The India Natural Gas Market is projected to register a strong CAGR during the forecast period (2026-2031).
The natural gas market in India operates under a regulatory allocation framework that is based on multiple sources of supply and a growing pipeline infrastructure managed by the Ministry of Petroleum and Natural Gas. Demand across key sectors is met through a combination of domestic production and large-scale LNG imports (which represent a significant portion of total supply). Pipeline integration and CGD rollout will support enhanced connectivity at the last-mile level and enable consumption to switch away from traditional industrial fuels. Natural gas-producing companies use some quantity of gas for their own use as internal consumption, while some quantity of gas is flared as a part of the technical requirement. After flare, loss and internal consumption by gas-producing companies, the net production for sale of gas to consuming sectors like power, fertiliser, CGD, refinery, petrochemicals, etc. was approximately 83% of the gross production during December 2025.
CGD network expansion: Over 300+ Geographical Areas (GAs) covering ~98% of the population have been authorised, as per the Petroleum and Natural Gas Regulatory Board (2025). This directly translates into structural demand creation, as new districts transition from liquid fuels to piped gas and CNG consumption.
Pipeline infrastructure expansion: India’s pipeline network has reached ~24,000 km, according to the Petroleum Planning and Analysis Cell (2025). This enables physical market integration, reducing regional supply imbalances and improving gas offtake from previously underconnected regions.
Domestic gas allocation policy: 2025 allocation frameworks prioritise fertilisers and CGD under the Ministry of Petroleum and Natural Gas. This ensures baseline demand stability, insulating core consumption from price volatility and supply fluctuations.
Gas-based economy target: The government’s target to raise the gas share to ~15% by 2030 continues to be reinforced in the 2025 policy direction by the Ministry of Petroleum and Natural Gas. This drives long-term investment visibility across upstream, LNG, and infrastructure segments.
Domestic gas availability for sale declined to 5,254 MMSCM in December 2025, reflecting a 2.6% year-on-year decrease, as per the Petroleum Planning and Analysis Cell. This indicates supply-side tightening, which directly constrains market expansion and increases reliance on imports.
India’s natural gas demand is projected to reach ~297 MMSCMD by 2030, growing at ~8% annually, according to the Petroleum and Natural Gas Regulatory Board. This reflects strong structural demand growth, creating long-term volume visibility across infrastructure, LNG, and downstream segments.
As of December 2025, there is a supply chain balance between domestic and imported natural gas, with total availability of gas calculated to be 5,703 MMSCM (Petroleum Planning and Analysis Cell - PPAC). This total includes LNG imports, which provide a large portion of the supply and where regasification was estimated to have occurred at a rate greater than 2,900 MMSCM, indicating the level of import dependence to satisfy demand. The integration of national pipeline networks will facilitate increasing inter-regional electricity flow and efficiency of utilisation.
The impact of the United States is evident in India’s initial LNG sourcing mix, which had an increasing number of Henry Hub-linked contracts in addition to oil-indexed contracts, offering the ability for operational flexibility during procurement and more exposure to variable pricing. Procurement through alternative suppliers and routes is underway to offset this disruption. Gas companies have also secured LNG cargoes from new sources.
Regulation | Impact on Market |
Unified Natural Gas Pipeline Tariff (PNGRB, 2026) | Reduces regional price disparity, improves network utilization, and enhances nationwide gas market integration. |
Natural Gas Pipeline Access Code Regulations (PNGRB, 2025) | Enables non-discriminatory third-party access, improving transmission efficiency and boosting market liquidity. |
CGD Authorisation Expansion Framework (PNGRB, 2025) | Accelerates city gas rollout, expanding demand base and strengthening downstream consumption growth. |
January 2026: Oil and Natural Gas Corporation Limited has signed a long-term charter agreement with Mitsui O.S.K. Lines for two large-scale liquefied ethane carriers, supporting the development of the world’s largest ethane transport fleet. This collaboration strengthens India’s petrochemical-linked gas value chain, ensuring dedicated ethane logistics capacity, improving feedstock security for downstream chemical production, and enhancing integration between offshore gas processing and industrial demand centres.
April 2026: GAIL (India) Limited signed a long-term charter agreement with Alpha Gas for an LNG carrier, strengthening dedicated LNG shipping capacity for India’s import supply chain. This improves cargo scheduling flexibility, ensures more stable LNG availability at regasification terminals, and reduces exposure to spot shipping constraints across Asian LNG trade routes, where demand balancing between importing countries is becoming increasingly competitive.
In India, natural gas production is still primarily located onshore, but there are several offshore fields in the western region of the country that account for a significant portion of that production, according to the Directorate General of Hydrocarbons (DGH). Most production is from vertical drilling due to the existing field structure from previous years; however, there has been an increasing trend in horizontal drilling for optimization of production from reservoirs, as well as enhancing recovery. While hydraulic fracturing has made some progress, it is still limited to specific basins and although there is government support for expanding the policy on hydraulic fracturing throughout India’s gas production regions, it has not yet been scaled commercially.
There are two different frameworks for technically and administratively managing onshore versus offshore natural gas production within the Indian upstream natural gas industry. First, onshore and offshore are indicated by different geographic locations; however, the governance and production characteristics of the resources are substantially different, as onshore is administered through the Ministry of Petroleum and Natural Gas (MoPNG) and monitored by the DGH based upon performance of each field, while offshore falls under the jurisdiction of the MoPNG, but is managed in accordance with centrally prepared production plans and requires the use of sophisticated monitoring systems to govern the performance of each field.
Sector allocations of natural gas consumption according to application type are regulated through the MoPNG and tracked through the Petroleum Planning and Analysis Cell (PPAC) for each sector. Due to the ongoing U.S.-Iran war, the Government issued a Natural Gas Control Order on 9 March 2026 under the Essential Commodities Act to manage gas supplies and protect priority sectors. Domestic PNG supply and CNG for vehicles will receive 100 per cent supply with no cuts.
GAIL (India) Limited
Oil and Natural Gas Corporation Limited (ONGC)
Petronet LNG Limited
Indian Oil Corporation Limited
Bharat Petroleum Corporation Limited (BPCL)
Adani Total Gas Limited
Oil India Limited
Reliance Industries Limited
Indraprastha Gas Limited
Mahanagar Gas Limited
GAIL has expanded its LNG logistics capability through a 2026 long-term charter agreement for a 174,000 cubic meter LNG vessel (“Energy Fidelity”), as disclosed on its official website. This strengthens upstream-to-terminal integration, allowing tighter control over LNG transportation and delivery scheduling, which improves supply reliability and reduces exposure to spot freight volatility in India’s gas import chain.
ONGC continues to scale domestic gas production through KG-DWN-98/2 deepwater development, with official updates confirming ramp-up toward 15 MMSCMD peak output. This offshore project enhances domestic supply availability and reduces import dependence, particularly by stabilising output from high-productivity basins, directly influencing India’s upstream production profile and long-term gas balance.
Petronet LNG is advancing capacity utilisation and infrastructure efficiency at its Dahej terminal, operating at over 100% capacity utilisation levels as per official disclosures. The company is also progressing expansion plans to 22.5 MMTPA, strengthening regasification throughput, which directly improves LNG handling capacity and supports higher gas availability for downstream sectors across India.
After the Iran-Hormuz disruption, India's natural gas market has been facing increasing volatility with respect to imports of liquefied natural gas (LNG) due to limited supply options available in Asia, as well as increased price sensitivity for both existing and new spot cargoes. While the level of demand for natural gas in India has remained fairly stable, with shipping and insurance costs being included in contract negotiations, both short-term planning and contract structuring have changed significantly.
| Report Metric | Details |
|---|---|
| Forecast Unit | USD Billion |
| Growth Rate | Ask for a sample |
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Segmentation | Method, Location, Application |
| Companies |
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