Key takeaways
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- China’s per capita GDP is five times that of India, and its per-capita energy use is four times higher than India’s.
- India’s population surpassed China’s in 2021, but its energy use per person remains far lower.
- Both countries still rely heavily on coal, which makes up 54% of China’s and 57% of India’s total energy mix.
- Despite impressive clean energy capacity gains, coal use has grown in absolute terms for both nations.
- China and India account for nearly 40% of global greenhouse gas (GHG) emissions making their energy choices pivotal for climate targets.
Asia’s energy giants: a tale of two strategies
The direction of global energy is defined by what goes on with China’s energy system. The International Energy Agency’s (IEA) analysis of future oil demand, for example, is predicated on the energy policies of China. Talk of global peak oil demand is derived from outlooks suggesting that Chinese oil demand is peaking. Global deployment of solar, wind, and other non-fossil energy sources is largely driven by the pace of deployment of these technologies in China. According to the Bloomberg NEF Energy Transition Investment Trends report 2025, of the $2.1 trillion deployed to clean energy technologies and infrastructure in 2024, $818 billion (~ 40%) was deployed in China – more than double any other economy. Without prejudice to the fact that net-zero ambitions have been facing stiff challenges lately, China has committed to net zero by 2060.
However, there is another country to watch – India.
India is increasingly energy thirsty and has been so for the last 35 years. Its energy demand has grown at a compound annual growth rate (CAGR) of 4.8% per annum since 1990 as its population has grown at 1.53% per annum (compared to China’s 0.64% per annum). India’s population is 1.45 billion (2024), having surpassed China in 2021. China now stands at a population of 1.41 billion (2024).
Like China, India depends on hydrocarbon resources (aka fossil fuels), of which it imports significant amounts – 89% of its oil, 45% of its gas, and 50%+ of its coking coal requirement. For both countries, coal features significantly in their energy mix – China’s 53% and India’s 57% share of energy use is coal – yet India has set itself the target to be net zero by 2070. Both countries have ramped up the contribution of solar, wind, and non-hydrocarbon energy sources to their respective energy mix. Both countries also have energy security as a heightened priority. This drives their strategy for increased electrification via non-hydrocarbon energy with the aim of minimizing their dependence on imported fossil fuels.
India is on track to become the third largest economy in the world by 2027, and has set itself the ambition to become a high middle-income economy (having a per-capita gross national income of between $4,496 and $13,935 according to world bank income groupings in 2024) by 2047. To achieve middle income status, India’s economy must grow at 8-9% per annum to $30 trillion (nominal) by 2047 – when the country celebrates its centenary. Assuming a population growth rate of 1.53%, this would place India at a per-capita GDP of $13,800 by 2047 – at par with China’s current per capita GDP of $13,303 (2024). This growth will come with increased energy use, and – we can reasonably expect – increased carbon emissions.
Given that both countries rely heavily on coal (plus oil and gas), account for nearly 40% of global GHG emissions (China, 25.37% and India, 11.18%), and have made net-zero pledges, it is obvious that attempts to manage global CO2 emissions cannot exclude the Panda and the Tiger. The challenge, therefore, is how these countries manage the environmental impacts of economic prosperity while growing energy consumption and security.
In this article, we will compare the growth trajectories and energy-use composition of China and India to unravel the realities beneath their climate commitments.
We start with their economic growth trajectories.
GDP vs energy – the diverging paths of China and India
The relationship between economic growth – as captured by per-capita GDP – and per-capita energy consumption is well established. As of 2024, China’s per-capita GDP (measured in current US$) at $13,303 was roughly five times the per-capita GDP of India. In 1990, the two countries had similar per-capita GDP – China’s was $319 while India’s was $371. However, their paths quickly diverged as visualized in Figure 1.
Figure 1 – China’s and India’s per-capita GDP grow at different rates.
Since 1990, China’s GDP per capita grew at a compound annual growth rates (CAGR) of 11.6% per annum compared to India’s, which grew at 6% per annum. In absolute terms, China’s GDP grew at 12.3% per annum, while its population grew at 0.64% per annum from 1990. Over the same period, India’s GDP grew at 7.6% per annum, while its population grew at 1.53% per annum. This explains the present divergence between their per-capita GDP.
Two epochs can broadly be distinguished in China’s per-capita GDP trends, marked by the steepness of trajectory – the first from 1990 to 2004, the second from 2004 to 2024. China’s per-capita GDP grew faster during the second period. China’s aggressive expansion of its GDP has been explained by its large-scale capital investment and rapid productivity growth.
India’s GDP per capita also exhibits two broad epochs, although not so obvious from Figure 1 due to the difference in scale between China’s and India’s per-capita GDP. For India, the first epoch ends in 2002, while the second epoch, characterized by faster GDP per-capita growth, runs from 2002 to present day. India’s growth has been explained by a combination of economic reforms, increased foreign investment, a large and increasingly skilled workforce, and a booming IT sector.
Growth in these two economies has been undergirded by energy consumption, to which we now turn our attention.
Who consumes more – and why it matters
China’s 42-fold increase in its GDP per capita since 1990 has been accompanied by a five-fold increase in its per-capita energy consumption. This compares to India’s seven-fold increase in per-capita GDP and three-fold increase in per-capita energy consumption since 1990.
As of 2024, China’s per-capita energy consumption at 34,406 kWh (124 GJ/capita) was more than four times India’s 7,772 kWh/capita (28 GJ/capita). There are three epochs noted in China’s per-capita energy consumption characterized by different growth rates. The first epoch is observed from 1990 to 2002, the second from 2002 to 2016, and the third from 2016 to 2024.
Figure 2 – China’s per-capita energy consumption grew at 5% per annum from 1990, compared to India’s 3% per annum.
While China’s energy consumption per capita has grown at 4.81% per annum since 1990, its pace varied across the three epochs. The most rapid growth rate occurred from 2002 to 2016, during which China’s per-capita energy consumption grew at 6.42% annually. Since 2016, it has grown at ~4% per annum.
India’s per-capita energy consumption grew at a slower pace of 3.22% per annum from its 1990 level of 2,646 kWh/capita (9.53 GJ/capita). The country’s goal to become a high middle-income country by 2047 is premised on 8%-per-annum growth in GDP – the historical growth rate from 1990. Achieving this objective will require increased energy consumption, even as we observe the historical decline in energy intensity – the amount of energy used to generate $1 of GDP – for both China and India.
Figure 3 – Energy intensity declines in China and India.
Currently, China’s economy is slightly less energy-intense than India’s – a marked difference from three-and-a-half decades ago when the economy of India was about one-third as energy intense as China’s. In 1990, the GDP of China and India were fairly even – $362 billion for China and $321 billion for India. However, China consumed 7,915 TWh of energy, 77% of which was in the form of coal, 16% as oil, and 2% as gas. India, on the other hand, consumed 2,288 TWh of energy, 55% of which was in the form of coal, 30% as oil, and 5% as gas. India’s lower energy consumption, and a lower share of coal in its energy mix, resulted in a lower energy-intensive economy than China.
Energy mix and the place of coal
The Chinese and Indian economies have grown on the back of heavy hydrocarbon resource consumption. This much is clear from the share of oil, gas, and coal that make up the “energy diet” of these countries. However, faced by the combination of energy security concerns, geopolitical manoeuvring, and environmental considerations, the energy mix is changing for both.