Author: Shristi Sahu, 4th year student at NATIONAL UNIVERSITY OF STUDY AND RESEARCH IN LAW
INTRODUCTION
Energy has become more than a developmental need, it has become a strategic tool in the national resilience. The growing awareness that fuel dependence is not a purely economic issue but one of sovereignty and national security is evident in Prime Minister Narendra Modi’s call to use fuel imports “with great restraint”.
India’s energy governance has focussed on reliability and cost-effectiveness. Energy security is related to, but on a different level as energy sovereignty. The former is based on global integration to secure stable and affordable supply, while the latter focuses on decreasing reliance on outside sources by building up domestic capabilities. Despite a low per capita consumption, India’s energy demand is projected to increase from 3,858 b/d in 2018 to 5,740 b/d in 2025, and 5,990 b/d in 2026, due to the growth of energy consumption in metropolitan areas and economic expansion (Organization of the Petroleum Exporting Countries).
India’s contribution to the global primary energy consumption is expected to increase from 6.1% in 2021 to 9.8% by 2050 (IEA World Energy Outlook 2021). The energy security agenda has always been focused on supply assurance and price competitiveness, but with all the global disruptions , it is now a new priority – from access to control .Therefore, the shift towards energy sovereignty is not only a policy decision but a strategic imperative in light of the realities of the world and the country.
THE WAKE-UP CALL
The India’s energy shortages arise due to the rapid economic growth and population growth, which has made India the third largest energy consumer in the world. Despite the state effort to expand LPG access and consumption, domestic production remains much behind and import dependence structural.
Concurrently, there has been an increase in the level of imports dependence in this expansion. India ‘s dependency on the energy imports remaind significant . As per IEA the imports of Crude Oil and Natural Gas are high, close to 89% and 46.60% respectively during FY 2023-2024 and also a significant share of India’s crude oil and natural gas needs are met from overseas sources which result in a rising import bill. This, in turn, puts stress on the balance of payments and can lead to an increasing trade deficit, especially when world energy prices are high.
The Russia-Ukraine war has brought a new dynamic to energy markets, highlighting the vulnerability of India’s LPG sector. The LPG crisis of 2026 became a turning point, marked by significant disruptions in global supply chains and conflicts over critical transportation routes, which led to severe shortages and price fluctuations. India being made up of 85% crude oil import, the dependence on external shocks was seen with a lot of the crude oil passing through the Strait of Hormuz. Chief economist of the International Energy Agency (IEA) notes that the current geoeconomic crisis is more severe than the 1973, 1979 and 2022 shocks combined, highlighting the need to move toward a more resilient energy system, based on domestic capacity and diversified supply chains.
ENERGY SECURITY CHALLENGES
India’s pursuit of energy security is constrained by multiple interrelated challenges.
Firstly , As the demand side is increasing the supply side is creating an hurdle . The economic growth has been very swift and consumption has risen considerably, but domestic supply has not risen as fast. This overall imbalance keeps putting pressure on imports, leaving the current state of energy security as a reactive one, not a sustainable one.
Second, India’s strategic petroleum reserves are structurally deficient to cope with extended disruptions. Reserves of around 9.5 days to cover crude oil demand are extremely low and are operating at almost 64% capacity, which leaves the country highly vulnerable in case of a geopolitical crisis or crude oil supply shock. This void creates a dependence on imports which will not enhance security in the long run.
Third, it is constrained by a paradox of structural tension: whilst the availability of coal, oil and gas provides for reliability, it also represents price volatility and environmental risks to the economy, whereas renewable energy sources such as solar and wind energy are critical to long-term sustainability, but are subject to risks of intermittency, storage limitations and grid constraints.
Energy shocks, be they due to geopolitical tensions, pandemics or market fluctuations, exacerbate India’s structural weaknesses by leading to disruptions in energy supply chains, rising prices and heightened fiscal pressures. Because of its dependence on imported commodities, especially from West Asia and India, India is highly vulnerable to war-like situations like the Gulf War and Iraq War, which have resulted in swing in the prices, shortage of supplies, inflationary pressures, depreciation of currency and overall economic distress.
DEPENDENCE AND CONSEQUENCES
The Indian energy market is highly vulnerable to geopolitics and market volatility as a whole and Indian energy dependency is closely linked with global energy supply chains of imported crude oil, natural gas and LPG. Domestic policies to enhance energy access have had unintended consequences. Clean cooking schemes like the the Pradhan Mantri Ujjwala Yojana, which aimed to connect to more than 80 million LPG households by 2020, brought a positive shift in access to clean cooking fuels and public health but also boosted the demand for cooking fuels, thereby contributing to a greater import dependence. Efficiency and access programmes, such as the UJALA programme that lowered the cost of LED lamps through mass procurement, and programmes for electrification such as Rajiv Gandhi Vidyutikaran (2005), Deen Dayal Upadhyaya Gram Jyoti Yojana (2014), and Saubhagya (2017), also extended electricity access across the country. The NEP was introduced by the NITI Aayog and aimed for 100% electrification by 2022, while recognising the structural and social barriers that still exist (Sarangi et al, 2019). Despite all the achievements the energy/emission intensity has started to decrease even after the reduction in energy/emission intensity because of such government efforts and interventions despite the growth in the scale of energy demand in the country in recent years.
However, the persistent production-import mismatch indicates that current strategies are not sufficient to meet the increasing demand for food.
INDIA’S POLICIES AND LEGAL FRAMEWORK
The recent legal and policy changes in India indicate a paradigm shift from traditional energy security to a new focus on energy sovereignty, which is about energy production, technology and energy supply chains within the country.
CCTS under the Energy Conservation (Amendment) Act, 2022 and Renewable Purchase Obligations (RPOs) represent the step towards market-driven and regulatory support for clean energy, which has substantially boosted emission reduction efforts and helped India achieve renewable capacity of more than 200 GW.
The NITI Aayog National Energy Policy, 2017, states that energy dependence is a constraint to strategic autonomy and security and independence are highlighted as the main focus of long-term planning.It suggests that actual resilience is about minimizing reliance on imports, developing a diversified energy mix, creating storage and grid resilience, and integrating energy efficiency into long-term economic planning – moving away from the focus on ensuring supply in the short term to a focus on transforming systems over the long term.
To cut reliance on fossil fuels and boost the production capacity of the country, programs like the National Green Hydrogen Mission 2023, FAME and PM E-Drive for electric mobility, and PFI for solar modules and batteries support this effort.
The policy of the strategic petroleum reserve has also shifted to a mix of commercial and emergency utilisation, as the government has permitted commercialisation of Phase-I reserve, and signed an agreement with Abu Dhabi National Oil Company for commercial utilisation at Mangaluru with ISPRL. Further additions at Chandikhol (4mt) and Padur expansion (2.5mt) have been sanctioned and plans for Bikaner and Rajkot are under consideration with capacity of 6mt.
RECOMMENDATIONS
India’s journey towards energy autonomy calls for strengthening of approach for domestic production reforms to achieve energy import independence.
- India has to urgently ramp up the SPR capacity to 90 days as per the IEA requirement. The proposed projects in Bikaner and Rajkot need to be pursued and the model of the commercialisation of ADNOC and ISPRL should be replicated to provide revenue generation without compromising the emergency availability.
- Moving away from the ideology of energy security to energy sovereignty, by explicitly declaring energy sovereignty as a national goal, this would support institutional coherence and energy policy predictability over the long-term.
- Deepen PLI Schemes: PLI schemes for solar modules, advanced batteries and electrolysers need to be deepened to reduce reliance on imported clean energy technology and make India a global manufacturer of clean energy.
India needs to further strengthen its relationship with international energy bodies, while also protecting national interests.
CONCLUSION
The energy trajectory of India is an interesting one of great ambition facing structural vulnerability. India’s vision in policy making is exemplified by the PMUY’s initiative to increase access to LPG and the National Green Hydrogen Mission’s ambitious 2030 goal. However, the dependence on imports is still at a high level, reserves are still at an alarmingly low level and the legal structure is still weak.
The LPG crisis of 2026 and the regular geopolitical shocks has proved that dependence on energy is the ultimate problem in securing supply for India’s path – through domestic production, diversified reserves and changing the mindset of the law. Energy sovereignty is not an option anymore, it is a necessity and a matter of life and death.
