India’s energy balancing act

Any country that dreams of growth and prosperity must ensure that its energy requirements are well taken care of. The energy needed for the wheels of progress must be uninterrupted and continuous so that a long-term perspective can be taken when planning future requirements. Indeed, India has done well to isolate itself from the shocks of geopolitics and uncertainties in the supply chain by diversifying its energy sources. However, that said, this is not a very long-term solution to energy requirements. India’s approach to managing its energy needs raises critical questions about sustainability, resilience, and long-term planning.

Union Petroleum and Natural Gas Minister Hardeep Singh Puri was right when he underlined a stark reality: while fuel prices have surged across major global economies, India has largely shielded its citizens from the worst shocks.

This was achieved by the government through calibrated excise duties, diversification of crude oil sources, and long-term supply contracts. This outcome was achieved largely because public sector oil marketing companies absorbed the impact of global price fluctuations. These measures have helped insulate domestic consumers, but they have also imposed fiscal and balance-sheet pressures that cannot be ignored indefinitely. Therefore, identifying alternatives to achieve energy self-reliance is an imperative that can no longer be postponed.

India today is the world’s third-largest energy consumer. Rising energy requirements come from increased mobility, higher income levels, and greater consumption of various goods and services. This increase in energy demand is not going to flatten but will continue to rise. The challenge, therefore, is not merely price stability, but ensuring energy security without compromising growth.

Though Puri’s assertion that energy transition, energy security, and system resilience must move together is pragmatic, at this point in time it looks a challenging task. India’s rapid push towards renewables is significant, but it has been accompanied by under-investment in oil and gas. The mix of conventional and non-conventional energy must continue for some time. Conventional fuels cannot simply be wished away. For India, where affordability remains a development imperative, conventional fuels will continue to play a stabilising role for years to come, as the price of non-conventional energy sources is still on the higher side.

Solar and wind power need complementary investments in storage, grid modernisation, and flexible generation. Green hydrogen, biofuels, ethanol blending, and compressed biogas offer promising alternatives, but require clearer pricing signals, faster regulatory approvals, and stronger private sector participation. Without these, renewables risk remaining an add-on rather than a true substitute. The government’s management of recent turbulence has been effective, but the harder test lies ahead. Price stability cannot rely forever on fiscal buffers, and energy security cannot be achieved without accelerating innovation, efficiency, and domestic capacity.