Electricity demand rose by 5.6% YoY in the first 23 days of January 2026, as per POSOCO data, marking a recovery after contractions in earlier months. Despite this improvement, full-year demand growth for FY2026 is expected to remain modest at 1.5–2%. However, growth is projected to rebound to around 5% in FY2027, trailing expected real GDP growth of 6.0–7.0%.

• Demand growth increased to 5.6% YoY in January 2026 as per provisional data from the Power System Operation Corporation (POSOCO): India’s electricity demand growth has been weak in FY2026 YTD, impacted by early and prolonged monsoon conditions and a high base effect. However, demand growth improved to 5.6% on a YoY basis in the first 23 days of January 2026, as per data from POSOCO, led by a recovery during the winter season. Reflecting the growth trend in FY2026 YTD, full-year growth for FY2026 is expected to remain in line with ICRA’s growth forecast of 1.5-2.0%. However, demand growth is expected to rebound to around 5% in FY2027, supported by expectations of normalised weather conditions, a lower base, and continued momentum in industrial and commercial activity.
• Spot power tariffs on the Indian Energy Exchange (IEX) averaged Rs. 4.4 per unit as of January 12, 2026, higher than Rs. 3.9 per unit in December 2025. Prices were similar to January 2025 level of Rs. 4.4 per unit as the demand growth rebounded in January 2026. However, spot tariffs declined during May–November 2025 due to an improved supply position and low demand growth.

Exhibit 1: Electricity demand grew by 5.6% YoY in first 23 days of January 2026

Source: ICRA Research, Central Electricity Authority (CEA), POSOCO; Data for January 2026 is estimated