India inches closer to full IEA membership as group pledges to start talks

Ministers from member countries of the International Energy Agency pledged Feb. 14 to start discussions with India for its full membership in the organization, highlighting the South Asian nation's strategic importance in tackling global energy and climate challenges.

The announcement at the IEA ministerial meeting takes India a step closer to becoming a full-time member of the group at a time when it expects the country to be one the biggest centers of oil demand growth.

"India is the world's fastest growing major economy. Sustained growth needs energy security and sustainability," India's Prime Minister Narendra Modi said in a video address to attendees at the ministerial meeting. "Inclusivity boosts the credibility and capability for any institution. I am sure that the IEA will benefit when India plays a bigger role in it."

India first joined the IEA as an associate member in 2017.

The country is set to play an increasingly important role in tackling global energy and climate issues as its economy, population and energy use grow, ministers from the IEA's 31 member countries said in a joint communique following the 2024 Ministerial Meeting in Paris.

"India becoming an IEA member would mark a huge, consequential change in international energy governance. As the world's most populous country, India is set to play an increasingly central role in efforts to safeguard energy security, drive inclusive energy transitions and combat climate change," the IEA said.

"In the next three decades, India is poised to see the largest energy demand growth of any country in the world as industrialization and urbanization surge and per capita income rises sharply," it added.

India's strategic role

IEA executive director Fatih Birol said India plays a crucial and growing role in the global energy economy. As a result, the world cannot plan its energy future without India at the table.

"We are very happy that ministers from the IEA's member countries have agreed to start membership talks with India – this is a major milestone for international energy governance," Birol said.

US Secretary of Energy Jennifer M. Granholm said that in many ways the world's energy future would depend on India's energy future.

"Prime Minister Modi's leadership in renewable and alternative energies has already driven down prices for the rest of the world, making these options cost competitive with every other energy source. The world's oldest continuous democracy looks forward to soon welcoming the world's largest democracy into IEA membership to advance our shared climate and energy security goals," she added.

Australia is also pleased to support India's journey to become an IEA member.

"India will have the largest energy demand growth globally to 2050. We are pleased that discussions are progressing well and hope to be able to welcome India into the IEA family soon as an important voice from our region, and for our region," said Australia's Minister for Climate Change and Energy Chris Bowen.

The IEA and India have expanded their collaboration on energy and climate issues in recent years -- further deepening ties during India's G20 Presidency in 2023.

"In terms of ratio of net oil imports in relation to total oil demand, India has a dependence higher than even China. India is keen to align itself to IEA countries in terms of securing oil and other energy supplies, as well as building strategic petroleum reserves and coordinating their releases with other IEA nations," said Kang Wu, global head of oil demand research at S&P Global Commodity Insights, based in Singapore.

"A full-time membership for India will help in getting its voice heard at a key platform, as well as influence its policies," he added.

The IEA released a report titled "Indian Oil Market -- Outlook to 2030" at the recently concluded India Energy Week conference, highlighting that India's role in global oil markets will likely expand substantially over the remainder of the decade, fueled by strong growth in its economy, population and demographics -- making the country the largest source of demand growth.

Over the next seven years, India would see 1 million b/d of new refinery distillation capacity -- more than any other country in the world outside of China, the report added.