6 min readMar 24, 2026 06:18 AM IST
First published on: Mar 24, 2026 at 06:00 AM IST
The war on Iran and the disruption in oil and gas supplies have starkly shown India’s energy dependence and vulnerability. India imports over 85 per cent of the crude oil it needs and nearly 40 per cent of its natural gas. Being the third-largest importer of crude oil in the world, we are one of the world’s most energy import-dependent economies. Over 40 per cent of India’s oil supply travels through the Strait of Hormuz, a narrow maritime choke point. About a fifth of global oil flows through it. The war has, in effect, closed the Strait of Hormuz. This is driving up oil and gas prices. The crude oil price is now $109 per barrel, up from $65 in mid-February. The longer the war lasts, the higher will be the price rise. The inflationary impact of this sharp oil price spike would be substantial. LPG gas cylinder prices have already been raised in India by Rs 60 for households and Rs 144 for commercial users, who are also fearing disruption of supply. Forty per cent of our LNG comes from Qatar, which has closed its gas export facilities. The curtailment of gas supply has adversely affected production in industrial units that use imported gas.
These developments have highlighted the critical importance of energy security. For decades, we have tried to find more oil and gas reserves to improve our energy security. Success has eluded us. Import dependence has only increased. Our oil and gas imports cost us over $100 billion annually and constitute 25–30 per cent of our total imports. Is there another way of achieving energy security? What would true energy security look like for India?
Our ongoing successful energy transition has created a potential path for achieving energy security and independence. This is a new development with far-reaching positive implications. The goal of the energy transition to net zero is to give up the use of fossil fuels. As the use of imported oil and gas decreases, our vulnerability declines and energy security rises. Therefore, strategic autonomy and security demand that we accelerate our energy transition away from imported oil and gas.
Accelerating the electrification of our economy is a central pillar of the strategy of energy transition. Electricity would replace the use of fossil fuels in the economy to the extent technically feasible. In parallel, the use of fossil fuels in electricity generation would decline. Electricity generation in India primarily uses domestic coal. However, the share of solar and wind power has been rising rapidly. Power generation is increasing with private investment, and prices are stabilising. The pace of power capacity creation can be raised without difficulty.
Accelerating the transition to electric mobility would reduce our need for imported oil. India has already achieved a critical breakthrough in the domestic production of electric vehicles. There is a competitive industry structure. An increasing number of good electric versions of popular brands are now in the market. Consumers are discovering that the cost of running an electric vehicle is lower. India is becoming a global leader in the use of electric buses. What can be done to increase the share of EVs in the market? A feasible decision would be to mandate that all commercial vehicles be electric from prospective dates, beginning with the NCR. Commercial vehicle operators would save money. No mandate for private vehicles is being suggested, and their freedom of choice may be left undisturbed. In the long run, this would have a decisive impact on reducing air pollution.
With the implementation of this decision, commercial transport would cease to be dependent on imported oil, and this vulnerability would be eliminated. We have enough domestic coal, and a large number of coal-fired stations are being built. These, along with renewables, can fully meet the energy needs of all commercial transport. At a conservative estimate, oil imports would come down by over 30 per cent and further as the market share of EVs among private consumers increases. This is already happening.
Anxiety about the availability of gas is leading to a dramatic surge in the purchase of induction stoves. The switchover to the use of electricity for cooking needs to be promoted in a sustained manner. Induction stoves are more energy-efficient. Using electricity at, say, Rs 8 per unit for cooking, is cheaper than gas. The savings for low-income households would be far higher. The rates of electricity for them are low; in some states, there is free electricity of 200–300 units per month. Then there is the PM’s rooftop solar programme for 300 free units per month. Using electricity for all cooking in the country would end dependence on imports and eliminate vulnerability for such an essential necessity.
The key lesson of the present trauma is that we should give up thinking of gas as an intermediate fuel and accelerate our transition away from oil and gas. The sun and wind generate electricity without requiring imports.
However, renewable energy installation requires equipment. For full energy security, India should manufacture all renewable energy equipment and not be dependent on imports. For us, the transition to energy security must also be an industrial transition. Domestic manufacturing of solar panels and batteries with full value-addition should be the goal. In addition to PLI, the government should invite bids for long-term, say 15 years, procurement of solar panels and batteries with full value addition in India from the year the successful bidder can set up a new plant and go into production. It should be prepared to pay a higher price over imports initially. This would lay the foundation for energy-independent manufacturing for the green economy.
For India, the road to energy security runs through the transition away from imported oil and gas and their replacement by electricity.
The writer is distinguished fellow, TERI and author of Rising Ambition: Carving New Pathways – India’s Energy Transition. Victor is research associate, TERI
