Need of Energy Sovereignty for India, Reasons and Impacts

Energy sovereignty is vital for India to reduce import dependence, ensure energy security, promote renewable resources, and achieve sustainable economic growth.

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Context: For India – the world’s third-largest energy consumer – dependence on external sources has become a critical vulnerability. In a fragmented & conflict-prone world, energy sovereignty (the ability to secure uninterrupted, affordable, and indigenous energy) has emerged as the new strategic currency.

India’s Dependence on Imported Energy

Crude Oil: India imports 85% of its crude oil requirement.
Natural Gas: More than 50% of gas demand is imported, much of it through LNG.
Coal: Despite large reserves, India imports ~20–25% of its coal needs, mainly coking coal for steel.
Financial Outflow: In FY23–24, oil and gas imports alone cost India $170 billion (25% of merchandise imports).
Geopolitical Dependence:
- Pre-2022: West Asia supplied >60% of crude.
- Post-Ukraine war: Russia became India’s largest supplier, accounting for 35–40% of crude imports in 2024–25 (up from just 2% before 2022).

Reasons for India’s Energy Dependence

Resource Constraints

Oil & Gas Reserves: India’s proven reserves are limited and depleting.
High Import Needs: Domestic production of crude has stagnated at ~30 MMT/year while demand has crossed 220 MMT/year.

Rising Energy Demand

Driven by urbanisation, industrialisation, and transport growth.
India’s energy demand is expected to double by 2040, making imports even more critical.

Infrastructure and Technology Gaps

Slow progress in domestic oil exploration (due to regulatory hurdles and low investment).
Lack of large-scale renewable storage capacity → continued reliance on fossil fuels.

Policy and Pricing Factors

Domestic energy pricing is often politically sensitive, discouraging private investment.

Impact of Energy Dependence

Economic Impact: Large import bills widen the trade deficit and put pressure on the rupee.
- Fiscal burden rises when subsidies are used to shield consumers from high prices.
Geopolitical Vulnerability: Over-reliance on a few regions (West Asia, now Russia) makes India vulnerable to global conflicts.
- E.g.: June 2025 Israel-Iran tensions nearly disrupted 20 million barrels/day of oil flow, threatening $100+ oil prices.
Energy Insecurity: Supply chain disruptions (wars, sanctions, pandemics) risk shortages and price volatility.
Strategic Risks: Dependence weakens strategic autonomy, as energy access influences foreign policy choices.
Environmental Impact: Import dependence often locks India into fossil fuel reliance, delaying green transition.

India’s Path to Energy Sovereignty

Diversification of Sources: Reduced dependence on West Asia (from >60% of imports to <45%). Enhanced sourcing from Russia, Africa, the U.S., and Latin America.

Five Strategic Pillars for Energy Sovereignty

Coal Gasification & Carbon Capture:
- India has 150+ billion tonnes of coal reserves.
- Gasification can convert coal into syngas, methanol, hydrogen, and fertilisers, reducing import dependence.
Biofuels & Ethanol Blending:
- Ethanol blending programme: Target of 20% blending (E20) by 2025.
- Already transferred ₹92,000 crore to farmers and saved foreign exchange.
- SATAT scheme: 500+ CBG plants generating clean gas and bio-manure to restore degraded soils.
Nuclear Energy:
- Current nuclear capacity: 8.8 GW — stagnant for decades.
- Plans to expand with a thorium roadmap, uranium partnerships, and Small Modular Reactors (SMRs).
- Nuclear provides zero-carbon baseload power to complement renewables.
Green Hydrogen Mission:
- Target: 5 MMT/year by 2030.
- Focus on local electrolyser manufacturing, storage solutions, and technology ownership to avoid external dependence.
Pumped Hydro Storage:
- Critical for balancing renewable energy variability.
- India’s geography allows the creation of large pumped hydro plants as grid stabilisers.

Renewable Energy Push:
- Installed RE capacity: 190 GW (2024), aiming for 500 GW by 2030.
- Solar and wind expansion with global partnerships (ISA, One Sun One World One Grid).
Strategic Petroleum Reserves (SPR): India has built reserves covering ~10 days of imports, with plans to expand.

Energy security is no longer just climate policy but a survival strategy. India must adopt an energy sovereignty doctrine built on diversification, domestic capacity, and resilient infrastructure. The future’s most valuable resource is not oil but uninterrupted, affordable, indigenous energy.