Why Are India’s Top Banks Taking a Breather?| The Daily Brief #215

Summary

India is facing a natural gas crisis due to a mismatch between rising demand and stagnant local production. The government is working on expanding infrastructure, but bottlenecks and an over-reliance on imports are worsening the situation, leading to shortages and prioritization of gas distribution. The country aims to boost natural gas's share in its energy mix by 2030, with CNG playing a key role. Meanwhile, India's industrial growth has slowed, and while Adani Green Energy posted significant profit increases, Apple's iPhone production expansion in India is facing challenges due to delays in importing machinery.

Takeaways

• 😀 India's natural gas supply is facing significant challenges due to a mismatch between growing demand and stagnant domestic production.
• 🚧 Infrastructure bottlenecks are making it difficult to meet rising demand for gas, especially for CNG in transport.
• ⛽ The domestic production of natural gas in India has only grown by 3% in the last decade, while demand has risen by 30%.
• 🏙️ As a result, India now only meets about half of its natural gas needs from domestic production, leading to reliance on imports.
• 🔴 The APM gas pool in India is drying up, adding pressure to the country's energy system and increasing the risk of shortages.
• 🚗 When gas is in short supply, CNG stations are typically the first to be affected, causing long queues and temporary closures.
• 🌍 Other countries in the region, such as Pakistan and Bangladesh, have also faced significant gas supply issues, including shutdowns of CNG stations.
• 📉 Despite these challenges, the Indian government plans to increase natural gas's share of the energy mix from 6.5% to 15% by 2030.
• 🌱 Renewable energy growth, exemplified by Adani Green Energy's success, continues to play a vital role in India's energy transition.
• 📱 Apple is facing challenges in expanding iPhone production in India due to delays in importing essential machinery from China, which could impact its production goals.

Q & A

What is the primary issue causing India's gas supply shortages?

The primary issue causing India's gas supply shortages is the mismatch between growing demand and limited, uncertain supply. Domestic gas production has only increased by 3% over the last decade, while demand has surged by 30%, creating a significant supply gap.

How much of India’s natural gas needs are met by local production?

India now meets only about half of its natural gas needs through local production. The other half relies on imports.

What role does APM gas play in India's energy landscape?

APM gas is crucial to India's energy needs, but its supply is dwindling. As domestic production fails to keep up with rising demand, the APM gas pool is drying up, exacerbating the supply crisis.

What impact did the pipeline issue in Pune have on gas supply?

The pipeline issue in Pune caused a city-wide CNG shortage, with more than half of the CNG stations running dry. Drivers had to wait for long hours due to the disruption.

How are shortages in gas affecting the prioritization of supply?

As gas supply becomes scarcer, the government must prioritize which sectors receive gas. Households and industries that use gas as a raw material are prioritized, while CNG for transport is often the last to be supplied during shortages.

How does the situation in India compare to Pakistan and Bangladesh regarding gas supply?

Similar to India, both Pakistan and Bangladesh have experienced major gas supply issues. In Pakistan, CNG stations were shut for extended periods, and Bangladesh had to limit CNG station hours to conserve gas.

What is the government’s long-term goal for natural gas in India’s energy mix?

The Indian government aims to increase the share of natural gas in the country’s energy mix from around 6.5% currently to 15% by 2030, with CNG expected to play a key role in this transition.

What was the industrial production growth in India for March 2025?

India's industrial production (IIP) rose by 3% in March 2025, showing a recovery from the previous month’s growth of 2.72%.

How did Adani Green Energy perform in FY 2025?

Adani Green Energy posted a 59% year-over-year rise in net profit to 2001 crore rupees in FY 2025, largely due to significant greenfield capacity additions across Gujarat, Rajasthan, and Andhra Pradesh.

What challenges is Apple facing with its iPhone production in India?

Apple is facing challenges in expanding its iPhone production in India due to delays in importing crucial machinery from China. These delays could impact the launch of the iPhone 17 and its broader production goals.