Introduction
India, one of the world’s most populous nations and a developing country, is experiencing rapid urbanization and industrialisation. This growth has led to a significant increase in individual electricity consumption, resulting in a yearly rise in the country's overall electricity demand. India is the 3rd largest power market after China and the USA.
Electricity consumption worldwide in 2023, by leading country (in terawatt-hours) (Statistica, 2025)
Projections indicate that by 2050, India's electricity demand could grow up to three times its current level. While on the one hand the nation seeks to industrialise and develop, on the other hand, it is also looking to mitigate carbon emissions. Contradicting both these targets is the fact that a large portion of the electricity produced is lost due to transmission and distribution (T&D) inefficiencies.
Transmission and Distribution (T&D) Losses
T&D loss refers to the electricity lost while transmitting and distributing power from the generation source to the end consumer. This loss mainly occurs due to resistance in wires and inefficiencies in equipment, due to outdated infrastructure, and inefficient power lines. In the year 2019–20, approximately 21.4% of generated electricity was lost during transmission and distribution. As a result, a significant portion of the electricity generated never reaches the end consumers, leading to wasted resources, higher production costs, and avoidable environmental impacts.
This percentage of loss in India is notably higher than the global average, even impacting India's overall economy. For example, when production industries, and IT sectors (that require continuous power supply for their operation) experience power shortages, it can result in GDP losses of up to 7%. Not only does this push back the nation’s growth, but also, more resources have to now be spent to make up for these losses through further electricity generation.
State wise Electricity Transmission & Distribution Losses / BusinessToday.in
According to 2017 data on T&D losses, Arunachal Pradesh recorded the highest loss among Indian states and union territories, with a loss of 49.4%. Jammu & Kashmir followed closely with a T&D loss of 47%. On the other hand, Lakshadweep had the lowest T&D loss at just 7%, demonstrating efficient electricity distribution. Overall, among the 36 states and union territories, 19 reported T&D losses above the national average, while 17 remained below it. Notably, many northern and eastern states experienced higher losses in transmission and distribution. India’s two island territories — Lakshadweep (7%) and Andaman & Nicobar Islands (10.7%) — performed exceptionally well in minimizing electricity loss. Tamil Nadu, with a T&D loss of 12.6%, also fares better than many other states, indicating relatively efficient electricity management.
Impact of higher T&D losses
India produces more than 60% of its energy requirements from thermal power plants (ie, coal energy). A significant portion of the coal used in thermal power plants is imported from other countries, which is a substantial financial burden on the national economy. Thermal power plants are also among the major contributors to air pollution and greenhouse gases. Therefore losing electricity generated through thermal energy significantly undermines India's climate action objectives.
World Bank Group's 2014 data shows that our neighbouring countries such as Bangladesh (11%), Sri Lanka (11%), and Pakistan (17%) have lower T&D losses compared to India’s (19%). In India, while many villages still lack access to electricity, a significant amount of power is simultaneously wasted to T&D losses.
A comparison of T&D losses among India’s neighbours / World Bank
Way Forward
Every year, India continues to increase investment in electricity production and power transmission to meet its growing demand. However, what is needed is specific investment to reduce T&D losses. This can include:
Grid Modernization: Smart grid technologies, modernising transmission lines, installing high-efficiency transformers, and conducting regular maintenance can significantly reduce energy losses and improve overall power system efficiency.
Promoting decentralized power generation—such as decentralized solar power plants,rooftop solar panels and community-based renewable energy systems. .
Energy conservation indirectly reduces T&D losses by decreasing the overall demand on the power grid.
T&D loss remains a major hurdle to development. The points discussed above highlight some key ways to reduce and manage these losses effectively.
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