Rethinking India’s Energy Security Paradigm

This editorial is based on “West Asia’s shadow on energy security in India” which was published in The Hindustan Times  on 23/03/2026. This editorial provides a multidimensional analysis of India’s energy vulnerabilities, highlighting the critical gap between current strategic reserves and global security benchmarks. It outlines a transformative roadmap, aimed at insulating the Indian economy from geopolitical supply shocks.

For Prelims: Strategic Petroleum Reserve (SPR), India-Middle East-Europe Economic Corridor (IMEC),Green Hydrogen Mission. 

For Mains: India’s progress in energy security, key issues, and measures needed.  

India’s energy security remains structurally fragile, with oil and gas accounting for 36% of its energy mix, while import dependence stands at ~90% for crude oil and ~47% for natural gas. Nearly 50% of crude and 55–60% of LNG imports transit through the Strait of Hormuz, exposing India to geopolitical disruptions. Strategic reserves provide only 9–10 days of crude cover, far below the 90-day global benchmark. This high external vulnerability makes energy security not just an economic concern, but a critical strategic imperative for India. 

How is India Strengthening its Energy Security? 

• Strategic Petroleum Reserves & Statutory Buffers: Geopolitical volatility demands a rapid shift from ad-hoc storage to statutory reserve obligations to cushion against supply chain chokepoints.  
  • Building robust domestic buffers is essential to insulate the broader economy from imported inflation and concentrated maritime crises.  
  • The government is fast-tracking Phase II expansion of the Strategic Petroleum Reserve (SPR) by 6.5 MMT to strengthen energy security buffers.  
    • This includes a new 4 MMT underground facility at Chandikhol (Odisha) and a 2.5 MMT expansion at Padur (Karnataka), aimed at enhancing India’s emergency crude storage capacity and reducing vulnerability to external supply shocks. 
• Diplomatic De-risking via Transnational Corridors: India is mitigating West Asian energy vulnerabilities by leveraging transnational economic corridors to diversify its energy transit routes.  
  • Strengthening strategic bilateral partnerships secures long-term supply agreements that bypass traditional maritime flashpoints and geopolitical bottlenecks.  
  • The accelerated operationalization of the India-Middle East-Europe Economic Corridor (IMEC) creates alternative, secure energy and trade conduits.  
    • The corridor aims to potentially cut transit times by 40% and logistics costs by 30%. 
  • Further, Hindustan Petroleum Corporation Limited has signed a 10-year LNG supply agreement with Abu Dhabi Gas Liquefaction Company, a subsidiary of ADNOC Gas. 
    • The deal strengthens India’s long-term energy security by ensuring a stable supply of liquefied natural gas. 
• Carbon Capture and Industrial Transition: Decarbonizing heavy industries is now a central pillar of energy security, transforming environmental commitments into strategic economic resilience mechanisms.  
  • Investing in deep-tech transition infrastructure allows India to reduce its structural reliance on imported fossil fuels for heavy industrial growth.  
  • The Union Budget 2026-27 explicitly allocated ₹20,000 crore for localized Carbon Capture, Utilisation, and Storage (CCUS) infrastructure.  
    • This capitalizes on the "Make in India" framework to lower imported coking coal reliance within the domestic steel and cement sectors. 
• The Green Hydrogen Frontier: By positioning itself as a global hub for green hydrogen through the National Green Hydrogen Mission, India is moving to "de-risk" its hard-to-abate industrial sectors like steel and fertilizers. 
  • This strategy aims to replace "grey" hydrogen (derived from gas) with "green", effectively insulating critical industries from natural gas supply chain disruptions. 
  • Also, at V. O. Chidambaranar Port, India launched a green hydrogen pilot project along with plans for green methanol bunkering, boosting clean energy use in ports. 
    • The initiative supports green shipping, renewable energy expansion, and port-led sustainable development under India’s energy transition goals. 
• Boosting Renewable Capacity and Strengthening Grid Integration: Aggressive expansion of hybrid renewable generation minimizes grid intermittency and anchors large-scale industrial electrification.  
  • Utilizing diverse renewable sources provides a secure, domestically controlled energy baseload that remains entirely independent of global geopolitics.  
  • On 29 July 2025, India reached its highest-ever renewable energy share in electricity generation. That day, renewables met 51.5 % of the country’s total electricity demand of 203 GW. 
  • When coupled with expanding Battery Energy Storage Systems (BESS), this directly reduces baseline electricity grid reliance on imported thermal coal. 
    • India added 547 MWh of battery energy storage capacity in 2025, a 26% increase compared to 433 MWh added in 2024. 
• Electrification of Freight and Road Transport: Accelerating the electrification of logistics and two/three-wheelers directly curtails the projected mid-century peak in fossil fuel consumption.  
  • Shifting road transport toward electricity and alternative bridge fuels prevents the stranding of domestic refining assets while cutting import bills.  
  • For instance, under the PM E-DRIVE Scheme, India has significantly accelerated electric mobility, with 22.12 lakh EVs sold (as of February 2026) out of a target of over 28 lakh vehicles.  
• Maximizing Domestic LPG Production: Reorienting national refinery outputs to prioritize domestic consumer fuel needs safeguards vulnerable populations from imported fuel inflation and supply chain vulnerability.  
  • Strategic refinery management ensures that fluctuations in global crude availability do not immediately disrupt essential household cooking energy access.  
  • Indian refiners have increased their domestic output of LPG by more than 25% since the government passed the order to increase the domestic LPG output under the Essential Commodities Act, 1955, as the West Asia conflict posed risks to New Delhi’s energy supplies. 
• Biofuel Autonomy through "Farm-to-Fuel": India is converting its agricultural surplus into a strategic energy reserve by accelerating the Ethanol Blended Petrol (EBP) program.  
  • This serves the dual purpose of saving precious foreign exchange and providing a "cushion" against the volatility of the West Asian crude oil markets. 
  • India achieved the 20% ethanol blending (E20) target in petrol by late 2025, five years ahead of the original 2030 schedule. 
• Nuclear Energy Renaissance and SMRs: Diversifying the zero-emission baseload matrix through advanced nuclear technology is essential to meet India's surging industrial power demand.  
  • Recent policy frameworks actively encourage localized development of Small Modular Reactors (SMRs).  
  •  The present installed nuclear power capacity is set to increase from 8180 MW to 22480 MW by 2031-32. This complements the existing indigenous three-stage program, expanding India's non-fossil baseload capacity. 
  • Also, the Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India Bill, 2025 opens the nuclear sector to private participation, introduces tiered liability norms, and establishes a statutory regulatory and grievance redressal framework.

What are the Key Challenges Associated with India’s Energy Security? 

• Vulnerability to Geopolitical Supply Shocks: India's disproportionate reliance on imported fossil fuels directly exposes its macroeconomic stability to volatile geopolitical flashpoints and maritime supply chain disruptions.  
  • Currently, India imports approximately 90% of its crude oil and nearly 50% of its natural gas, with over half historically transiting through the volatile Strait of Hormuz.  
  • India’s heavy dependence on LPG imports from West Asia makes its food security and household budgets highly vulnerable to disruptions in the Strait of Hormuz. 
    • With LPG being a “just-in-time” fuel and limited reserves, any shipping delay quickly leads to supply shortages and rationing. 
    • As of March 2026, nearly 90% of LPG imports pass through Hormuz, and recent regional tensions have sharply reduced arrivals. 
• Inadequate Strategic Storage Buffers: The lack of legally mandated, deep strategic storage infrastructure severely limits India's capacity to cushion the economy against sudden, prolonged supply-side shocks.  
  • Unlike developed economies that utilize statutory obligations to maintain extensive reserves, India relies heavily on ad-hoc executive measures and underutilized commercial capacities.  
  • India's Strategic Petroleum Reserve (SPR) currently provides only a 9.5 day of net import cover, vastly trailing the International Energy Agency's recommended 90-day benchmark. 
    • Furthermore, the complete absence of dedicated strategic natural gas reserves leaves price-sensitive sectors fully exposed. 
• The "Critical Mineral Trap: Transitioning from fossil fuels to clean energy risks merely shifting India's import dependency from Middle Eastern crude cartels to highly concentrated critical mineral supply chains.  
  • The aggressive push toward electric mobility and renewable grid storage is severely constrained by a lack of secured, diversified global extraction and processing partnerships.  
  • India currently imports nearly 100% of its lithium and cobalt requirements, with global processing capacities overwhelmingly dominated by China. 
  • Despite domestic discoveries like the lithium reserves in Jammu and Kashmir, commercial extraction remains years away, necessitating urgent overseas mine acquisitions. 
• Grid Intermittency and Storage Deficits: The rapid scaling of renewable generation creates severe grid integration challenges due to the inherent intermittency of solar and wind power.  
  • Without proportionate, massive investments in scalable energy storage and grid modernization, surplus renewable generation risks curtailment while peak evening demand remains tethered to fossil fuels.  
  • While India is aggressively expanding toward its 500 GW non-fossil capacity target, its Battery Energy Storage System (BESS) deployment remains highly nascent, adding only 547 MWh recently.  
  • Consequently, as peak national power demand consistently crosses the 240 GW threshold, the grid still heavily necessitates baseload support from the coal sector, which accounts for 74% of total electricity generation. (as of April 2025) 
• Persistent Financial Fragility of DISCOMs: The chronic financial instability of state-owned distribution companies (DISCOMs) remains the weakest link in India's energy value chain, actively stifling essential infrastructure upgrades.  
  • Accumulated structural debts and high transmission losses actively deter private investments in smart grids and delay the seamless integration of decentralized renewable energy sources.  
  • Despite recent accounting profits driven by the Revamped Distribution Sector Scheme (RDSS), DISCOMs still grapple with high Aggregate Technical and Commercial (AT&C) losses averaging 15.04% nationally in FY25, well above the global benchmark.  
• Domestic Deep-Tech and R&D Deficits: Over-reliance on imported technology for next-generation energy solutions severely undermines India's aspirations for true strategic energy autonomy and global manufacturing leadership.  
  • The domestic ecosystem currently lacks the deep-tech R&D foundation required to independently commercialize advanced transition fuels and localized emission mitigation technologies at a competitive scale.  
    • India currently imports a vast majority of the high-efficiency electrolyzers required for green hydrogen production, keeping levelized costs stubbornly above the commercially viable target.  
  • Similarly, the deployment of crucial Carbon Capture, Utilisation, and Storage (CCUS) infrastructure remains primarily in pilot phases, requiring massive private capital to supplement initial government budget allocations like the recent ₹20,000 crore outlay. 
• Climate Change Impacts on Energy Infrastructure: Escalating extreme weather events driven by climate change directly threaten the physical resilience of India's existing energy generation and transmission networks.  
  • Altered hydrological cycles and severe heatwaves compromise the operational efficiency of thermal cooling systems and severely disrupt reliable baseload hydropower generation.  
    • For instance, in 2024, India experienced a drastic 16.3% drop in hydroelectricity output, due to erratic rainfall. 
  • Simultaneously, unprecedented summer heatwaves force thermal plants to operate at sub-optimal efficiencies, straining the national grid precisely when cooling demand spikes exponentially across urban centers. 
• Complexity of a "Just Transition": Phasing down domestic coal production presents massive socio-economic challenges for resource-rich states where local economies are entirely tethered to the mining ecosystem.  
  • The coal sector directly and indirectly employs over 3.6 million people, predominantly concentrated in economically vulnerable eastern states like Jharkhand, Odisha, and Chhattisgarh.  
    • Executing a "just transition" requires immense capital to reskill millions of workers and structurally diversify regional economies without compromising near-term energy availability and affordability.  
  • As India's total energy demand is projected to double over the next two decades, retiring these thermal assets prematurely without viable, scaled economic alternatives threatens severe regional instability and massive livelihood disruptions. 
• The "Green-on-Green" Land Acquisition Conflict: The pursuit of "Giga-scale" solar and wind parks is increasingly clashing with agricultural productivity and local biodiversity, leading to significant project delays and legal hurdles.  
  • These "green-on-green" conflicts occur when the land required for climate mitigation competes with the land needed for food security or the protection of endangered species. 
  • For instance, in June 2025, the Assam government was forced to cancel a solar project due to vehement protests from indigenous and tribal communities. 
• Cyberattack on Energy Assets: The rapid digitization of the power sector through smart meters, IoT-enabled solar inverters, and EV charging stations has exponentially expanded the "attack surface" for state-sponsored cyber-adversaries.  
  • A breach in these interconnected systems could lead to localized blackouts or systemic grid failure, making digital resilience as critical as physical fuel stocks. 
  • For instance, in May 2025, the Power Grid Corporation of India (PGCIL) faced a coordinated DDoS attack that disrupted its official portal for 31 minutes. 

What Measures are Required to Strengthen India’s Energy Security? 

• Statutory Deep-Storage Architecture: Transitioning from executive ad-hocism to statutory stockholding obligations is imperative to create resilient, deep-storage infrastructure capable of absorbing prolonged geopolitical supply shocks.  
  • This requires enacting binding legislation that mandates oil marketing companies to maintain strategic reserves while simultaneously developing dedicated, green-hydrogen-ready underground gas storage buffers. 
• Transnational Diplomatic Hedging: Diversifying energy transit away from volatile maritime chokepoints requires aggressively operationalizing transnational economic corridors and deepening strategic bilateral energy partnerships.  
  • Forging robust comprehensive economic agreements with strategic allies ensures secure, long-term procurement contracts and facilitates localized investments in alternative clean-fuel supply chains. 
• CCUS and Deep-Tech Localization: Accelerating the commercial deployment of Carbon Capture, Utilisation, and Storage (CCUS) infrastructure is essential to fundamentally decouple heavy industrial growth from imported emission-intensive fuels.  
  • Fostering a localized deep-tech ecosystem through targeted budgetary outlays and private capital mobilization will catalyze the decarbonization of hard-to-abate sectors while advancing long-term fiscal consolidation. 
• Import Substitution via Green Mandates: Enforcing mandatory green hydrogen consumption quotas in legacy fertilizer and refinery sectors will structurally substitute imported natural gas with domestically produced clean molecules.  
  • This strategic transition not only insulates the agricultural economy from global spot market volatility but also structurally reduces the sovereign subsidy burden, creating a robust macroeconomic buffer. 
• Comprehensive Critical Minerals Statecraft: Securing sovereign equity in overseas critical mineral assets and establishing a localized, circular processing economy is critical to preventing new dependencies in the clean energy transition.  
  • Deploying sovereign wealth funds to acquire strategic mining rights and incentivizing domestic metallurgical R&D will ensure uninterrupted supply chains for grid-scale battery storage ecosystems. 
• Structural Discom Unbundling: Resolving the chronic financial fragility of state distribution companies through structural unbundling and the privatization of loss-making circles is a prerequisite for seamless renewable integration.  
  • Implementing smart-metering, dynamic time-of-day pricing, and massive upgrades in transmission infrastructure will attract necessary private capital for utility-scale battery storage. 
• Decentralized Bio-Energy Integration: Synergizing decentralized bio-energy generation with natural farming practices offers a multidimensional solution to rural energy poverty and agricultural residue management.  
  • Incentivizing the conversion of agricultural biomass into compressed biogas (CBG) establishes localized circular economies while structurally reducing the overarching national reliance on imported liquefied petroleum gas. 
• Indigenous SMR Commercialization: Pivoting toward localized Small Modular Reactors (SMRs) through active private sector participation is vital for establishing a reliable, zero-emission baseload that complements intermittent renewables.  
  • Streamlining the regulatory architecture to permit public-private joint ventures in nuclear generation will rapidly scale non-fossil capacity, structurally displacing imported thermal coal from the grid.

Conclusion:  

India’s energy security is no longer a peripheral environmental goal but a core strategic imperative necessitated by volatile global supply chains and the effectively closed Strait of Hormuz. By synchronizing statutory storage mandates with deep-tech transitions like Green Hydrogen and SMRs, the nation can fundamentally decouple its economic growth from imported geopolitical risks. Ultimately, the transition to a non-fossil baseload represents India’s most credible long-term defense against external energy coercion. 

Drishti Mains Question:

Discuss the role of diversification of energy sources and supply chains in strengthening India’s energy security.

 

FAQs

1. What is the current 'net import cover' of India’s SPR?
It stands at 9–10 days, significantly lower than the IEA’s 90-day global benchmark. 

2. How does the Strait of Hormuz impact India?
It is the transit route for over 50% of India’s crude and 55% of its LNG imports. 

3. What was the allocation for CCUS in the 2026-27 Budget?
The Union Budget 2026-27 explicitly allocated ₹20,000 crore for CCUS infrastructure. 

4. What is the primary hurdle for India’s EV transition? 
High import dependency (nearly 100%) on critical minerals like Lithium and Cobalt, largely processed in China. 

5. How can Green Hydrogen support food security?
By replacing imported LNG in fertilizer production, reducing the massive $30 billion subsidy bill. 

UPSC Civil Services Examination, Previous Year Question (PYQ) 

Prelims

Q. With reference to the Indian Renewable Energy Development Agency Limited (IREDA), which of the following statements is/are correct? (2015)

1. It is a Public Limited Government Company.  
2. It is a Non-Banking Financial Company.  

Select the correct answer using the code given below:   

(a) 1 only   

(b) 2 only   

(c) Both 1 and 2   

(d) Neither 1 nor 2   

Ans: (c)

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Mains

Q. “Access to affordable, reliable, sustainable and modern energy is the sine qua non to achieve Sustainable Development Goals (SDGs)”.Comment on the progress made in India in this regard. (2018)