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India Positions Itself as a Value-Driven Flexible Buyer in Global LNG Markets: S&P Global

India is increasingly adopting a value-focused approach in the global liquefied natural gas (LNG) market, operating as a flexible buyer that enters spot and short-term markets only when prices align with domestic fuel alternatives. This strategy, coupled with rapid progress in biofuels adoption, is shaping the next phase of India’s energy transition, according to discussions held on Day 2 of India Energy Week (IEW) 2026 in Goa.

Industry experts highlighted that India’s evolving energy framework is anchored in disciplined price discovery and pragmatic transition pathways. As global LNG supply expands, the country is selectively sourcing cargoes based on transparent international benchmarks while simultaneously scaling ethanol and sustainable aviation fuel (SAF) to support transport decarbonisation goals.

These developments align with the IEW 2026 theme, “Energising Growth, Securing Economies, Enriching Lives,” reflecting India’s efforts to balance affordability, energy security, flexibility, and long-term emissions reduction amid a volatile global energy environment.

Kenneth Foo, Global Director – LNG Price Reporting at S&P Global Energy, noted that India’s LNG imports stood at just under 26 million tonnes per annum (mtpa) in 2025, with an additional 3.5–4 mtpa of long-term contracted supply expected to commence deliveries from 2026. He explained that the rise in term contracts will reduce India’s reliance on spot LNG, particularly if prices remain uncompetitive compared to alternatives such as propane, naphtha, and fuel oil.

Foo added that while early-2026 pricing briefly made LNG cost-competitive—resulting in incremental demand—the opportunity has narrowed, underscoring India’s sensitivity to price movements. Weak pricing for both the Japan-Korea Marker (JKM) and the West India Marker (WIM), the lowest since 2021, is also encouraging the adoption of floating-price LNG contracts.

WIM, listed on the India Gas Exchange (IGX), has already supported physical transactions and is emerging as a key reference price for LNG and regasified LNG (RLNG) deals in India. According to Foo, uncontracted LNG volumes are increasingly likely to be linked to WIM, with broader contractual adoption expected over time.

Looking ahead, Foo pointed out that incremental LNG demand from refineries, city gas distribution networks, and industrial users will depend on sustained price competitiveness. Gas-based power demand during the upcoming summer months remains a critical swing factor, with stronger demand potentially lifting spot LNG imports. He also highlighted ongoing geopolitical uncertainties surrounding post-2027 Russian LNG supply, noting that India’s ability to absorb such volumes will hinge on pricing discounts, benchmark linkages, and risk considerations.

On the biofuels front, Sophie Byron, Global Director – Biofuels Price Reporting at S&P Global Energy, emphasized that India’s decarbonisation agenda is accelerating interest in Sustainable Aviation Fuel (SAF). The country has outlined SAF blending targets starting at 1% by 2027, increasing to 2% in 2028, and rising toward 5% by 2030, driving efforts to scale production through multiple technological pathways.

Currently, SAF availability in India is largely limited to co-processed volumes produced at existing refineries, primarily using the HEFA pathway and used cooking oil as feedstock. Byron noted that while policy frameworks across Asia are taking shape, factors such as cost competitiveness, feedstock availability, and regulatory clarity will ultimately determine the pace of SAF expansion.

She also highlighted that Asia’s biofuels market is entering a significant growth phase, supported by stronger gasoline blending mandates and renewed focus on domestic ethanol production. India has emerged as a key regional market, rapidly expanding ethanol capacity, diversifying feedstocks beyond sugarcane to include corn and maize, and moving closer to nationwide E20 gasoline blending. This transition implies annual ethanol demand exceeding 10 billion litres, with further growth expected.

Across Southeast Asia, countries such as Vietnam, the Philippines, and Indonesia are advancing higher ethanol blending programs, positioning the region as a structurally growing ethanol market despite ongoing feedstock and supply challenges. Beyond 2035, regional blending rates are expected to stabilise as gasoline demand reaches its peak.