India power sector poised for 5% to 6% annual growth
India's power sector is gearing up for solid 5% to 6% yearly growth over the next few years, thanks to rising demand from electrification, cooling needs (think more air conditioners!), data centers, and expanding manufacturing.
The country is also investing big in both traditional and renewable energy sources, as well as ramping up its grid and storage systems.
Plus, there's a new focus on making the system more reliable and flexible, not just bigger.
Citi projects 2.3-2.5x generation capacity FY26-32
According to Citi Research, India will add 2.3 to 2.5 times more power generation capacity between FY2026 and FY2032 compared to recent years, mainly to keep up with changing energy use patterns and make sure there's enough electricity even when solar isn't available.
With El Nino expected in 2026, demand for things like agricultural pumps and cooling systems could spike too.
Progress on reforms within the draft National Electricity Policy 2026 is expected to provide additional support to demand.