India's Gas Demand Growth Halted by Infrastructure Shortfalls and Gulf Reliance

India's gas demand growth is hindered by inadequate investment in midstream infrastructure and reliance on imports from the Gulf region, according to a recent report. The country's regasification terminal capacity has expanded significantly, but investments in transportation networks have lagged behind, limiting India's ability to increase gas consumption.

The Strait of Hormuz crisis has exposed the vulnerabilities in India's gas supply chains, with the majority of LPG and LNG imports passing through the strait. The report notes that even if the Gulf crisis eases, the outlook for global LNG markets is expected to be well supplied, putting downward pressure on prices.

However, the report emphasizes that price alone will not drive higher gas consumption in India. Meaningful investment is unlikely without fundamental reforms of wholesale gas pricing, which has undergone multiple changes over the past decade.