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India’s Power Demand Expected to Grow 4–4.5 % in FY26: ICRA

India’s electricity demand is projected to rise between 4 Percent and 4.5 Percent in the financial year 2025–26, according to ICRA. A rebound in the second half of the year is expected to offset the subdued growth seen earlier due to monsoon-related disruptions.

Ankit Jain, Vice President and Co-Group Head – Corporate Ratings at ICRA, stated, “After a muted 1 Percent growth in H1 FY2026 caused by an early monsoon and weak base, we expect a strong recovery in the second half. As weather conditions normalise and economic activity remains stable, full-year electricity demand growth is likely to settle at a healthy 4.0–4.5 Percent.”

The growth forecast trails India’s GDP projection of 6.5 Percent, amid recent fluctuations in energy consumption. According to provisional data from the Power System Operation Corporation, electricity demand dropped by 5 Percent year-on-year during the first 20 days of October 2025.

On the supply front, coal inventories at domestic power plants remain stable despite moderation. As of October 10, 2025, stock levels were sufficient for 14.7 days of power generation, a notable improvement over previous years. This stability highlights ongoing progress in coal supply and logistics management across the sector.