India's Gas Growth Hinges on Infrastructure and Pricing Reforms

India's long-term natural gas growth depends on expanding LNG import capacity and accelerating investment in transmission and distribution infrastructure, according to a new report by the International Gas Union (IGU).

The report highlights that while India has increased regasification terminal capacity, investment in midstream infrastructure has lagged, limiting gas consumption. To support sustained growth, reforms to pricing mechanisms and market access are essential.

India's heavy reliance on Gulf-sourced LPGs and LNG, particularly from Qatar, makes it vulnerable to disruptions like the Strait of Hormuz crisis. The report notes that a wave of new LNG export capacity coming online will leave global markets well supplied, putting downward pressure on prices.

To capitalize on lower global prices, India needs to enable buyers to respond effectively to short-term LNG price opportunities. This requires liberalisation of terminal capacity bookings and system entry charges, improving access for buyers and addressing historically low utilisation rates at import terminals.