In March 2026, the international community saw the worst oil price surge, as price rose up to $120 per barrel within weeks. The Strait of Hormuz, which accounts for 25 per cent of global maritime oil trade and for about two-thirds of India's oil imports and half of its LNG supplies, emerged as the critical chokepoint. The unpredictability of the conflict significantly enhanced energy sector vulnerability and coerced countries to pursue alternative supplies.
India imports more than 87 per cent of its crude oil to address its energy needs. As the world's third-largest oil consumer, New Delhi has been structurally exposed to a chronically volatile region. What the 2026 West Asian geopolitical crisis didn't create was vulnerability. Instead, it ensured that India couldn't afford to ignore either the diversification of its energy portfolio or the structural vulnerabilities deepening that dependence.
The question then is not whether India needs to urgently address its energy insecurity challenge. It undoubtedly does. The question is whether India can treat this episode like many other developed countries treated their past episodes—namely, as a wake-up call. Just as the oil crisis of the '70s transformed energy policies of OECD countries and the Russia-Ukraine conflict exposed the structural weakness in Europe’s energy landscape and galvanised Europe's clean energy transition, the 2026 crisis presents India with its own inflection point.
India’s committed energy revolution
India's renewable energy story is more remarkable than most perceive, and the numbers speak for themselves. As of March 2026, India reached 283 GW of total installed renewable energy capacity. In July 2025, renewable energy sources generated more than half of India's total electricity demand for the very first time. India expanded its renewable capacity at nearly 11 per cent compounded annually over the past decade. But the renewables are only part of the story.
The biofuel industry in India is equally impressive. By the end of 2025, India achieved the 19 per cent mark in ethanol blending in petrol, initially expected by 2030. Each percentage point of blending represents less crude being imported, less foreign currency spent, and additional economic value flowing straight to the Indian agriculture sector.
Green hydrogen may still be in the early stages, yet initiatives such as the National Green Hydrogen Mission, funded with ₹19,744 crores of government outlay, show that it is moving from policy ambition to commercial reality. Recent government auctions of green ammonia yielded record-low prices, demonstrating that this energy source has become cost-competitive. Industrial investment is following, and the infrastructural backbone is taking shape. This is a demonstrated capacity to execute large-scale projects.
Where India still lags
Acknowledging India's achievements in energy development is easier. According to the IEA, China's strategic petroleum reserves are equivalent to 1.2 to 1.3 billion barrels of crude. India's present reserve capacity is 5.3 million metric tons, which means we can cover energy demand for fewer than nine days. Although this number is planned to increase, it is too modest for an emerging power with India's degree of import reliance and international aspirations.
The state of manufacturing in India looks similarly underwhelming. The Production Linked Incentive scheme attracted investments to 14 sectors. However, manufacturing contributes merely 13 per cent of GDP, down from 2015's levels.
There is still considerable distance (supply chain, skilled labour and knowhow) to go between the launch of the program and the tangible benefits it brings. The fact that Apple is able to assemble iPhones in Tamil Nadu is a commendable achievement. However, building the deeper ecosystem remains largely absent.
These are not mistakes of policy design. They are mistakes of implementation speed. And while global geopolitics continues to provide us with recurring crises, implementation speed is all that matters.
Diplomacy is energy policy too
Following the prime minister’s visit to the UAE in May 2026, both counterparts negotiated new long-term deals for liquefied petroleum gas supplies. It also increased current collaboration on strategic petroleum reserves, ensuring bilateral partnerships worth more than $101 billion in commerce. Apart from these economic opportunities, they represent the very basis of energy security: having a multitude of supplier countries, with each of them being sufficiently reliable to mitigate possible disturbances elsewhere.
India's energy diplomacy has historically been pragmatic, acquiring secured Russian oil when available, keeping strong links in the Gulf, and diversifying sources as required. The India-UK Free Trade Agreement, signed in July 2025, and current EU discussions illustrate a new paradigm in economic relations: less reliant on a single trading partner.
From energy vulnerability to Viksit Bharat
India has the potential to generate up to a quarter of the domestic energy demand growth until 2047. The government needs to leverage this burden and convert it into a sustainable and secure future. India in 2047 may exert enormous influence in global markets, attract technology partners, and negotiate from a position of strength rather than weakness.
Yet again, this potential requires action. Namely, accelerating the growth of the things India has been doing successfully all along: renewable energy, biofuels, green hydrogen, strategic reserves, supplier diversification. And admitting the existence of weaknesses: lack of depth in manufacturing capabilities, inadequate capacity of strategic reserves, inability to move quickly enough.
Ten years ago, India's energy security was defined by vulnerability – managing oil import bills, surviving oil crises and wishing for stability of global politics.
Now the country is finally able to address them with proper tools and solutions, which allow it to stop worrying and start planning.
(The author is Assistant Professor, School of Liberal Studies and Humanities, UPES.)
