Powering Resilience: India’s long-term energy strategy

Operation Epic Fury has had an impact of epic proportions on world energy prices, sending crude oil prices skyrocketing to $120 per barrel just a few days ago. Since then, prices have remained volatile, keeping the entire energy market on edge.

At the centre of global concern lies the Strait of Hormuz, the world’s most critical chokepoint, through which nearly one-fifth of global crude oil passes. The Strait of Hormuz matters significantly for India’s energy supplies, but things currently look manageable. Over the last 11 years, India has actively diversified the sources of its energy imports. India has also worked to change the mix of its energy sources, strongly pushing domestically generated renewable energy.

Imagine if this crisis had hit India a decade ago. With almost all our oil and gas coming from the same volatile region and no real alternatives in place, the impact would have been devastating. Petrol and diesel prices would have shot up overnight, crippling transport and pushing inflation through the roof. India has relatively remained insulated from the churn caused by the crisis. 

In comparison, other countries are struggling significantly. Japan, already burdened by record-high public debt, has become one of the most vulnerable economies. The gas-reliant UK has seen immediate price spikes leading to renewed inflation. Nations like Egypt and Turkey are confronting fresh inflationary pressures. Singapore is dealing with sharp increases in electricity and petrol costs, while South Korea has resorted to imposing a fuel price cap for the first time in nearly three decades to stabilise its economy amid the oil surge.

The current crisis, therefore, offers an important reminder: India’s relative resilience today is not accidental. It is the result of deliberate policy choices made over the past decade under Prime Minister Narendra Modi to diversify energy sources and strengthen domestic capacity.

In today’s interconnected world, no country can be fully self-sufficient in energy. Even advanced economies rely on global supply chains for fuel, technology and critical minerals. The real challenge is not eliminating dependence, but ensuring that a single disruption does not cripple the entire system.

Over the past decade, India has steadily moved in that direction. Through a strategy of multi-alignment diplomacy,the country has expanded its crude sourcing network from 27 countries to over 40, reducing reliance on any single supplier or region. In the event of supply disruptions in one part of the world, this broader network provides India with greater flexibility to adjust.

Thus, not putting all eggs in the same basket has helped us sail through. At the same time, India has accelerated the expansion of its domestic energy capacity. The country’s total installed electricity capacity has more than doubled in the past 11 years and now crossed 520 GW, with more than half coming from non-fossil fuel sources, including renewable energy, hydro and nuclear power. Without this rapid expansion of clean energy, India would today be far more dependent on imported fuels to meet rising electricity demand.

One of the other most visible examples of this shift is the PM Surya Ghar Muft Bijli Yojana, which aims to install rooftop solar panels in one crore households. This has enabled families to generate their own electricity, promoted decentralised energy production and reduced pressure on conventional power sources.

Beyond lowering household electricity bills, the programme carries significant long-term economic and environmental benefits. The initiative is expected to save the Government nearly INR 75,000 crore annually in electricity costs, highlighting how clean energy expansion can simultaneously strengthen fiscal efficiency and sustainability.

Without such decentralised solar expansion, rising electricity demand would have placed greater pressure on fossil-fuel-based power generation, increasing fuel imports and making India far more vulnerable to global energy disruptions like those unfolding today.

Such initiatives have also begun to influence household energy behaviour. As rooftop solar expands and electricity becomes cheaper, families may increasingly rely on electric appliances for cooking and other daily needs. Over time, this shift could reduce India’s dependence on imported LPG as well.

Alongside renewable electricity generation, India is also transforming its mobility sector through EVs. This shift is strategically important because the transport sector accounts for a significant share of India’s oil consumption, meaning that electrifying mobility can gradually reduce long-term crude oil demand. Reflecting this transition, India’s EV sector has expanded rapidly from just 2,600 electric vehicles in 2014 to 16.71 lakh EV sales in 2025, signalling the growing adoption of clean mobility.

Government policies have played a crucial role in this transition. The FAME-I scheme (2015) supported around 2.78 lakh EVs, saving nearly 50 million litres of fuel.As EV adoption grows, its impact goes beyond cleaner transport. Over time, greater electric mobility will reduce India’s dependence on imported oil, making the country less vulnerable to global disruptions like those currently unfolding in the Middle East. If the rapid expansion of electric vehicles had not taken place over the past decade, India would have been in a tight spot. India would be even more dependent on petrol and diesel for transportation, exposing the economy to sharper fuel price spikes and a much larger import bill at a time when global energy markets are already under severe stress.

The integration of renewable energy with electric mobility creates a powerful multiplier effect. Electric vehicles already have significantly lower operating costs than petrol or diesel vehicles. When EVs are charged using solar power generated at home, transportation becomes not only cleaner but also significantly cheaper. The broader impact is both economic and strategic. Lower fuel imports not only improve air quality and mobility but also shield the economy from external oil shocks like those currently unfolding in global energy markets.

India has also strengthened its Strategic Petroleum Reserve (SPR) capacity over the past decade to prepare for supply disruptions during geopolitical crises. Under PM Modi, India expanded its emergency oil storage infrastructure with strategic reserves at Visakhapatnam, Mangaluru, and Padur, while initiating additional facilities at Chandikholand Padur Phase-II. As a result, India today has oil reserves that can sustain the country for around 74 days when strategic reserves are combined with commercial inventories.

A decade ago, however, India’s emergency crude reserves could barely cover 13 days of demand, leaving the economy far more exposed to sudden import shocks. The expansion of strategic reserves has therefore placed India in a significantly stronger position to manage supply disruptions and price volatility during crises like the one currently unfolding in global energy markets.

In a world where geopolitical tensions can disrupt global energy supply chains overnight, true resilience is not something built during a crisis. It must be forged years in advance through foresight, strategic planning, and decisive action. India’s decade-long push for energy diversification under PM Modi, including diversifying import sources and routes, building strong long-term global partnerships, making massive investments in domestic infrastructure, and accelerating the shift to renewables, is now clearly proving its value.

As the Hormuz crisis reveals vulnerabilities across the globe, India’s preparations have significantly softened the impact compared to many other nations. This moment underscores why proactive self-reliance in energy is more critical than ever. In an unpredictable world, such forward-thinking strategies remain the strongest defence against sudden economic shocks.