As India’s dependence on solar photovoltaic and wind energy increases, diversifying the energy mix is becoming essential to meet peak electricity demand. Power grids across the country require alternate energy sources for cleaner generation while mitigating outages and system pressures.
Liquefied natural gas (LNG) has emerged as a key component of India’s energy strategy as geopolitics and price volatility continue to shape import dynamics. At the same time, 2025 has drawn attention to the global surge in data centres and energy storage needs, signalling a structural shift for emerging markets like India.
Securing LNG imports
According to the International Energy Agency’s (IEA) analysis of India’s stated policies, LNG imports are expected to rise through the 2030s. Over the same period, the IEA anticipates a wave of global LNG project additions, largely led by the United States. With Europe and China unlikely to absorb all available supply, price-sensitive markets such as India could emerge as natural destinations, though infrastructure constraints remain an open question.
“China and Europe, which are established LNG import markets, will take some additional volumes, but there will be plenty of LNG available and prices could come down,” said Tim Gould, Chief Energy Economist at the IEA. “For India and Southeast Asia, the key question is whether infrastructure will be ready to take advantage of more attractively priced LNG—and where it ultimately finds its place in the energy mix.”
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Growing grid congestion
Rising electricity demand from vehicle electrification, industrial activity and artificial intelligence-led workloads is placing new pressure on India’s power grids. Data centres—energy-intensive facilities essential for digital services—are emerging as a significant driver of demand. While most global data centre capacity is expected to come up in the US, EU and China, India has also become a preferred destination, with companies such as Google, Microsoft, NTT Data and TCS announcing projects.
“At the local level, there are already signs of grid congestion,” Gould noted, highlighting challenges faced by new projects in securing reliable power access. This underscores the need for sustained investment in transmission infrastructure and grid resilience.
Geopolitics of critical minerals
Critical minerals remain indispensable to the energy transition, but supply chains are increasingly shaped by geopolitics. IEA data shows China’s dominance in refining and processing, exposing global supply to concentration risks. For India, which remains heavily import-dependent, diversification is crucial.
“We are working with countries, including India, to build more resilient and diversified supply chains,” Gould said, pointing to opportunities not only in mining and refining but also in recycling. While the US has stepped up financing for critical mineral projects and launched initiatives such as Pax Silica, India’s Strategic Clean Energy Partnership with the US has yet to formally include critical minerals.
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In an era marked by volatile LNG markets, AI-driven electricity demand and mineral geopolitics, India’s energy challenge now extends beyond clean generation to ensuring grid stability, supply chain resilience and long-term energy security.
