India’s Energy Strategy

March 11, 2025

Recently, India is enhancing its energy procurement strategy, particularly from the United States. This shift comes amid rising global energy demands and geopolitical tensions. Prime Minister Narendra Modi’s discussions with U.S. President Donald Trump mark commitment to increase oil and natural gas imports. India aims to secure its energy future while diversifying its sources.

Current Energy Landscape

India is the world’s third-largest oil importer. Over 85% of its crude oil needs are met through imports. In 2024, India’s energy purchases from the U.S. are expected to rise from $15 billion to $25 billion. The U.S. exported approximately 357,000 barrels of crude oil per day to India in February 2025. This increase in imports aims to boost energy ties and contribute to doubling bilateral trade.

Liquefied Natural Gas (LNG) Supply

India is keen to enhance its liquefied natural gas imports. The objective is to establish the U.S. as a leading supplier of LNG. In 2023-24, India imported 31.80 billion cubic metres of LNG. The government aims to increase natural gas consumption from 6% to 15% by diversifying supply sources. The U.S. has emerged as LNG supplier, especially as European nations reconsider their energy strategies.

Domestic Production and Import Dependence

India’s domestic crude oil production accounts for less than 13% of its requirements. In 2023-24, India imported 234.26 million tonnes of crude oil. The import bill decreased to $133.37 billion due to lower international prices. Despite a reduction in costs, India’s dependency on imported oil continues to rise, reaching 87.8%.

Strategic Partnerships and Infrastructure Development

The Government of India is focused on developing energy infrastructure. Enhanced cooperation with U.S. energy companies is essential. Investments in oil and gas infrastructure will support supply diversification and energy security. Additionally, India seeks full membership in the International Energy Agency to strengthen its energy strategy further.

Future Energy Roadmap

India’s energy roadmap includes reducing import dependency and increasing the use of renewable sources. The government promotes alternatives such as ethanol and biodiesel. Significant infrastructure development is underway to support this transition. The goal is to prepare for a future where both domestic production and renewable energy play crucial roles.

Geopolitical Implications

India’s energy strategy is influenced by global geopolitics. The ongoing situation in Ukraine has altered energy supply dynamics. While India seeks to enhance ties with the U.S., it also continues to engage with other suppliers, including Russia. The diversification of energy sources is vital for India to mitigate risks associated with geopolitical tensions.

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