India's Gas Market Reforms Crucial for Long-Term Growth

India's long-term natural gas growth hinges on comprehensive market reforms, stronger infrastructure investment, and greater demand from energy-intensive industries, according to a new report by the International Gas Union (IGU). The country has expanded its Liquefied Natural Gas (LNG) regasification capacity significantly, but investment in midstream infrastructure, including gas transmission pipelines and distribution networks, has lagged behind. This imbalance has constrained the expansion of domestic gas consumption and limited the full utilisation of existing import capacity.

The IGU report highlights India's continued reliance on imported natural gas despite efforts to boost domestic production. Domestic gas production currently meets only about 50-52% of national demand, with the remaining requirement fulfilled through LNG imports from Qatar, Australia, the United States, and Russia. The report states that increasing domestic demand for cleaner fuels will require reliable infrastructure, transparent market rules, and policy certainty to attract long-term investment across the gas value chain.

The report also underlines the strategic risks associated with India's energy imports. The recent Strait of Hormuz crisis demonstrated the country's vulnerability to disruptions in global energy supply chains because a significant portion of India's LNG and LPG imports passes through this critical maritime route. Improving supply diversification and strengthening domestic gas infrastructure will be essential to reducing such risks in the future.