The india natural gas market size was valued at 77.40 Thousand MMSCM in 2025 and estimated to grow from 81.47 Thousand MMSCM in 2026 to reach 105.28 Thousand MMSCM by 2031, at a CAGR of 5.26% during the forecast period (2026-2031). The India Natural Gas Market Report is Segment by Type (Compressed Natural Gas, Piped Natural Gas, and Liquefied Natural Gas), Source (Domestic Production - Onshore, Domestic Production - Offshore, and LNG Imports), and End-Use Sector (Fertilizer Production, City Gas Distribution, Transportation, Petrochemical Feedstock, and Others). The Market Sizes and Forecasts are Provided in Terms of Volume (MMSCM).
India Natural Gas Market Trends and Insights
Expanding City Gas Distribution Network in Tier-2 & Tier-3 Cities
Roll-outs across 307 areas aim for 12.6 crore PNG connections and 18,336 CNG stations by 2034, pushing the India natural gas market deep into smaller cities. Gujarat Gas has earmarked INR 1,200 crore to hook 3.3 lakh new homes and 200 CNG outlets in FY25 - an approach replicated by other distributors venturing beyond saturated metros. Urbanization trends, cleaner-fuel priorities, and standardized tariffs improve project viability, though low consumption density demands innovative last-mile models and long-term policy backing.Fertilizer Sector’s Shift to Gas-Based Feedstock under Nutrient-Based Subsidy Reforms
The sector drew 31% of national demand in 2024 and remains insulated from LNG price swings through direct government support. Reforms channel APM and new-well gas to fertilizer plants, incentivizing a move away from naphtha and reinforcing supply security. Stable offtake from this price-inelastic segment cushions the India natural gas market against industrial fuel-switching cycles while anchoring infrastructure utilization.Volatility in Spot LNG Prices Driving Industrial Fuel Switching
Spot LNG fluctuated from USD 2/MMBTU in early 2020 to USD 30/MMBTU in late 2021, prompting price-sensitive users to revert to fuel oil or coal whenever landed costs breach viability thresholds. Reliance on spot cargoes for roughly 25% of supply exposes the India natural gas market to exogenous shocks, especially in non-subsidized industries and peaking power plants that lack hedging mechanisms.Other drivers and restraints analyzed in the detailed report include:
- LNG Contract Restructuring Linking Prices to Emerging Domestic Gas Hub
- Interstate Pipeline Connectivity via “One Nation, One Gas Grid” Policy
- Delays in Pipeline Right-of-Way Clearances across Forest Corridors
Segment Analysis
CNG delivered 47.10% of the India natural gas market size in 2025 and is forecast for a 5.83% CAGR, versus PNG’s dominant 52.90% share but slower trajectory. Rapid station build-outs - 8,067 outlets operational by March 2025 - and supportive transport policies make CNG an accessible decarbonization lever for commercial fleets. Bajaj Auto’s launch of CNG motorcycles and forthcoming CNG scooter platforms broadens the addressable two-wheeler universe. PNG expansion remains challenged by connection cost, subsidized LPG competition, and lower rural densities, leaving 93 geographical areas without a single household hookup, which compels CGD firms to craft pay-as-you-go and community pipeline solutions.Complete Report Scope:
- By Type
- Compressed Natural Gas (CNG)
- Piped Natural Gas (PNG)
- Liquefied Natural Gas (LNG)
- By Source
- Domestic Production - Onshore
- Domestic Production - Offshore
- LNG Imports
- By End-Use Sector
- Fertilizer Production
- City Gas Distribution
- Transportation
- Petrochemical Feedstock
- Others [Industrial Manufacturing, Agriculture (Tea Plantation), IC for Pipeline System, LPG Shrinkage, Sponge Iron/Steel]
List of Companies Covered in this Report:
- Adani Total Gas Limited
- Assam Gas Company Limited
- Bharat Petroleum Corporation Limited
- Cairn Oil & Gas (Vedanta Limited)
- Essar Oil & Gas Exploration & Production Ltd.
- ExxonMobil India
- GAIL (India) Limited
- Gujarat Gas Limited
- Gujarat State Petronet Limited
- H-Energy Private Limited
- Hindustan Petroleum Corporation Limited
- Indian Oil Corporation Limited
- Indraprastha Gas Limited
- Mahanagar Gas Limited
- Oil and Natural Gas Corporation (ONGC)
- Petronet LNG Limited
- Reliance Industries Limited
- Shell Energy India Private Limited
- Torrent Gas Private Limited
- TotalEnergies SE (India Operations)
Additional Benefits:
- The market estimate (ME) sheet in Excel format
- 3 months of analyst support
Table of Contents
1 Introduction
4 Market Landscape
5 Market Size & Growth Forecasts
6 Competitive Landscape
7 Market Opportunities & Future Outlook
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- Adani Total Gas Limited
- Assam Gas Company Limited
- Bharat Petroleum Corporation Limited
- Cairn Oil & Gas (Vedanta Limited)
- Essar Oil & Gas Exploration & Production Ltd.
- ExxonMobil India
- GAIL (India) Limited
- Gujarat Gas Limited
- Gujarat State Petronet Limited
- H-Energy Private Limited
- Hindustan Petroleum Corporation Limited
- Indian Oil Corporation Limited
- Indraprastha Gas Limited
- Mahanagar Gas Limited
- Oil and Natural Gas Corporation (ONGC)
- Petronet LNG Limited
- Reliance Industries Limited
- Shell Energy India Private Limited
- Torrent Gas Private Limited
- TotalEnergies SE (India Operations)
