India to be the world's largest driver of energy-demand growth by 2035: International Energy Agency's (IEA)
- IBEF
- November 13, 2025
India has achieved its 2030 energy target five years ahead of schedule, reaching 50% grid-connected power capacity from non-fossil sources in 2025, according to the International Energy Agency's (IEA) World Energy Outlook 2025. The IEA projects India will be the world's largest driver of energy demand growth through 2035, with total energy demand increasing by over 15 exajoules - nearly matching combined growth from China and Southeast Asia. This surge is fuelled by rapid urbanisation and an economy expanding at 6.1% annually, raising per-capita income by 75%. The country will add urban populations equivalent to one Bangalore annually, increase built-up floor space by 40%, add nearly 12,000 cars daily, and install over 250 million air conditioners by 2035. Clean energy investment has transformed dramatically from a 1:1 ratio with fossil fuels in 2015 to 1:4 in 2025, with solar PV attracting Rs. 10,02,197 crore (US$ 113 billion) over the past decade compared to Rs. 9,93,328 crore (US$ 112 billion) for all fossil-fuel generation combined. Non-fossil sources are projected to constitute 60% of installed capacity by 2030 and 70% by 2035, accounting for over 95% of new additions.
Solar and wind generation will rise from 11% of electricity currently to above 25% by 2030 and nearly 40% by 2035, while nuclear capacity will triple by 2035. This transition will cut carbon intensity by nearly 45% but requires significant grid upgrades, including over 230 gigawatt-hours of battery storage by 2030 and 200,000 km of new transmission lines. Despite progress, coal remains critical for dispatchable power, and 20% of Indians still rely on traditional biomass for cooking. The power sector faces financial strain, with Rs. 62,083 crore (US$ 7 billion) in delayed payments to generators reported in October 2025, though reforms have doubled foreign direct investment to nearly 10%. The IEA concludes that India's choices will shape global markets for solar modules, batteries, liquefied natural gas (LNG), and critical minerals, determining whether growth cements a low-carbon path or locks in coal dependence.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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