Despite the anticipated recovery, electricity demand growth remains below India’s GDP forecast of 6.5 per cent for FY2026.
India’s electricity demand is expected to grow steadily in FY2026, with ratings agency ICRA projecting a full-year increase of around 4.5 per cent. This follows a subdued first half, where demand rose just 1 per cent due to an early monsoon and an unfavourable base.
However, a strong recovery is anticipated in the second half, driven by stabilising weather patterns and resilient economic activity.
“The rebound in H2 should offset the weakness seen earlier in the year,” said Ankit Jain, Vice President & Co-Group Head, Corporate Ratings, ICRA.
Despite the recovery, the projected demand growth trails India’s GDP forecast of 6.5 per cent for the fiscal. Volatility remains a concern, with Grid Controller of India Ltd (formerly POSOCO) reporting a 5 per cent YoY decline in demand during the first 20 days of October 2025.
On the supply side, coal inventories remain comfortable, with 14.7 days of stock as of October 10, an improvement over previous years.
Meanwhile, renewable energy generation surged 24.8 per cent YoY during April-August 2025, buoyed by a robust project pipeline and sustained policy support from the centre.