India’s Power Demand to Triple by 2035, Driven by EVs, Industry, and AI, Says Report

India is poised for a major leap in electricity consumption, with total power demand expected to triple over the next decade. According to the latest report titled 'Watt’s The Future: India’s 4 Trillion Unit Electricity Consumption by 2035' by Omniscience Capital, the country’s electricity usage is projected to soar from approximately 1,400 TWh in 2023 to 4,041 TWh by 2035.

This represents a compound annual growth rate (CAGR) of 9.2 percent, fuelled by rapid urbanisation, economic expansion, growing digital infrastructure, and initiatives like 'Make in India.'

As per report, per capita electricity consumption is also set to rise, nearly doubling from around 1,400 kWh in 2024 to 2,576 kWh by 2035. Despite this surge, India will still lag behind global averages, such as China’s 5,500 kWh and the United States’ 12,000 kWh, indicating substantial room for further growth in personal energy use.

Sector-wise, industry is expected to dominate electricity consumption by 2035, reaching 1,650 TWh and accounting for 41 percent of total demand. Residential usage will contribute 1,098 TWh, or 27 percent, while commercial and other segments will consume 798 TWh, equivalent to 20 percent. Agriculture and transport are forecasted to use 333 TWh (8 percent) and 162 TWh (4 percent), respectively. The transport sector is predicted to be the fastest-growing, with a CAGR of 16.8 percent, propelled by the expanding electric vehicle (EV) ecosystem, followed closely by the commercial sector at 13.2 percent.

A powerful trio, EVs, data centers, and the Indian Railways, is set to drive a significant chunk of future power demand. Together, these three sectors are projected to consume nearly 500 TWh, accounting for roughly 12 to 13 percent of the nation’s electricity by 2035. EVs alone are expected to require 159 TWh, thanks to deep market penetration across two-wheelers (60 percent), three-wheelers (70 percent), and four-wheelers (30 percent). Data centers, buoyed by artificial intelligence, 5G, and cloud computing, will likely account for 300 TWh, backed by an installed capacity of 34 gigawatts. Meanwhile, the ongoing electrification of Indian Railways is projected to add 50 to 60 TWh to the national load.

Industrial consumption is set to surpass India’s entire 2023 electricity usage by itself, even as it becomes more energy efficient. The sector’s electricity intensity is projected to decline from 2,451 terajoules per billion United States dollars of gross domestic product (GDP) to 2,200 terajoules by 2035, on par with China’s energy productivity standards. Residential electricity consumption is also set to climb, with average per capita use increasing from 255 kWh in 2022 to 700 kWh in 2035, driven by rising incomes, urban migration, and increased appliance usage.

The transport sector’s expansion is largely attributed to growing EV adoption and the rollout of charging infrastructure, making it the fastest-growing user of electricity across all sectors. At the same time, commercial energy use, driven by healthcare, retail, hospitality, and office space, will expand rapidly due to the rise of Tier 2 and Tier 3 cities, along with ongoing smart city initiatives.

Although agricultural consumption is expected to increase to 333 TWh, efficiency improvements will lower the sector’s electricity intensity from 1,520 terajoules to 1,200 terajoules per billion United States dollars of GDP. The combined share of industrial and residential sectors is expected to hold steady at between 64 and 69 percent of total consumption, aligning with global averages.

From an investment standpoint, India’s power sector presents a thriving landscape, with more than 230 companies active across ten segments of the electricity value chain, including generation, transmission, renewables, EVs, and infrastructure. As of June 2025, the total market capitalization of these companies stood at INR 74.4 lakh crore. The renewables sector is projected to post the highest growth, with a forward CAGR of 26.5 percent, followed by power infrastructure at 20.3 percent. Both EV-related and commercial infrastructure sectors offer particularly attractive opportunities for investors seeking long-term gains.

To support this growth, India will need to invest between INR 60 lakh crore and INR 65 lakh crore by 2035 to expand its generation capacity, transmission infrastructure, and grid modernization. Policy alignment will also be crucial, particularly with national goals targeting 500 gigawatts of renewable energy, net-zero emissions, and a countrywide EV charging network. With this trajectory, India is on course to become the third-largest electricity consumer in the world. Its data center capacity alone is projected to represent 7.7 percent of global installed capacity, underscoring the country’s rise as both a digital and energy superpower.

The report wraps up with a preview of its upcoming edition, which will delve deeper into the capital investment roadmap required to meet India’s 4,000 TWh electricity target. It will also explore the essential role of private capital and policy support in achieving sustainable, high-speed power growth.

Finally, Omniscience Capital notes that the projections outlined in the report are illustrative and subject to market risk. While the firm is registered with the Securities and Exchange Board of India (SEBI), these estimates are not investment guarantees. Sectoral valuations were calculated using median forward price-to-earnings ratios, with renewables averaging 27 times and EV-focused companies at around 28 times.