India's Proactive Energy Strategy

India is taking a proactive role in energy security, aiming to shape regional supply rather than just respond to it. With global energy markets experiencing ongoing volatility and disruptions near key shipping routes, New Delhi is using its refining capacity and diplomatic efforts to build stronger ties and secure its own energy future.

Securing Energy Amid Global Volatility

India relies heavily on imported crude oil, with over 85% of its needs coming from abroad. This makes the country vulnerable to global instability, particularly around the Strait of Hormuz. This key shipping route, through which a significant portion of India's oil imports transit, has become an area of international tension. Recent conflicts in West Asia have raised concerns, leading to price spikes and supply uncertainties. In response, India has prioritized its domestic supply and is revising its export strategy with a "nation first" approach. The government is actively looking at requests from Mauritius and Seychelles, preferring government-to-government (G2G) deals to ensure reliable energy flows. India is finalizing a G2G oil and gas supply deal with Mauritius, which could serve as a model for other countries seeking stable energy partnerships. This energy diplomacy strategy aims to secure supplies for its partners and reinforce India's role as a dependable energy supplier in the Indian Ocean region, thereby increasing its geopolitical influence.

Expanding Energy Diplomacy Across the Region

India's energy diplomacy is becoming a key part of its foreign policy, especially in the Indo-Pacific. While China often favors state-led infrastructure deals, India focuses on political partnerships and building capacity. Both countries, however, compete for resources in important energy-producing regions. New Delhi already supplies significant fuel to neighbors like Bangladesh, Nepal, Bhutan, and Sri Lanka, providing emergency shipments and maintaining existing supply agreements. The requests from Mauritius and Seychelles, and previously from the Maldives, show a growing regional demand for India's energy resources and expertise. Beyond fossil fuels, India is also increasing cooperation in renewable energy. It is supporting Mauritius with solar power projects and exploring technology transfers, aligning with Mauritius's goal to diversify its energy sources towards solar, wind, and green hydrogen. These efforts contribute to India's broader 'MAHASAGAR' vision, which aims to expand its influence and security presence in the Indian Ocean region, acting as a counterbalance to growing external maritime powers.

Underlying Vulnerabilities

Despite India's efforts to find new import sources, its heavy reliance on imported crude oil and LPG remains a significant vulnerability. About 52% of India's crude imports still pass through the Strait of Hormuz, leaving it exposed to price swings and supply interruptions. While diversification has improved its bargaining power, using longer shipping routes can increase costs and transit times. India's strategic petroleum reserves, holding about 9-10 days of consumption, offer limited backup supply compared to global standards. Moreover, prioritizing neighbors' energy needs, especially when supply is tight, could affect domestic availability. India, however, maintains a 'nation first' policy to manage this. Increased competition with China for energy resources also presents a risk.

Future Focus: Sustainability and Security

India's energy strategy is expanding to include broader sustainability goals. The country is actively promoting renewable energy and exploring options like biofuels and green hydrogen. Large-scale electrification of transport and industry is seen as a key step to reduce oil and gas dependence and improve energy security. By building strategic partnerships and strengthening its maritime capabilities, India aims to solidify its role as a security provider and reliable energy partner in the Indo-Pacific. The nation is navigating global energy challenges through a mix of traditional supply deals and forward-looking clean energy projects.