More Stories

Informist, Wednesday, May 21, 2025

NEW DELHI - Amid weak global demand outlook, India is emerging as a lucrative energy market, according to S&P Global Commodity Insights. Despite global oil markets facing weakened fundamentals in 2025 due to mounting supply from both Organization of the Petroleum Exporting Countries and allies and non-OPEC countries, India's energy demand is expected to grow, driven by favourable demographics and economic growth, S&P experts said at a roundtable conference held here Wednesday. 

"For India, oil demand continues to grow helped by favourable demographics and economic growth. India is quickly assuming a prominent place in the global oil demand growth order," Pulkit Agarwal, head of India content (cross-commodities) at S&P Global Commodity Insights, said. India's pivot to Russia for oil continues largely unhindered, and the country's growing role as a demand driver is expected to play a significant role in shaping global energy dynamics.

"At a time when oil is going through a major problem with excess supply and depresssed demand, countries like India and Middle East are acting as green shoots," he said. According to Agarwal, the world has entered into a phase where demand is lagging but supplies are coming in "quick and fast." Furthermore, poor sentiment due to tariff uncertanity from the US is adding to it. 

"Even China, which has been a contributor of half of the global demand has not done well," he said. At such a time, even demand from India cannot match the excess supply, he said. 

COAL DEMAND  

Pritish Raj, managing editor for Asia Thermal Coal at S&P Global Commodity Insights, sees India's coal demand rising 5% per year till 2030. The demand is likely to surge 60% from the current levels over the next 25 years with most of the incremental demand met by domestic supply.

"Coal produces about 36% of the global electricity and about 77% of Indian electricity. Even if coal mix from total electricity production goes down to 66% by 2030, the absolute amount of coal required by the country is still seen rising to match India's growing power needs," Raj said. 

"India's pace of domestic coal production has been phenomenal, and our estimate is that India's 1.5 billion tonne production target is a reasonable expectation," he said. However, as India's requirements grow, the country will in the next few decades take over China as the biggest coal importer, he added. "The country is thus unlikely to reduce its coal import dependency as sharply as govenrment's projections," Raj said. 

According to the company, India's total coal imports are likely to remain at around 250 million tonnes till 2028 despite improving domestic coal supply. 

PETROCHEMICAL DEMAND 

Global petrochemical producers are betting on India as a key demand driver in 2025, Stuti Chawla, associate director, India and Middle East Chemicals Pricing at S&P Global Commodity Insights said. "India's petrochemical demand is likely to outpace GDP growth in 2025-26 (Apr-Mar), despite concerns over a drop in urban demand and inventory build-up seen in the domestic markets amid tariff concerns," she said. 

However, over supply of petrochemicals has been eating into profits and margins of producers, she noted, stating, that even though India's appetite for petrochemicals remains strong, in fact, the strongest in Asia, it has not resulted in good tidings for domestic petrochemical producers. "Their margins remain under pressure as the cycle of capacity additions continues in China, the Middle East and the rest of Asia, leading to oversupplied markets," he said.

Indian per capita demand is one-third of the global per capita demand, she said. "There is still a lot of room for India to grow," she said. She sees India becoming a $1 trillion market for petrochemicals by 2040 as against the current $300 billion.   End

Reported by Pallavi Singhal

Edited by Vandana Hingorani

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (11) 4220-1000

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.