Electricity is the backbone of modern economic activity, enabling industrial production, digital infrastructure, transportation, and essential public services. Growth in electricity consumption will be a key driver in attaining the vision of Viksit Bharat and positioning India as a global power. Over period of past four years, the industrial consumption has increased from 320 BU (FY 21) to about 418 BU (FY 25), registering a CAGR of around 7 % over the period.

As India aspires to become a developed nation, rising electricity demand reflects expanding economic output, higher productivity, and improved living standards across urban and rural areas. Government initiatives such as Revamped Distribution Sector Scheme (RDSS) have played an important role by strengthening distribution infrastructure and enhancing supply reliability, thereby helping in meeting rising industrial demand and supporting sustained growth in industrial electricity consumption

Industrial growth, particularly in manufacturing, steel, cement, electronics, and emerging sectors such as electric mobility and green hydrogen, is heavily dependent on reliable and affordable power. Increased electricity consumption will support the government’s push for initiatives like Make in India and Atmanirbhar Bharat, helping India become a global manufacturing hub. A robust power sector ensures competitiveness, attracts foreign investment, and integrates India more strongly into global value chains.

Industrial consumption growth showed a CAGR of 5% ( From 380 BU in FY 23 to 418 BU in FY 25). On the other hand, the Commercial consumers showed a CAGR of 10% in the same period ( 116 BU in FY 23 to 140 BU in FY 25). Indicating sustained demand from the services and manufacturing sector.

A strong monsoon season, marked by record rainfall across several regions of India, temporarily affected demand in certain consumer goods segments. However, with the rollout of GST 2.0 reforms, the economy is poised for a resurgence, driving robust growth in targeted sectors. Backed by a powerful trifecta—progressive policy measures, rising consumer aspirations, and a well-established ecosystem for energy transition—the industry is well-positioned to deliver on the evolving needs and ambitions of the nation.

To enhance the competitiveness of Indian manufacturing, it is critical that industrial consumers have access to affordable electricity. Alongside their own carbon reduction goals, these consumers now have the flexibility to procure power through open access, enabling them to source electricity as per their operational needs. With a strong policy push and the introduction of Green Open Access, the market has witnessed a significant surge in such transactions. In FY25, open access consumption increased from 32.5 BU to 43.2 BU, registering a growth of over 32.8% year-on-year, signaling a clear shift in industry preferences. This trend reflects the growing maturity of India’s electricity market and underscores the need for robust regulatory frameworks to sustain this transition. The momentum continues in FY26, with H1 consumption reaching 27,892 MUs, compared to 19,206 MUs in the same period of FY25, reflecting a 45.2% increase in open access consumption. This indicates that while traditional DISCOM-supplied industrial demand faced headwinds, industries are increasingly leveraging open access to maintain operational efficiency and cost competitiveness.

Captive electricity consumption serves as a key indicator of the growing self-reliance of industrial consumers in meeting their energy needs. In FY25, commercial and industrial users consumed 196 billion units (BU) of captive power, up from 176 BU in FY23. This reflects a strong 6% CAGR, underscoring the sustained and rising demand for electricity within these segments.

Domestic consumption growth accelerated from 4.8% in FY24 (increasing from 3,52,742 MUs to 3,69,853 MUs) to 9.8% in FY25 (rising from 3,69,853 MUs to 4,06,136 MUs). This sharp rise is driven by urbanization, increased household electrification, and higher appliance penetration. States like UP, Haryana, Rajasthan, Punjab, WB, Bihar, and Delhi contributed significantly to this growth, highlighting improved living standards and reliable power supply.

Growth in electricity consumption aligned with renewable energy expansion will support sustainable development and global leadership in climate action. India’s focus on solar, wind, and storage technologies can meet rising demand while reducing carbon intensity. By building a resilient, green, and inclusive power sector, electricity consumption growth will not only fuel economic prosperity but also help India emerge as a responsible global power, realizing the vision of Viksit Bharat.

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NR/AP