India’s Energy Security is being tested in the current geopolitical scenario. Read here to learn more about the strategies to strengthen India’s energy security.
India’s energy security remains structurally fragile, with heavy dependence on imported fossil fuels and exposure to geopolitical chokepoints such as the Strait of Hormuz.
With crude oil import dependence at ~90% and limited strategic reserves (9-10 days vs the global 90-day benchmark), energy security has evolved from an economic concern into a core strategic imperative.
How India is Strengthening its Energy Security
Strategic Petroleum Reserves and Buffer Creation
India is shifting from ad-hoc storage mechanisms to structured strategic reserves to mitigate supply shocks.
The government is expanding its Strategic Petroleum Reserve (SPR) under Phase II:
- 4 MMT facility at Chandikhol (Odisha)
- 2.5 MMT expansion at Padur (Karnataka)
This enhances India’s ability to cushion against:
- Supply disruptions
- Imported inflation
- Maritime chokepoint risks
However, reserves remain below global standards, indicating the need for statutory storage mandates.
Diplomatic De-risking through Energy Corridors
India is diversifying its energy supply routes to reduce reliance on West Asia.
The India-Middle East-Europe Economic Corridor (IMEC):
- Offers alternative transit routes
- Can reduce logistics costs by ~30%
- Cuts transit time by ~40%
Additionally, long-term LNG agreements (e.g., with ADNOC Gas) ensure stable supply contracts, reducing spot-market volatility.
Carbon Capture and Industrial Transition
India is integrating energy transition with industrial strategy through investments in Carbon Capture, Utilisation, and Storage (CCUS).
- ₹20,000 crore allocation in Budget 2026–27
- Focus on the steel and cement sectors
This reduces dependence on imported coking coal while aligning with climate goals.
The Green Hydrogen Push
Under the National Green Hydrogen Mission, India aims to:
- Replace grey hydrogen (gas-based) with green hydrogen
- Decarbonise sectors like fertilisers, steel, and refining
Projects like green hydrogen pilots at V.O. Chidambaranar Port support:
- Clean shipping
- Renewable integration
- Port-led industrial ecosystems
Expansion of Renewable Energy and Storage
India is rapidly increasing its renewable capacity:
- Achieved 51.5% electricity demand met by renewables on a peak day (2025)
- Battery Energy Storage Systems (BESS) expanded to 547 MWh
This reduces reliance on imported fossil fuels and enhances energy sovereignty.
However, intermittency remains a challenge without large-scale storage.
Electrification of Transport
Through schemes like the PM E-DRIVE Scheme:
- Over 22 lakh EVs sold (2026)
- Focus on two/three-wheelers and freight electrification
This directly reduces:
- Oil import bills
- Future fossil fuel demand
Boosting Domestic LPG Production
India has increased domestic LPG output by over 25% under the Essential Commodities Act.
This ensures:
- Household energy security
- Protection from global price shocks
Biofuel Strategy: Farm-to-Fuel Model
India achieved 20% ethanol blending (E20) by 2025, ahead of schedule.
Benefits include:
- Reduced crude imports
- Support for farmers
- Forex savings
Nuclear Energy Expansion and SMRs
India is expanding its nuclear capacity:
- From 8180 MW to 22480 MW by 2031-32
Focus on Small Modular Reactors (SMRs) under the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill:
- Encourages private participation
- Provides stable, non-fossil baseload power
Key Challenges to India’s Energy Security
Geopolitical Vulnerability
Heavy reliance on imports, especially via the Strait of Hormuz, makes India vulnerable to:
- Conflicts in West Asia
- Supply disruptions
- Price shocks
LPG imports (nearly 90% via Hormuz) are particularly sensitive.
Inadequate Strategic Storage
- India’s SPR provides only ~9.5 days of cover versus the 90-day global benchmark, leaving the economy exposed during prolonged crises.
- Additionally, there are no strategic natural gas reserves.
Critical Mineral Dependency
Clean energy transition introduces new vulnerabilities:
- 100% import dependence on lithium and cobalt
- Supply chain dominance by China
This risks replacing oil dependency with mineral dependency.
Grid Intermittency and Storage Gaps
Despite renewable expansion:
- Coal still contributes ~74% of electricity
- Storage capacity remains insufficient
This creates a mismatch between generation and demand cycles.
Financial Stress of DISCOMs
State distribution companies suffer from:
- High AT&C losses (~15%)
- Structural debt
- Delayed payments
This discourages private investment and slows grid modernisation.
Technology and R&D Gaps
India relies heavily on imports for:
- Electrolysers for hydrogen
- Advanced battery technologies
- CCUS infrastructure
This limits true energy independence.
Climate Change Impacts
Extreme weather affects energy systems:
- 16.3% drop in hydropower (2024)
- Heatwaves reduce thermal efficiency
This increases system vulnerability during peak demand.
Just Transition Challenges
Coal-dependent regions face:
- Employment risks (3.6 million jobs linked)
- Regional economic instability
Transition must balance sustainability with social equity.
Land Conflicts (“Green-on-Green”)
Large renewable projects often conflict with:
- Agriculture
- Biodiversity
- Local communities
Example: Cancellation of solar projects due to protests.
Cybersecurity Risks
- The digitisation of energy systems increases vulnerability to cyberattacks.
- Example: Attack on Power Grid Corporation of India highlights risks to grid infrastructure.
Measures Required to Strengthen Energy Security
Statutory Deep Storage Framework
- Mandate minimum reserve obligations
- Develop strategic gas storage
- Expand SPR capacity
Diplomatic and Corridor-Based Hedging
- Operationalise IMEC
- Strengthen long-term bilateral energy agreements
- Diversify supply routes
Deep-Tech Localisation
- Invest in domestic R&D for hydrogen, CCUS, and batteries
- Promote private sector innovation
- Reduce technology imports
Green Substitution Policies
- Mandate green hydrogen use in fertilisers and refineries
- Reduce natural gas imports
- Lower subsidy burden
Critical Mineral Strategy
- Acquire overseas mining assets
- Develop domestic processing capacity
- Promote recycling and the circular economy
DISCOM Reforms
- Privatisation of loss-making units
- Smart metering and dynamic pricing
- Grid modernization
Decentralised Bioenergy Systems
- Promote compressed biogas (CBG)
- Integrate agriculture with energy production
- Reduce LPG imports
Indigenous SMR Development
- Encourage public-private partnerships
- Scale nuclear energy for baseload stability
Conclusion
India’s energy security is no longer a peripheral issue but a central pillar of national security and economic stability. With rising geopolitical uncertainties and energy transition pressures, India must simultaneously diversify supply, build domestic capacity, and invest in future technologies.
A synchronised approach, combining strategic reserves, renewable expansion, green hydrogen, nuclear energy, and deep-tech innovation, offers the most credible pathway to decouple economic growth from external energy vulnerabilities.
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