India will be main driver of rising demand for energy in the next two decades

India will be the main driver of rising demand for energy over the next two decades, accounting for 25 per cent of global growth and is set to overtake the European Union as the world's third-biggest energy consumer by 2030, the International Energy Agency (IEA) has said in a report.

India's energy consumption is expected to nearly double as the nation's gross domestic product expands to an estimated $8.6 trillion by 2040 under its current national policy scenario, the IEA said in its India Energy Outlook 2021 released on Tuesday.

"This is underpinned by a rate of GDP growth that adds the equivalent of another Japan to the world economy by 2040," said the IEA, the energy agency and policy adviser for members of the Organisation for Economic Co-operation and Development.

India's growing energy needs will make it more reliant on fossil fuel imports as its domestic oil and gas production has been stagnant for years despite government policies to promote petroleum exploration and production and renewable energy.

India's oil demand is expected to rise to 8.7 million barrels per day (bpd) in 2040 from about 5 million bpd in 2019, the IEA said, while its refining capacity will reach 6.4 million bpd by 2030 and 7.7 million bpd by 2040, from 5 million bpd.

It will be the world's third-biggest energy consumer, behind China and the United States, by 2030. India, the world's second-biggest net oil importer, behind China, currently imports about 76 per cent of its crude oil needs. That reliance on overseas oil is expected to rise to 90 per cent by 2030 and 92 per cent by 2040, the IEA added.