India is forecast to remain the world’s fastest growing major economy through 2024, with GDP growth over 6% annually. This rapid growth resembles China’s economic ascent between the late 1990s and early 2000s, suggesting India could see similar massive rises in energy use over the next 20 years as urbanization and industrialization accelerate.
India is entering the central take-off portion of the S-curve when urbanization, industrialization, household incomes and energy consumption increase most rapidly, usually for several decades at a time, notes John Kemp, Market Analyst at Reuters.
India’s $7,100 GDP per capita, 27.9 median age, 1.1% annual population growth, 35% urbanization rate, and 26 Gigajoules per capita energy consumption have reached similar levels to China around 1998-2001. Sadly, India’s urban air pollution also mirrors 1990s/2000s China. These metrics indicate India is entering the takeoff phase of development typically lasting decades, where incomes, energy demand, and emissions balloon.
India’s potential remains enormous given incomes are still half China’s and a sixth of the Organisation for Economic Co-operation and Development levels. Provided it avoids policy mistakes, India should remain the fastest growing economy for 10-20 years and be a primary global growth engine through the 2030s.
Rising incomes will spur India’s middle class to demand much more power for lighting, appliances, heating and cooling as well as more mobility. India’s per capita energy use is just a quarter of China’s, highlighting the potential growth ahead as the gap closes.
India will follow its own unique development path but, like China, its urbanization and industrialization will likely massively elevate energy demand, fossil fuel use, and emissions for structural reasons over an extended period. While differing from every prior country, surging incomes historically drive greater energy appetite.
With the U.S., China, and Europe, India will be one of the four pivotal nations shaping global energy and emission projections through mid-century given its enormous growth. While specifics remain uncertain, China’s progression signals India’s broad trajectory.