30.08.2025

India’s Energy Policy & Transition

Core Argument:
India needs a multi-pronged approach to diversify energy sources, boost domestic production, and enhance resilience against global energy shocks. Ensuring energy security is now integral to national security.

1. Current Energy Dependency

• Crude Oil: About 85% of India’s crude oil is imported, later refined into petrol and related products.
   
• Natural Gas: Over half of India’s natural gas requirements are met through imports.
   
• Import Costs: Oil and gas imports account for roughly 25% of India’s total import bill (~$170 billion).
   
• Changing Partners: India has reduced reliance on West Asia, now sourcing 35–40% of crude oil from Russia, often at discounted rates.
   

2. Lessons from Global Energy Crises

• Diversification is Crucial: Dependence on a single country increases vulnerability to geopolitical or supply shocks.
   
• 1973 Oil Embargo: Arab–US conflict triggered global price spikes, leading to Strategic Petroleum Reserves (SPRs) and diversification strategies.
   
• 2011 Fukushima Disaster: Japan’s nuclear crisis forced a temporary shift to coal and gas, later revisiting nuclear for climate goals.
   
• 2021 US Winter Storms: Frozen pipelines and failed wind turbines showed the need for weather-resilient infrastructure.
   
• 2022 Russia–Ukraine War: European LNG shortages and coal resurgence highlighted the importance of multiple energy sources.
   

3. Global Energy Transition Reality

• Fossil Fuel Dominance: Fossil fuels still produce 80% of global energy.
   
• Limited Renewables: Solar and wind together contribute under 10% globally.
   
• Investment Needs: Renewable deployment requires significant capital and a strategic balance with fossil fuel usage.
   

4. Five-Pillar Strategy for India

1. Coal Gasification
    
   • Convert coal into syngas, methanol, hydrogen, and fertilizers instead of direct burning.
      
   • India has 150+ billion tons of coal, much high-ash, ideal for gasification.
      
   • Captures carbon emissions, reduces pollution, and supports future energy independence.
      
2. Biofuels
    
   • Ethanol blending from sugarcane and agricultural residues is already in use.
      
   • Expand biogas plants (SATAT scheme) for fuel production from farm waste.
      
   • Requires R&D, infrastructure, and investment to scale efficiently.
      
3. Nuclear Energy
    
   • Current capacity: 8.8 GW, relatively stagnant over years.
      
   • Clean energy source; initiatives include thorium reactors, uranium partnerships, and Small Modular Reactors (SMRs).
      
   • Accelerating planned projects is critical for energy diversification.
      
4. Green Hydrogen
    
   • Target: 5 MMT annually by 2030.
      
   • Produced by water electrolysis without emissions; costs remain high.
      
   • Domestic electrolyzer manufacturing and technology investment are vital.
      
5. Pumped Hydro Storage
    
   • Balances the grid using excess solar and wind energy.
      
   • Ensures grid stability, manages intermittency, and supports renewable integration.
      

Conclusion

India must act proactively to prevent energy crises, focusing on domestic production, diversification, and storage solutions. A forward-looking strategy ensures energy affordability, reliability, and security, shielding citizens and the economy from global shocks.