How a unified national framework seeks to strengthen India’s future energy security

From India’s perspective, the West Asia crisis has highlighted a fundamental reality: energy security is no longer about securing fuel only, it is equally about building a system that can absorb shocks. In the last decade, India has taken measures to strengthen its ability to absorb external disruptions.

How far have those measures been effective? How does the recently proposed four-pillar unified national energy framework offer an approach to thinking about India’s future energy security?

India’s ability to absorb shocks

India imports 88 per cent of crude oil and almost half of its natural gas requirement. As one of the fastest growing economies, the country is likely to see a continuous rise in energy demand alongside industrialisation, urbanisation and rising incomes.

The question, therefore, is whether India can reduce its vulnerability to external shocks. In the last decade, the country has created several layers of protection such as diversified crude sources, expanded refining capacity, strategic petroleum reserves, ethanol blending and rapid renewable energy growth. These investments have strengthened India’s ability to absorb external disruptions.

Refining capacity as a strategic strength

India’s refining capacity is often projected as evidence of energy security. It is the world’s fourth-largest refiner and has a refining capacity of roughly 260 million tonnes per annum (mtpa). While a bulk of the petroleum fuels – like petrol and diesel – and petroleum products are consumed within the country, some volumes are also exported. In fact, India is the seventh-largest exporter of refined petroleum products.

Indian refineries are few in the world capable of processing different grades of crude and converting them into petrol, diesel, LPG, aviation fuel and other petroleum products. This operational flexibility gives India an advantage over countries that depend heavily on imports of refined petroleum products. 

Refining capacity, therefore, supports domestic energy availability, industrial activity, exports and foreign-exchange earnings. But refineries remain critically dependent on uninterrupted crude oil supplies. Refining capacity enhances energy resilience when there is secure access to crude oil. 

Diversified crude sources

India’s highly diversified crude sourcing has helped ensure adequate oil, petrol, diesel, and jet fuel availability amid the West Asia crisis. For instance, as supplies from West Asia faltered due to the Strait of Hormuz crisis, India fell back on Russian crude. 

India’s Russian crude imports have increased sharply from around 1 million bpd in February to record highs of about 2.6 million bpd in June, accounting for over 50% of India’s overall oil imports. 

India has expanded the sources of energy supply over the past few years, and now imports oil from over 41 countries. This has helped reduce dependence on West Asian crude and enabled enough stocks of crude oil and petrol, and diesel amid the crisis. 

India’s strategic petroleum reserves (SPRs) – spread across three locations in Andhra Pradesh and Karnataka – are also meant to act as a buffer for short-term supply shocks. But the SPRs are currently holding 3.37 million tonnes of oil, or just about two-thirds of their total storage capacity of 5.33 million tonnes of crude oil. 

In addition, the government last month (July 28) also approved a Rs 84,084-crore ‘Samudra Manthan’ scheme aimed at boosting oil and gas exploration and production from the country’s offshore basins, and reducing dependence on imported energy. 

Ethanol blending 

India’s ethanol-blended petrol programme, which technically spans 2003 to 2026, has largely been seen as a successful energy initiative. Ethanol blending has increased from 1.5 per cent in 2013-14 to 20 per cent in 2025-26. India reached the 20 per cent target five years ahead of the original deadline. 

According to government estimates (as of 31 July 2026), the programme has saved 1.97 lakh crore in foreign exchange, reduced 950 lakh metric tonnes of CO₂ emissions, resulted in 316 lakh metric tonnes of crude oil substitution, and transferred 1.66 lakh crore in payments to farmers and distillers.

These are significant achievements. But much of India’s ethanol still comes from sugarcane and food grains. Therefore, while strengthening farmers’ incomes, it has also raised questions about ground water depletion, land use, food security, and regional concentration. A country that imports energy cannot afford to solve one resource problem by creating another. 

The next phase, therefore, needs to give greater emphasis on the second-generation ethanol produced from agricultural residue, municipal waste and non-food biomass. This would simultaneously reduce stubble burning, expand rural bio-economies, and lower pressure on water-intensive crops. 

Hence, ethanol should not be viewed in isolation. It should be part of a broader strategy that includes electric mobility, green hydrogen, compressed biogas and sustainable aviation fuel. 

Renewable energy 

Moreover, India’s renewable energy expansion has been rapid. Renewable Energy (RE) installed capacity has risen 3.59 times since 2014 – increased from 76.38 GW in March 2014 to 274.68 GW in March 2026. By May 2026, solar power capacity alone had reached 162.15 GW, comprising about 121.25 GW of ground-mounted solar and more than 30 GW of rooftop solar.

These figures represent one of the fastest clean-energy transitions among major economies. Yet expanding the capacity no longer remains India’s principal challenge. The real challenge now is integration into the electricity grid.

Renewable energy generation is concentrated in a few resource-rich states, while electricity demand is spread across industrial centres often located thousands of kilometers away. The result is a paradox. India can simultaneously possess surplus renewable energy capacity and experience power shortages due to inadequate transmission infrastructure. 

The Indian National Science Academy (INSA) underlined that transmission bottlenecks are threatening India’s renewable energy projects. While over 60 GW of commissioned renewable projects have faced transmission constraints, 25GW of gas-based generation capacity remains underutilised. At the same time, coal-fired plants operated at only 68.45% plant load factor in 2024–25, despite continued coal imports.

Therefore, the future of renewable energy will depend on investments in transmission networks, battery storage, pumped hydro grid, flexible power generation, and smarter electricity markets. The energy transition is no longer only about replacing fossil fuels. It is about building an electricity system capable of integrating multiple sources together.

Need for a unified energy approach

India’s energy challenge is no longer the absence of programmes but the absence of effective integration. Over the past few years, the country has launched initiatives for renewable energy, ethanol blending, green hydrogen, electric mobility, coal, natural gas, and energy efficiency. Each initiative has its own value, but energy security cannot be built through isolated policies.

A renewable energy system without adequate transmission infrastructure does not strengthen energy security. A refinery without secure crude supplies remains vulnerable. The expansion of ethanol blending without adequate sustainability can create new pressures.

Against this backdrop, the INSA has proposed a four-pillar framework for a unified energy policy: A Unified National Energy Policy Framework for India: Adequacy, Access, Affordability, and Appropriate Sustainability (2026). The policy brief offers a broader framework for thinking about India’s future energy.

The next phase of India’s energy transition needs to focus on the integration of fuels, technologies, infrastructure, and institutions through a unified national energy policy. Energy security is not merely about keeping vehicles running or industries operating. It is equally about building a resilient and coordinated energy system for protecting economic stability, strengthening national security, and enabling sustainable development.

The West Asia crisis has clearly conveyed that external shocks cannot always be prevented, but their impact can be mitigated through robust preparedness. Now that India has developed many pillars of its energy security, the next challenge is to bring them into a coherent, resilient system.

Post read questions

1. India has made considerable progress in strengthening energy availability, but energy resilience requires deeper institutional integration. Discuss.

2. Discuss the major dimensions of energy security in India in the context of the global energy transition and geopolitical uncertainty.

3. Diversification of crude oil import sources has become an important pillar of India’s foreign and energy policy. Discuss.

4. Are fragmented sectoral policies a constraint to India’s energy security? Examine the need for a Unified National Energy Policy.

5. India’s energy transition is shifting from a challenge of capacity addition to one of systems integration. Critically examine.

(Pushpendra Singh is an Assistant Professor of Economics at Somaiya Vidyavihar University, Mumbai. Archana Singh is Assistant Professor of Gender and Economics at the International Institute for Population Sciences, Mumbai.)

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