India's Gas Market Struggles to Take Off Despite Extensive Infrastructure

India has extensive gas infrastructure, including eight LNG import terminals and nearly 26,000 kilometers of transmission pipelines. However, only about 3% of its natural gas is traded due to government allocations, long-term contracts, and policy bottlenecks.

The country's largest consumer of gas is the fertiliser sector, accounting for roughly 30%, followed by city gas distribution at 20%. The power sector's share has been declining, generating only about 5% of India's electricity.

The price of gas in India is often set by government formulas or negotiated privately between large companies, and rarely published. For most of the country's gas supply, the producer is not free to sell it as they wish.