For India, the energy challenge is urgent, step up to it

📌 Summary:

• Context: The US war on Iran and the consequent fall in the rupee have prompted a rethink on the Indian economy; the rupee's slide is not the root problem but a symptom of deeper weaknesses — chief among them India's high and rising dependence on imported energy

• Core argument: Short-term austerity (work-from-home, conservation appeals) is insufficient; structural action on supply, sourcing and consumption of energy is urgent

• Causal chain — why energy import dependence weakens the economy: (1) Geopolitical shock (Iran war, Strait of Hormuz risk) → spike in crude prices → larger import bill → wider current account deficit (2) Wider CAD → rupee depreciation → costlier imports of crude, LNG, fertiliser, electronics → imported inflation (3) Imported inflation → higher fuel/fertiliser subsidies → fiscal pressure → squeezed capex space (4) Higher input costs → margin compression for industry → lower competitiveness

• Key data: • Per-capita electricity consumption rose 46% between 2013-14 and 2023-24 • Coal accounts for ~79% of domestic energy supply (2024-25); net import dependency for coal already >23% and rising • Crude oil import dependency: ~90% (up from ~85% a decade ago) • Natural gas import dependency: ~50% (up from ~40% a decade ago) • India ranks 4th globally in renewable installed capacity, 4th in wind, 3rd in solar

• Historical/comparative precedent: 2022-23 Russia-Ukraine war showed how an external energy shock could blow up the fertiliser and oil import bills; India is repeating the pattern

• India's specific vulnerability: One of the largest coal reserves in the world, yet rising coal imports; near-total exposure on crude (90%) and growing exposure on gas (50%) make every West Asian shock a macro-shock for India

• Solutions proposed: • Accelerate domestic exploration and production of coal, oil and gas; reduce net import dependency • Step up the renewables build-out (solar, wind) and grid integration • Re-think energy demand — shift cooking to domestically-produced electricity (away from imported LNG), build public transport that reduces private car/fuel use • PM Modi met council of ministers on return from his five-nation tour to review alternative energy sources

• International angle: India's energy-import profile compares unfavourably with the energy-secure G7; the war highlights how net-importer status structurally limits strategic autonomy

🎯 UPSC Relevance: GS3 — Environment & Biodiversity (energy transition, renewables), Internal Security (energy security), Economy (forex, CAD, inflation linkages).

🔑 Key Term: Net Energy Import Dependency — share of a country's total energy requirement that is met through imports; for India: ~90% in crude oil, ~50% in natural gas, >23% in coal as of 2025-26.