Main Content start here
Main Layout
Report Description

Report Description

Forecast Period

2027-2031

Market Size (2025)

USD 125 Million

Market Size (2031)

USD 217 Million

CAGR (2026-2031)

9.51%

Fastest Growing Segment

Construction

Largest Market

South India

Market Overview

India Gas Engine Market was valued at USD 125 Million in 2025 and is expected to reach USD 217 Million by 2031 with a CAGR of 9.51% during the forecast period.

A gas engine is an internal combustion engine that operates using gaseous fuels such as natural gas, biogas, landfill gas, or hydrogen. Unlike traditional diesel or petrol engines, gas engines ignite a mixture of gas and air using a spark plug, similar to the operation of a petrol engine. They are commonly used in applications requiring reliable and efficient power generation, including industrial plants, commercial facilities, residential complexes, and utility-scale power systems.

Gas engines are favored for their high efficiency, lower emissions, and ability to run on a variety of clean fuels. They can operate in both continuous and standby modes, making them suitable for base-load power, peak shaving, and backup power solutions. Many gas engines are also used in combined heat and power (CHP) systems, where waste heat from the engine is recovered for heating or cooling purposes, further enhancing energy efficiency.

With growing environmental concerns and the global shift toward cleaner energy, gas engines are increasingly seen as a sustainable alternative to diesel gensets. Their ability to integrate with renewable fuels like biogas and hydrogen also positions them as a key technology in the transition toward low-carbon energy systems.

Key Market Drivers

Growing Demand for Clean and Reliable Power

India's rising population, urbanization, and industrialization have significantly increased the demand for electricity. Traditional coal-based power generation, though still dominant, is under pressure due to environmental concerns and regulatory challenges. In this context, gas engines are gaining momentum as a clean and efficient alternative for decentralized power generation. These engines offer a lower carbon footprint compared to diesel and coal-based systems, making them attractive for industries, commercial establishments, and even rural electrification projects.

Gas engines are particularly valued for their ability to provide consistent and reliable power in regions where grid electricity is either unstable or unavailable. In states where power outages are frequent, industrial units and large commercial complexes rely on captive power solutions, and gas engines provide a cost-effective and environmentally sustainable option. Additionally, they can be quickly started and stopped, making them ideal for backup applications and peak load management.

The government's push toward reducing dependency on coal and promoting cleaner fuels has further boosted the demand for gas-based generation. Policies favoring natural gas distribution infrastructure and cleaner energy generation align well with the adoption of gas engines across the country. This growing preference for decentralized and clean power is a major driver shaping the Indian gas engine market. India’s electricity demand is projected to grow at an annual rate of around 5-6% over the next decade, driven by industrialization, urbanization, and rising per capita consumption.

Expansion of Natural Gas Infrastructure

A key enabler for the growth of the gas engine market in India is the rapid development of natural gas infrastructure. The Indian government, through entities like GAIL and other city gas distribution (CGD) companies, has been aggressively expanding the pipeline network across states to increase access to natural gas for industrial, commercial, and residential use. This growing infrastructure has opened up new markets for gas engines, especially in Tier 2 and Tier 3 cities where such access was previously limited.

With the Pradhan Mantri Urja Ganga project and other initiatives under the National Gas Grid, more regions are now being connected to piped natural gas (PNG), offering a steady and economical fuel supply for gas engine operation. This accessibility reduces the logistical challenges of fuel transport and storage, making gas engines more feasible for a broader customer base.

Industrial clusters and special economic zones being connected to gas pipelines are likely to adopt gas engines for captive generation due to lower fuel costs and reduced emissions. This infrastructure expansion not only strengthens fuel availability but also encourages long-term investments in gas engine solutions. The synergy between energy demand and infrastructure growth is a critical driver of the Indian gas engine market’s future. India’s natural gas pipeline network has expanded to over 18,000 kilometers, with plans to increase it to approximately 35,000 kilometers by 2025 under the National Gas Grid initiative.

Government Policies and Environmental Regulations

India’s commitment to reducing greenhouse gas emissions and transitioning to cleaner energy sources has led to the implementation of stringent environmental regulations and supportive policies. The National Action Plan on Climate Change (NAPCC), along with various state-level renewable and clean energy initiatives, promotes the adoption of cleaner technologies—including natural gas-based power generation.

Gas engines produce significantly fewer pollutants such as NOx, SOx, and particulate matter compared to diesel and coal engines. As environmental compliance becomes a growing concern for industries, especially those located in pollution-prone zones, many are switching to gas engines to meet emission norms without compromising operational efficiency.

Incentives like tax benefits, viability gap funding, and easier financing for clean energy projects further enhance the attractiveness of gas engine installations. Additionally, India's focus on promoting waste-to-energy and biogas projects under the Swachh Bharat and SATAT (Sustainable Alternative Towards Affordable Transportation) schemes has led to the increased use of bio-derived gases, which are compatible with modern gas engines.

By aligning economic incentives with environmental goals, the government has created a favorable landscape for gas engine deployment. This policy-driven push not only supports market growth but also builds long-term confidence among investors and end-users. India aims to reduce its carbon intensity by 45% by 2030 compared to 2005 levels, promoting cleaner energy solutions including gas-based power generation.


Download Free Sample Report

Key Market Challenges

Inconsistent Availability and High Cost of Natural Gas

One of the major challenges facing the gas engine market in India is the inconsistent availability and fluctuating cost of natural gas. Despite government efforts to expand the natural gas pipeline infrastructure and promote a gas-based economy, the domestic supply of natural gas remains limited. A significant portion of India's natural gas demand is met through imports in the form of Liquefied Natural Gas (LNG), which is highly sensitive to global price trends and geopolitical events.

This volatility in pricing affects the long-term operational costs of gas engines, particularly for commercial and industrial users who depend on predictable energy expenses. Imported LNG, when expensive, makes gas engines less economically viable compared to alternatives like diesel gensets or renewable energy solutions such as solar-plus-storage systems. Moreover, industries that do not have access to piped natural gas infrastructure often rely on LNG transported in cryogenic tankers, adding to logistical complexities and operational costs. Additionally, the allocation of domestic natural gas is often prioritized for sectors like fertilizer and city gas distribution (for household and transport use), which can further limit supply availability for power generation applications. This creates uncertainty for potential investors and users who may hesitate to adopt gas engine systems due to concerns over fuel supply stability and price competitiveness.

The lack of transparent and long-term gas pricing policies further complicates planning for large-scale deployments of gas engines. Without firm supply commitments or favorable pricing mechanisms, project developers may find it difficult to justify the initial investment in gas engine infrastructure. Overall, fuel supply challenges remain a critical barrier to the widespread adoption of gas engines in India.

Limited Awareness and Technical Expertise

Another significant challenge impeding the growth of the gas engine market in India is the lack of widespread awareness and technical expertise related to gas engine technology. While large industrial players and multinational corporations may have access to advanced engineering resources and global best practices, many small and medium enterprises (SMEs), which form a large part of India's industrial base, are still unfamiliar with the operational and economic benefits of gas engines.

Many potential users lack clarity on how gas engines differ from diesel engines in terms of maintenance, performance optimization, and environmental impact. This knowledge gap often leads to hesitation in adopting new technologies, particularly when upfront capital costs are involved. Additionally, there is a perception that gas engines require more specialized maintenance and skilled personnel, which discourages adoption in regions where technical support is limited.

Service infrastructure for gas engines is still developing in many parts of India, especially in rural and semi-urban areas. Unlike diesel engines, for which there is a well-established ecosystem of mechanics, parts suppliers, and service centers, gas engines often require OEM-specific support and periodic maintenance by trained technicians. This lack of support infrastructure can result in longer downtimes and higher operational risks, especially for users in remote areas.

Training programs and certified technician networks are still in their infancy for gas engines, and this limits the confidence of users in adopting the technology. The lack of accessible technical resources—such as manuals in local languages, real-time troubleshooting tools, and user education—also adds to the barrier.

To overcome this challenge, stronger efforts are needed from manufacturers, government agencies, and industry associations to promote knowledge sharing, training programs, and demonstration projects. Without improving awareness and technical readiness, the Indian gas engine market will struggle to reach its full potential, particularly beyond major urban and industrial centers.

Key Market Trends

Shift Toward Decentralized and On-site Power Generation

One of the most notable trends in the Indian gas engine market is the growing shift toward decentralized and on-site power generation. As industries and commercial facilities seek to reduce dependency on the unstable national grid and manage rising electricity costs, gas engines are emerging as a preferred solution for captive power generation. This trend is especially prominent in sectors such as manufacturing, data centers, hospitals, and commercial real estate, where power reliability is critical.

Decentralized power generation using gas engines offers several advantages. It provides operational independence, reduces transmission losses, and ensures business continuity during grid failures. Moreover, users benefit from real-time control over their energy consumption and fuel usage. Gas engines are highly scalable, making them suitable for applications ranging from small commercial complexes to large industrial plants.

Urban areas and industrial corridors are increasingly adopting on-site generation models supported by piped natural gas infrastructure. Additionally, as environmental regulations become stricter, organizations are replacing diesel gensets with cleaner gas engine alternatives to meet emission norms while maintaining self-sufficiency.

This trend is likely to grow as companies continue to prioritize resilience, cost control, and sustainability. The ability of gas engines to operate efficiently and adapt to local fuel availability supports their expanding role in decentralized energy systems across India.

Rising Adoption of Biogas and Renewable Gas Fuels

India is witnessing a growing emphasis on the use of biogas and renewable gaseous fuels in gas engines. With increasing awareness of environmental sustainability and government initiatives promoting waste-to-energy programs, more facilities are exploring the use of biogas generated from agricultural waste, sewage, and organic municipal waste.

Gas engines are well-suited for running on biogas, making them a popular choice in rural areas, farms, food processing units, and municipal waste treatment facilities. Programs like the SATAT (Sustainable Alternative Towards Affordable Transportation) scheme by the Indian government aim to promote the production and distribution of Compressed Biogas (CBG), further fueling this trend.

The appeal lies in the dual benefit of waste management and energy generation. Projects utilizing bio-waste to power gas engines not only lower fuel costs but also reduce greenhouse gas emissions and dependence on fossil fuels. With technological improvements, modern gas engines can operate efficiently on low-BTU and variable-quality fuels, making them versatile for renewable applications.

This trend supports India’s broader decarbonization goals and is expected to accelerate as more stakeholders recognize the economic and environmental potential of using biogas in gas engine-powered energy systems.

Segmental Insights

Fuel Type Insights

The Natural Gas held the largest market share in 2025. Natural gas dominated the India gas engine market primarily due to its widespread availability, cost-effectiveness, environmental benefits, and strong government support. As India strives to meet its growing energy demands while reducing carbon emissions, natural gas has emerged as a reliable and cleaner alternative to traditional fuels such as coal and diesel.

One of the key reasons for natural gas’s dominance is the expanding infrastructure supporting its distribution. Over the past decade, the Indian government has invested significantly in developing a comprehensive natural gas pipeline network through projects like the Pradhan Mantri Urja Ganga and the National Gas Grid. These initiatives have increased access to piped natural gas (PNG) in many urban and industrial areas, making it a convenient and dependable fuel source for gas engines. The growing presence of city gas distribution (CGD) networks has also extended natural gas availability to residential and commercial sectors, further boosting its adoption.

From an economic perspective, natural gas offers a more cost-effective fuel option compared to alternatives like diesel or liquefied petroleum gas (LPG). Its stable supply and relatively lower price volatility contribute to predictable operating costs for industries and businesses using gas engines. This cost advantage, combined with higher thermal efficiency, makes natural gas engines attractive for captive power generation, backup power, and combined heat and power (CHP) applications.

Environmental considerations also play a significant role. Natural gas burns cleaner than coal and diesel, producing lower emissions of nitrogen oxides (NOx), sulfur oxides (SOx), particulate matter, and carbon dioxide (CO2). This aligns with India’s commitment to reducing air pollution and greenhouse gas emissions under international agreements and national policies. Consequently, industries and power producers are increasingly adopting natural gas engines to meet stringent environmental regulations and corporate sustainability goals.

Power Output Insights

The 25-55kVA held the largest market share in 2025.  The 25-55 kVA range dominated the India gas engine market due to its ideal balance of capacity, cost, and versatility, making it highly suitable for a broad spectrum of applications across industrial, commercial, and institutional sectors. This capacity segment meets the power requirements of many small to medium-sized enterprises (SMEs), commercial establishments, hospitals, hotels, and educational institutions that need reliable, efficient, and clean power solutions.

One of the primary reasons for the dominance of the 25-55 kVA gas engines is their ability to serve as efficient captive power sources or backup generators in environments where grid reliability is inconsistent. In many parts of India, frequent power outages and voltage fluctuations disrupt operations, prompting businesses to invest in gas engines within this capacity range to ensure uninterrupted power supply. The engines in this segment provide sufficient power without the high capital and operational costs associated with larger engines. Additionally, the 25-55 kVA gas engines are compact, easier to install, and require relatively lower maintenance compared to larger units, making them attractive for small and medium-scale applications. Their fuel efficiency and lower emissions compared to diesel generators also align well with the growing regulatory emphasis on cleaner energy and sustainability.

The expanding availability of natural gas infrastructure in urban and semi-urban areas supports the use of gas engines in this capacity range, as many SMEs and commercial users have access to piped natural gas, which is cost-effective and convenient.


Download Free Sample Report

Regional Insights

South India held the largest market share in 2025. South India dominated the India gas engine market due to a combination of robust industrial growth, well-developed natural gas infrastructure, and proactive government policies supporting cleaner energy adoption. The region has historically been a hub for manufacturing, information technology, pharmaceuticals, textiles, and chemical industries—sectors that require reliable and efficient power solutions. Gas engines offer these industries a cost-effective and environmentally friendly alternative to conventional diesel generators, which are still widely used in many parts of the country.

One of the primary reasons for South India’s dominance is the relatively advanced natural gas pipeline network compared to other regions. States like Tamil Nadu, Karnataka, and Andhra Pradesh benefit from better access to piped natural gas through city gas distribution projects and trunk pipelines. This accessibility lowers fuel supply costs and logistical challenges, making gas engines a more attractive option for industrial and commercial users.

The governments in South Indian states have actively promoted clean energy initiatives and have implemented favorable policies and incentives to encourage the use of natural gas. For instance, Tamil Nadu and Andhra Pradesh have invested in expanding gas infrastructure and provided subsidies or tax benefits for adopting low-emission technologies. These efforts have accelerated the transition from diesel-based power generation to gas engines. Moreover, South India’s focus on sustainability and environmental regulations has pushed industries and power producers to adopt cleaner technologies. Gas engines, known for their lower emissions of pollutants such as nitrogen oxides (NOx) and particulate matter, align well with the region’s commitment to reducing air pollution and carbon footprints.

Recent Developments

  • In January 2025, Cummins has introduced its new HELM™ Engine Platforms along with advanced power solutions designed to meet evolving energy demands. These platforms offer enhanced performance, fuel efficiency, and lower emissions, supporting a range of applications from industrial to commercial use. By integrating cutting-edge technology and flexible fuel options, Cummins aims to provide reliable and sustainable power systems that address global energy challenges. This launch reinforces Cummins’ commitment to innovation and cleaner energy solutions for diverse markets.
  • In June 2024, Weichai has launched its new generation of gas engines, featuring advanced technology that enhances efficiency, performance, and environmental sustainability. These engines are designed to meet stricter emission standards while offering improved fuel flexibility and reliability for various industrial and power generation applications. By introducing this latest generation, Weichai reinforces its commitment to innovation and supporting the global transition toward cleaner energy solutions, providing customers with more efficient and eco-friendly gas engine options.

Key Market Players

  • Caterpillar Inc.
  • Cummins Inc.
  • Wartsila Corporation
  • MAN Energy Solutions SE
  • General Electric Company
  • Mitsubishi Heavy Industries, Ltd.
  • INNIO Group
  • Kohler Co.

By Fuel Type

By Power Output

By End User

By Region

  • Natural Gas
  • Special Gas
  • Others
  • <15kVA
  • 15-25kVA
  • 25-55kVA
  • 55-75kVA
  • Utilities
  • Construction
  • Mining
  • Small Industries
  • Others
  • South India
  • North India
  • West India
  • East India

Report Scope:

In this report, the India Gas Engine Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

  • India Gas Engine Market, By Fuel Type:

o   Natural Gas

o   Special Gas

o   Others

  • India Gas Engine Market, By Power Output:

o   <15kVA

o   15-25kVA

o   25-55kVA

o   55-75kVA

  • India Gas Engine Market, By End User:

o   Utilities

o   Construction

o   Mining

o   Small Industries

o   Others

  • India Gas Engine Market, By Region:

o   South India

o   North India

o   West India

o   East India

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the India Gas Engine Market.

Available Customizations:

India Gas Engine Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

  • Detailed analysis and profiling of additional market players (up to five).

India Gas Engine Market is an upcoming report to be released soon. If you wish an early delivery of this report or want to confirm the date of release, please contact us at [email protected]  

Table of content

Table of content

1.         Product Overview

1.1.     Market Definition

1.2.     Scope of the Market

1.2.1. Markets Covered

1.2.2. Years Considered for Study

1.3.     Key Market Segmentations

2.         Research Methodology

2.1.     Objective of the Study

2.2.     Baseline Methodology

2.3.     Formulation of the Scope

2.4.     Assumptions and Limitations

2.5.     Sources of Research

2.5.1. Secondary Research

2.5.2. Primary Research

2.6.     Approach for the Market Study

2.6.1. The Bottom-Up Approach

2.6.2. The Top-Down Approach

2.7.     Methodology Followed for Calculation of Market Size & Market Shares

2.8.     Forecasting Methodology

2.8.1. Data Triangulation & Validation

3.         Executive Summary

3.1.     Overview of the Market

3.2.     Overview of Key Market Segmentations

3.3.     Overview of Key Market Players

3.4.     Overview of Key Regions/Countries

3.5.     Overview of Market Drivers, Challenges, and Trends

4.         Voice of Customer

5.         India Gas Engine Market Outlook

5.1.     Market Size & Forecast

5.1.1. By Value

5.2.     Market Share & Forecast

5.2.1. By Fuel Type (Natural Gas, Special Gas, Others)

5.2.2. By Power Output (<15kVA, 15-25kVA, 25-55kVA, 55-75kVA)

5.2.3. By End User (Utilities, Construction, Mining, Small Industries, Others)

5.2.4. By Region (South India, North India, West India, East India)

5.2.5. By Company (2025)

5.3.     Market Map

6.         South India Gas Engine Market Outlook

6.1.     Market Size & Forecast

6.1.1. By Value

6.2.     Market Share & Forecast

6.2.1. By Fuel Type

6.2.2. By Power Output

6.2.3. By End User

7.         North India Gas Engine Market Outlook

7.1.     Market Size & Forecast

7.1.1. By Value

7.2.     Market Share & Forecast

7.2.1. By Fuel Type

7.2.2. By Power Output

7.2.3. By End User

8.         West India Gas Engine Market Outlook

8.1.     Market Size & Forecast

8.1.1. By Value

8.2.     Market Share & Forecast

8.2.1. By Fuel Type

8.2.2. By Power Output

8.2.3. By End User

9.         East India Gas Engine Market Outlook

9.1.     Market Size & Forecast

9.1.1. By Value

9.2.     Market Share & Forecast

9.2.1. By Fuel Type

9.2.2. By Power Output

9.2.3. By End User

10.      Market Dynamics

10.1.  Drivers

10.2.  Challenges

11.      Market Trends & Developments

11.1.  Merger & Acquisition (If Any)

11.2.  Product Launches (If Any)

11.3.  Recent Developments

12.      Policy and Regulatory Landscape

13.      India Economic Profile

14.      Company Profiles

14.1.  Caterpillar Inc.

14.2.  Cummins Inc.

14.3.  Wartsila Corporation

14.4.  MAN Energy Solutions SE

14.5.  General Electric Company

14.6.  Mitsubishi Heavy Industries, Ltd.

14.7.  INNIO Group

14.8.  Kohler Co

15.      Strategic Recommendations

16.    About Us & Disclaimer

Figures and Tables

Frequently asked questions

Frequently asked questions

The market size of the India Gas Engine Market was USD 125 Million in 2025.

In 2025, Small industries dominated the India gas engine market due to their growing need for affordable, reliable, and clean power solutions. Gas engines offer cost-effective energy, easy scalability, and lower emissions, making them ideal for small-scale operations facing frequent grid instability and rising electricity costs in industrial clusters across India.

Major challenges in the India gas engine market include inconsistent natural gas supply, high fuel costs, limited infrastructure in remote areas, and lack of technical expertise. These factors hinder widespread adoption, increase operational risks, and create uncertainty for investors and end-users seeking reliable and cost-effective gas engine solutions.

Major drivers of the India gas engine market include expanding natural gas infrastructure, rising demand for clean and reliable power, supportive government policies promoting low-emission technologies, and growing industrialization. Additionally, increasing adoption of biogas and advancements in engine technology further fuel market growth and sustainability efforts.

Related Reports

We use cookies to deliver the best possible experience on our website. To learn more, visit our Privacy Policy. By continuing to use this site or by closing this box, you consent to our use of cookies. More info.