The world’s energy map is tilting toward Asia, and India sits squarely at its center, according to the World Energy Outlook 2025 released by the International Energy Agency (IEA). The report warns that while clean energy investments are expanding, global climate ambitions are faltering, and critical mineral supply chains are emerging as the new fault line in energy security.

The IEA says India, alongside Southeast Asia and the Middle East, will drive nearly all growth in global energy demand over the next decade. “The center of gravity of the global energy system is shifting decisively towards emerging economies, led by India,” the report notes, underscoring that China’s demand growth has begun to plateau as its economy matures.

Energy Demand to Surge, Led by Electricity and Cooling

India’s electricity consumption is projected to nearly double by 2035, propelled by economic expansion, rising incomes, and the world’s fastest-growing use of air conditioning. The IEA projects global electricity demand to rise 40–50 per cent by 2035, but in India the growth could be sharper as the country electrifies transport and manufacturing.

Yet, while renewables—especially solar—remain the dominant growth story, the IEA warns of a lag in power grid investment. “Electricity generation investments have surged 70 per cent since 2015, but grid spending has risen at less than half that pace,” the report cautions. For India, already grappling with transmission bottlenecks and uneven renewable integration, that imbalance could choke the momentum of its clean energy transition.

India’s Dual Challenge: Expanding Supply, Managing Emissions

Despite record renewable additions, India’s coal dependency is unlikely to fade quickly. The IEA notes that half of global coal demand comes from emerging economies, with India second only to China. Under its “Stated Policies Scenario,” India’s coal use begins to flatten by 2030 as solar capacity expands, but any slowdown in renewables or grid delays could prolong dependence on fossil fuels.

“India’s energy transition remains a paradox,” said an energy economist at a Delhi-based think tank. “It is simultaneously a renewable leader and a coal consumer — and both trends will continue for the foreseeable future.”

The IEA’s Net Zero by 2050 pathway suggests that without accelerated reforms, global warming could exceed 2.5°C, well beyond the Paris targets. India’s own emissions, while modest per capita, are set to rise with industrial growth, raising the stakes for decarbonization policies in transport, steel and cement.

Critical Minerals and Energy Security Risks

The IEA paints a stark picture of concentration risks in critical minerals — materials vital for solar panels, batteries and EVs. A single country, China, refines 19 of 20 energy-related strategic minerals. The agency warns that this dominance could expose emerging economies like India to supply shocks or price coercion.

For India, which has announced plans for domestic lithium refining and mineral exploration, the message is clear: diversify or remain vulnerable. The IEA urges countries to “build resilient partnerships and regional supply chains” to counter growing geopolitical risks.

LNG Glut Could Benefit India

The report also foresees a global surplus of liquefied natural gas (LNG) by 2030, with 300 billion cubic meters of new annual capacity under development, half of it in the United States. As Europe and China curb gas demand, lower LNG prices could benefit South and Southeast Asia — particularly India — where affordability remains key. The IEA predicts “significant” gas switching from coal in price-sensitive markets if supply remains abundant.

Universal Access Still Elusive

Despite progress, nearly two billion people still rely on polluting cooking fuels, the IEA said. India has made major strides through LPG distribution schemes, but clean cooking remains out of reach for many low-income households. The IEA’s new ACCESS Scenario envisions universal electricity access by 2035 and clean cooking by 2040, requiring sustained investment in mini-grids and cleaner fuels.

The Bigger Picture

The IEA’s warning is blunt: the world is “falling short” of its climate and access goals. While renewable capacity is on track to nearly triple by 2030, efficiency gains are lagging far behind. For India, this gap between ambition and execution is especially critical. The country must not only meet its surging energy demand but do so without derailing global decarbonization efforts.

As the IEA puts it, “The age of electricity is here — but the speed, resilience and inclusivity of this transformation will define who prospers and who falls behind.”

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