The fourth largest energy consumer after the United States, China, and Russia, India was the 10th largest economy in the world in 2011 growing at an annual rate of approximately 7 percent since 2000, according to the US Energy Information Administration (EIA).
In the International Energy Outlook 2011, EIA projects India and China to account for the biggest share of Asian energy demand growth through 2035.
Risks to economic growth in India include high debt levels, infrastructure deficiencies, and political polarization between the country's two largest political parties, it says.
Noting that India's energy policy above all focuses on securing energy sources to meet the needs of its growing economy, IEA said
while primary energy consumption in India has more than doubled between 1990 and 2011, its per capita energy consumption remains lower than that of developed countries.
Given that the service industry accounts for more than half of India's output, further economic growth could remain relatively non-energy intense, it said.
IEA said the government may not be able to deliver secure supplies to meet demand because of fuel subsidies, increasing import dependency, and inconsistent energy sector reform.
Despite having large coal reserves and a healthy growth in natural gas production over the past two decades, India remains very dependent on imported crude oil, it said.
Referring to Indian petroleum ministry's plans to make India energy independent by 2030, the report noted India's largest energy source is coal, followed by petroleum and traditional biomass (eg, burning firewood and waste).
Since the beginning of the New Economic Policy in 1991, India's population increasingly has moved to cities, and urban households have shifted away from traditional biomass to other energy sources.
The industrial sector is the largest energy consumer, representing over 40 percent of India's total primary energy demand in 2009, and is mostly fuelled by traditional biomass, according to the IEA.
The power sector is the fastest growing area of energy demand, increasing from 23 percent to 38 percent of total energy consumption between 1990 and 2009, it said
A 2012 report by the IEA estimated that nearly 25 percent of the population lacks basic access to electricity, while electrified areas suffer from rolling electricity blackouts.
The government seeks to balance the need for electricity with environmental concerns from the use of coal and other energy sources used to produce that electricity, it said.