India’s power demand to grow by as much as 5% in medium term

However, this will be slower than the growth over FY 2022 to FY2024.

The power demand in India is projected to grow by 4% to 5% over the medium term, Fitch Ratings said.

In an analysis, Fitch Ratings said this will be similar to the 4% growth in the fiscal year ended March 2025, but slower than the 8% expansion over fiscal year (FY) 2022 to FY 2024.

“The slowdown in power demand growth in FY 2025 was sharper than we had expected, partly reflecting slower GDP growth, which we estimate averaged 6.2%, compared with 9.2% in FY 2024,” it said.

The economy is expected to expand 6.4% in FY 2026 and 6.3% in FY 2027, which will support steady increases in power demand.

Fitch also expects capital expenditure amongst Indian power utilities to remain high in the medium term, particularly for renewable generators. This is being supported by the government’s efforts to expand the country’s power storage and transmission capability.

“We project renewable capacity addition will remain high in FY 2026 after an increase to 30GW in FY 2025, from 18GW in FY 2024,” Fitch said.