IGU Calls For Market Reforms To Unlock India’s Gas Growth

31 Jul 2026 CW Team

While regasification terminal capacity has been significantly expanded, investment in midstream infrastructure has lagged and constrained the ability to raise gas consumption. The report argued that reforms to pricing mechanisms and market access are essential to support sustained growth in gas demand. It noted that the Strait of Hormuz crisis underlined import dependencies and that India is heavily reliant on Gulf-sourced liquefied petroleum gas and liquefied natural gas, with Qatari exports a primary source.

The analysis said domestic gas output meets around 50 to 52 per cent of the country’s demand, with the balance met through LNG imports from Qatar, Australia, the US and Russia. LPG dependence is higher, with imports covering around 60 to 65 per cent of requirements despite India’s large consumption. Disruption to transit through the Strait of Hormuz during the recent Iran war exposed this vulnerability and the report said prospects could improve if the Gulf crisis eases and new export capacity comes online later in the decade.

The report said India must enable buyers to respond to short-term LNG price opportunities by liberalising terminal bookings and system entry charges and improving access. It warned gas will struggle to compete with coal without significant transmission expansion and competitive transport tariffs to supply the north, east and centre. The analysis added that meaningful investment is unlikely without wholesale price reform after the shift to hub-linked pricing in 2015 and the 2022 link to oil, with domestic prices remaining above USD seven per million British thermal units.

The International Gas Union report said India’s long-term natural gas growth will depend on expanding liquefied natural gas import capacity and accelerating investment in transmission and distribution infrastructure, gas-intensive industries and reforms to market design, regulation and pricing. The analysis urged policy changes to support sustained demand growth rather than relying solely on import terminals. It recommended a coordinated approach across public and private stakeholders to unlock the next phase of gas deployment. While regasification terminal capacity has been significantly expanded, investment in midstream infrastructure has lagged and constrained the ability to raise gas consumption. The report argued that reforms to pricing mechanisms and market access are essential to support sustained growth in gas demand. It noted that the Strait of Hormuz crisis underlined import dependencies and that India is heavily reliant on Gulf-sourced liquefied petroleum gas and liquefied natural gas, with Qatari exports a primary source. The analysis said domestic gas output meets around 50 to 52 per cent of the country’s demand, with the balance met through LNG imports from Qatar, Australia, the US and Russia. LPG dependence is higher, with imports covering around 60 to 65 per cent of requirements despite India’s large consumption. Disruption to transit through the Strait of Hormuz during the recent Iran war exposed this vulnerability and the report said prospects could improve if the Gulf crisis eases and new export capacity comes online later in the decade. The report said India must enable buyers to respond to short-term LNG price opportunities by liberalising terminal bookings and system entry charges and improving access. It warned gas will struggle to compete with coal without significant transmission expansion and competitive transport tariffs to supply the north, east and centre. The analysis added that meaningful investment is unlikely without wholesale price reform after the shift to hub-linked pricing in 2015 and the 2022 link to oil, with domestic prices remaining above USD seven per million British thermal units.

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