India has set an ambitious target of moving towards a gas-based economy by increasing the share of natural gas in its primary energy mix to 15% by 2030. Natural gas is versatile, cleaner and efficient, making it a strategic fuel of the future. However, the Indian natural gas market has been affected by its availability, inadequate distribution pipeline network and price competitiveness of imported gas (LNG).

LNG imports in to India has grown steadily over the years and has LNG import capacity of over 40 mmtpa is operational. Presently LNG import accounts to almost 50% of country’s gas consumption. India imported 31028 mmscm LNG in 2021-22 and has imported 26304 mmscm LNG till November 2023. Indian gas market being price sensitive, higher international LNG prices have resulted in lower LNG import volumes in recent ties. However, with several new LNG liquefaction capacities expected to start production in the world in coming time, the abundance of LNG may lead to a lower LNG price regime in near future which may favourably help Indian gas market to grow.

Another major positive factor to help Indian Gas Market to grow is the developing gas pipeline infrastructure network. The country has about 21,700 km natural gas pipelines which are already operational and another 13,605 kms of gas pipeline are under construction. The fast development and expansion of National Gas Grid infrastructure, implementation of Unified tariff mechanism and improvement in capacity utilization of pipeline infrastructure would provide a fillip to affordable gas distribution across the nook and corner of the country.