Page 26 - Policy Economic Report - Jan 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

At the end of Q4 2025, the country’s installed conventional power capacity stood at 255.7 GW, accounting
for 49.8% of the total installed power capacity, up from 253.6 GW in the previous quarter. India’s installed
conventional power capacity at the end of Q4 2024 was 252.6 GW, accounting for 54.7% to the overall
power mix capacity.

Electricity generation from conventional sources continues to be led by coal, which accounts for 42.7% of
the power mix, followed by gas at 3.9%, nuclear at 1.7%, lignite at 1.3%, and diesel at 0.11%. During the
quarter, the overall share of conventional power capacity in the total installed mix declined as renewable
capacity additions came.

However, despite the lower capacity share, electricity generation from conventional sources, mainly coal,
increased during the quarter, helping meet rising demand and ensuring grid reliability. While conventional
power continues to hold a significant share of the total installed capacity, its decline reflects the rapid
expansion of renewable energy across the country.

8. Goldman Sachs upgrades India's 2026 GDP growth to 6.9% after US cuts tariffs

Goldman Sachs has flagged a positive macroeconomic outlook for India following the conclusion of the
US-India trade deal that lowers American reciprocal tariffs on Indian goods to 18%. It cited that the
conclusion of the deal would reduce trade-policy uncertainty and improve private investment intentions,
while adding that there could be further upside to real GDP growth from a recovery in private capex in
the latter half of CY26.

From an external balance perspective, the agency highlighted that with the 'reciprocal' tariffs on India's
exports to the US now lowered, current account deficit is estimated to narrow by around 0.25% of GDP in
CY26 to 0.8% of GDP.

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