India’s Rising Oil Demand and the Long Road to Energy Transition

India’s Rising Oil Demand and the Long Road to Energy Transition

On a warm evening in Delhi, as traffic inches forward in a familiar symphony of honking cars and revving motorbikes, it’s hard not to notice how energy pulses through daily life. India, a nation on the move—quite literally—is shaping the future of global energy demand. According to the latest outlook from the International Energy Agency (IEA), India is set to become the world’s largest contributor to oil-demand growth by 2035.

At first glance, this seems like a paradox. After all, this same India is also rapidly emerging as a clean-energy powerhouse, with more than half of its upcoming power-capacity additions expected to come from non-fossil fuel sources. How can both these realities be true at once?

The answer lies in the complexity of an economy undergoing one of the largest development transformations in human history.

A Nation Fuelled by Growth

India’s economy is expanding, its middle class is growing, and urbanisation is accelerating. Millions of people are buying their first vehicles, industries are scaling up production, and demand for transportation—from buses and trucks to air travel—is surging.

Oil, with its unique role in mobility and petrochemicals, continues to meet needs that renewables cannot easily replace in the short term. Even with the rise of electric vehicles, the sheer scale of demand keeps the country thirsty for crude. The IEA’s projection isn’t a sign of climate apathy—it’s a sign of a nation moving full-speed toward prosperity.

The Quiet Revolution: Clean Energy Rising

But while oil demand climbs, another revolution is unfolding—one that hums quietly from solar parks in Rajasthan and offshore wind farms in Gujarat.

India has become one of the world’s fastest-growing renewable energy markets. Solar tariffs are plunging, rooftop installations are becoming mainstream, and green hydrogen has made its way from policy papers to pilot plants. The government’s goal of reaching 500 GW of non-fossil fuel capacity by 2030 is ambitious, but India is showing the world that rapid economic growth need not be chained entirely to fossil fuels.

This duality is not a contradiction—it’s a transition in motion.

Why the Transition Isn’t Straightforward

Energy transitions are rarely linear. For a country of 1.4 billion, the challenge isn’t choosing between growth and sustainability—it’s doing both at once.

• Transport electrification will take time, especially for heavy-duty vehicles.

• Industrial energy use still relies heavily on fossil fuels.

• Affordability and energy security remain major drivers of policy decisions.

• Infrastructure upgrades, from EV charging networks to grid modernization, require time and investment.

Oil demand will keep rising until cleaner alternatives become affordable and scalable enough to replace it across sectors.

Walking the Tightrope

India finds itself on a tightrope: balancing the energy needs of a booming economy with the global imperative for climate action. It must ensure energy security without slowing down development. And all of this must happen while climate risks—from heat waves to erratic monsoons—grow more severe.

Yet the signs of transformation are unmistakable. The country that once relied almost exclusively on coal-powered electricity is now one of the world’s most dynamic renewable energy markets. The nation known for oil dependency is leading investments in clean-tech innovation and sustainable mobility.

The Road Ahead

The IEA’s outlook doesn’t portray a dilemma—it reflects a journey. India’s rising oil demand represents its growth story; its clean-energy ascent showcases its future vision.

Both realities can coexist because transitions are never about abrupt switches—they’re about gradual shifts, overlapping systems, and evolving priorities.

As India marches toward 2035, the world will watch closely. Not because India is choosing oil or clean energy, but because it is trying to rewrite the playbook on how a developing economy can pursue prosperity and sustainability at the same time.

And if India succeeds, it won’t just change its own energy story—it could change the world’s.