy mix to 15 per cent by 2030. The resulting number would roughly be 182 bcm (barrels of crude oil equivalent), up from the base case prediction of about 103 bcm per year.
Is the target unrealistic? Not necessarily. But it requires:
Aggressive CGD acceleration
Structural support for gas-fired balancing power
Large-scale LNG contracting discipline
Rapid scale-up of CBG
Transparent carbon pricing or pollution-cost internalisation
Without these levers, growth will be strong but not sufficient to reach the headline target.
Final assessment
India’s gas story is no longer theoretical. The infrastructure is real. The demand growth is visible. The policy direction is declared. The unanswered question is execution discipline.
Natural gas can be India’s strategic bridge that reduces oil imports, displaces coal in high pollution zones, allows for renewable integration, and improves air quality in cities. But a bridge has to be structurally engineered, not merely politically declared. The decade to 2030 will define whether India’s gas expansion becomes a stable structural transformation or another cycle of promise constrained by pricing, logistics, and reform hesitation.
From a global energy perspective, India is now one of the most consequential gas markets in the world.
Srinivas Kasulla is a global expert in biogas, bio-CNG and circular bioeconomy
Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth