In Focus: Powering Progress Through Energy Diversification
With conflicts across the world continuing to disrupt global trade and energy markets, India has had to navigate a challenging economic environment marked by rising fuel prices, costlier imports and a weakening rupee. These external pressures have exposed the country’s vulnerability to global supply chain disruptions, particularly in the energy sector, while reinforcing the need to reduce dependence on imported fossil fuels. At the same time, India has remained committed to its long-term vision of becoming both economically self-reliant and environmentally sustainable.
This vision is reflected in the Viksit Bharat Mission, which sets an ambitious target of achieving net-zero emissions by 2070, supported by interim milestones for 2030 and 2047. Achieving these goals will require a fundamental transformation of India’s energy landscape. According to a 2025 EY-CII report, India will need to nearly triple its primary energy supply by 2047 to sustain economic growth, while expanding its non-fossil energy capacity by almost forty times. Such an expansion is essential if nearly two-thirds of the country’s energy demand is to be met through clean sources by the centenary of India’s independence.
Against this backdrop, India’s energy strategy has evolved beyond simply increasing generation capacity. Today, the focus is equally on strengthening energy security, diversifying supply sources, reducing import dependence and investing in technologies that can support long-term decarbonisation. Rather than relying on a single solution, the country is pursuing multiple pathways simultaneously, recognising that resilience will come from diversification.
Strengthening Energy Security in an Uncertain World
The importance of strengthening domestic energy security became particularly evident during the peak of the Iran-US conflict. With the closure of the Strait of Hormuz severely disrupting global LPG shipments, India faced soaring import costs and growing concerns over fuel availability. The episode served as a stark reminder of the country’s continued exposure to geopolitical developments far beyond its borders.
In response, the Government of India accelerated its push for Piped Natural Gas (PNG) as a more reliable and domestically distributed alternative to Liquefied Petroleum Gas (LPG). The initiative quickly gained momentum, with more than 5.58 lakh households registering for new PNG connections during March and April alone. Beyond providing consumers with greater protection from volatile international fuel markets, the expansion of PNG also supports India’s broader objective of building a cleaner, more resilient and self-sufficient energy ecosystem.
Reducing dependence on imported crude oil and natural gas has therefore become both an economic necessity and a strategic priority. Alongside strengthening domestic energy security, India is steadily diversifying its energy mix by expanding renewable energy sources such as solar, wind and hydropower, while simultaneously increasing investment in non-conventional sources including nuclear energy. This dual approach aims to ensure reliable energy access while supporting long-term decarbonisation goals and insulating the economy from geopolitical disruptions that continue to impact global fuel markets.
Building the Energy System of the Future
Among the various pillars of India’s evolving energy strategy, nuclear energy has assumed increasing importance. The country’s growing emphasis on the sector has already been covered extensively in Aakhya Weekly Issues #150 and #157. More recently, attention has shifted to the world’s first nuclear hydrogen plant at Kalpakkam, marking another significant milestone in India’s clean energy journey.
While the project has attracted global recognition as a technological first, its significance extends well beyond that achievement. It represents an important step towards developing integrated energy hubs capable of producing hydrogen, a strategic industrial fuel expected to play a central role in decarbonising sectors such as steel, fertilisers, chemicals and heavy transport. Although large-scale commercial deployment remains some distance away, the project demonstrates India’s ambition to establish leadership in next-generation energy technologies while building domestic capabilities for the emerging hydrogen economy.
At the same time, India is seeking to make better use of its abundant domestic coal reserves through cleaner and more efficient technologies. Rather than abandoning coal altogether, policymakers are attempting to extract greater value from the resource while reducing its environmental impact. This has brought renewed attention to the concept of Coal Gasification Valleys, networked industrial clusters centred around coal-rich regions where coal conversion plants, chemical manufacturing facilities and energy production units are co-located. By integrating these industries within a single ecosystem, the model seeks to reduce transportation costs, improve operational efficiency and create value-added downstream industries.
Driving this transition is the National Coal Gasification Mission, which aims to gasify 100 million tonnes of coal annually by 2030, with the target rising to 250 million tonnes by 2047. To support this ambition, the Government has committed ₹8,500 crore towards eight coal gasification projects that will collectively create around 12 million tonnes of production capacity. A further ₹37,500 crore has been earmarked for future investment, signalling a long-term commitment to developing a domestic coal-based chemicals and clean fuels industry while reducing reliance on imported oil and natural gas.
The transport sector is also undergoing significant change. As global fuel prices have remained volatile, India has accelerated its ethanol blending programme to reduce crude oil imports while lowering transport-related emissions. The most notable development has been the introduction of 85% ethanol-blended fuel in parts of the Delhi NCR region and Maharashtra. Although the fuel is priced lower than the existing E20 blend, it has also generated considerable debate regarding its compatibility with conventional vehicles. Concerns have centred on reduced fuel efficiency, increased wear and tear on engine components, and the potential impact on vehicles not originally designed to function on such high ethanol concentrations.
Addressing these concerns, the Minister of Petroleum and Natural Gas stated that automobile manufacturers had been consulted and were supportive of the rollout. According to the Ministry, higher ethanol blending is expected to reduce pollution while lowering India’s dependence on imported crude oil, making it both an environmental and an energy security measure.
Diversification as India’s Long-Term Energy Strategy
Taken together, these initiatives illustrate a much broader transformation of India’s energy policy. Diversification is no longer limited to expanding domestic energy production through nuclear power, renewable energy or coal gasification; it also encompasses securing more resilient import supply chains and reducing strategic vulnerabilities.
Recognising the geopolitical risks associated with major maritime chokepoints such as the Strait of Hormuz, India has steadily broadened its network of crude oil suppliers over the past several years. Today, nearly 70% of the country’s crude oil imports originate from sources outside the Strait, significantly reducing exposure to regional conflicts and supply disruptions. This diversification of import sources complements domestic efforts to expand clean energy generation and improve energy resilience.
From expanding its fleet of nuclear reactors and investing in large-scale solar parks, hydropower projects and wind farms to promoting ethanol blending, coal gasification and emerging technologies such as nuclear hydrogen, India is pursuing a genuinely multi-pronged approach to strengthening energy security. Each pathway presents its own technological, economic and environmental trade-offs, and many continue to generate healthy public debate regarding cost, feasibility and long-term sustainability.
Viewed collectively, however, these initiatives reveal a clear national strategy. India is not relying on a single technology or fuel source to achieve its ambitions; instead, it is building a diversified energy system that balances security, affordability and sustainability. In an increasingly uncertain geopolitical landscape, diversification is no longer simply an energy policy objective; it has become a strategic imperative for safeguarding India’s long-term economic growth, environmental commitments and energy independence.
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