India CNG Market

India CNG Market Analysis

The India CNG Market size is estimated at 7.57 Thousand kilotons in 2025, and is expected to reach 17.5 Thousand kilotons by 2030, at a CAGR of 18.24% during the forecast period (2025-2030).

• Over the medium period, factors such as supportive government policies and subsidies provided by the government and individuals are shifting towards CNG as a transportation fuel to reduce the emission of harmful gases. Therefore this ever-increasing awareness is expected to drive the market.
• On the flip side, the rising adoption of electric vechiles is anticipated to restrain the India CNG market during the forecast period.
• Nevertheless, he government plans to invest in bio CNG plants in the next few years is expected to create immense opportunities for the CNG market in the near future.

India CNG Market Trends

3-Wheelers Segment to Witness Significant Growth

• In India, CNG-powered three-wheelers have matured, with many auto-rickshaws and goods carriers either factory-fitted or retrofitted with CNG engines. This is largely due to cost savings for drivers, who enjoy lower fuel prices than petrol or diesel. A strong retrofitting ecosystem and a growing network of CNG refueling stations in major cities bolster the market.
• Registrations of CNG three-wheelers have consistently risen. For instance, data from VAHAN, under the Ministry of Road Transport & Highways (MoRTH), shows that as of December 26th, 2024, registrations hit 345,812 units, marking a 2.2% increase from 338,260 units in 2023. This upward trend is anticipated to persist.
• Regulatory frameworks in major cities have mandated the shift from diesel to CNG for auto-rickshaw fleets, aligning with air quality standards. CNG's cost-effectiveness boosts profitability for drivers, especially those with tight margins. Additionally, government programs and subsidies have made CNG retrofitting more accessible.
• In 2022, the Commission for Air Quality Management (CAQM) introduced a Delhi-NCR policy to combat air pollution. Diesel auto-rickshaws must be phased out across the NCR by December 31, 2026, encompassing Delhi and parts of Haryana, Uttar Pradesh, and Rajasthan.
• From January 1, 2023, only CNG and electric autos can be registered in these states. Notably, Delhi began transitioning its diesel auto fleet to CNG in 1998 and currently has no registered diesel autos.
• In a move to uplift women, the Tamil Nadu government, via its Social Welfare Department, announced in October 2024 a subsidy of USD 1,156 for 250 CNG/Hybrid autos in Chennai. This initiative aims to provide sustainable livelihoods and promote economic independence by targeting women, especially maids and those in need. Such measures are poised to amplify the demand for CNG in India.
• HMIL's push into the CNG market aligns it with competitors like Maruti Suzuki India and Tata Motors, who are amplifying their CNG model sales. Maruti Suzuki has set an ambitious target of 6 lakh CNG vehicle sales for FY25, up from 4.89 lakh in FY24. Meanwhile, Tata Motors has seen its CNG vehicle penetration in the passenger segment rise to 21% in the fiscal first half, up from 16% in FY24. Such moves signal a bullish outlook on CNG demand in the years ahead.
• However, challenges appear for the segment. These include a sparse refueling infrastructure outside major urban hubs, steep upfront costs for factory-fitted CNG vehicles, and consumer apprehensions regarding performance, especially engine power and acceleration. The absence of long-range CNG variants also limits their appeal to intercity commuters.
• Despite these hurdles, the expanding CNG refueling network and heightened consumer awareness bode well for the market's growth. Advances in CNG engine technology and hybrid solutions promise to mitigate current performance concerns, further broadening the appeal of CNG-powered vehicles.

Growth of CNG as a Transportation Fuel Expected to Drive the Market

• India, with its fast-growing population and expanding urbanization, is leading the charge in embracing compressed natural gas (CNG) as a viable alternative to conventional fuels like petrol and diesel.
• The Indian automotive market has experienced robust growth in CNG vehicle sales over recent years: In the financial year 2023, nearly 318,750 passenger vehicles and 241,230 three-wheelers powered by CNG were sold. Between January and June 2024, the retail sales of CNG-powered vehicles surged to 552,070 units, marking a 33% year-on-year (YoY) growth compared to H1 2023.
• Passenger vehicles (cars, SUVs, and MPVs) led the market, with 242,289 units sold—a significant 49% YoY increase — accounting for 44% of total CNG sales. Three-wheelers witnessed an 11% YoY increase to 173,480 units, representing 31% of the market. The goods carrier segment (light, medium, and heavy vehicles) sold 43,889 units, growing 8% YoY. Buses and vans saw remarkable growth, with 90,308 units sold in H1 2024, a 71% YoY increase.
• Further, CNG’s affordability is a major driver for its adoption. It is significantly cheaper than petrol and diesel, reducing the operational costs of passenger and commercial vehicles. Increased reliance on CNG reduces India’s dependency on costly oil imports, enhancing national energy security.
• For instance, in April 2023, the Cabinet Committee on Economic Affairs approved a new domestic natural gas pricing plan, reducing CNG costs by approximately 10% on average across the country.
• Moreover, the distribution of CNG stations has traditionally been concentrated in western and northern states such as Gujarat, Maharashtra, Uttar Pradesh, and Delhi NCR.
• However, initiatives like the Minimum Work Programme (MWP) aim to expand the network to underserved regions. For instance, in 2024, Karnataka established 412 new CNG stations, with plans for 1,414 additional stations by 2030.
• The adoption of CNG as a transportation fuel is not just a solution to environmental challenges but a driving force behind the dynamic growth of India’s CNG market. With surging vehicle sales, expanding infrastructure, and robust policy support, CNG is reshaping the country’s transportation sector.

India CNG Industry Overview

India CNG market is semi-consolidated. Some of the key players in the market (in no particular order) include Indraprastha Gas Limited, Bharat Petroleum Corporation Limited, Mahanagar Gas Limited, Adani Total Gas Limited, and Hindustan Petroleum Corporation Limited.

India CNG Market Leaders

India CNG Market News

• November 2024: Hyundai Motor India Ltd announced that its CNG variants, available in the Grand i10 NIOS, AURA, and EXTER models, have seen a notable uptick in domestic sales. The share of CNG models in the company's domestic sales rose to 11.4% in FY24, a significant jump from 9.1% in FY22. The automaker is making a substantial bet on the CNG fuel option, with rising demand for its CNG-equipped models in both rural and urban markets across the country. Hyundai attributes this growth to the expanding CNG infrastructure and its innovative 'Hy-CNG Duo' technology, which boasts enhanced boot space and improved fuel efficiency.
• June 2024: Confidence Petroleum India Limited (CPIL) marked a pivotal moment in its clean energy journey by inaugurating five new Compressed Natural Gas (CNG) stations in Bengaluru. Teaming up with GAIL (India) Limited, CPIL's expansion highlights its dedication to a greener Bengaluru and boosts the city's clean fuel accessibility. This move is poised to play a crucial role in curbing vehicular emissions, aligning with Bengaluru's eco-friendlier future vision.