In view of the recent geopolitical tensions, how can India ensure its energy security? What are the challenges presented by these geo-political tensions? Suggest a way forward.
India is dependent on imports for majority of its fuel supply. The ongoing geopolitical tensions around the world, including Russia-Ukraine war, tensions among gulf nations, have severely impacted India’s energy security.
- Due to the Covid-19 epidemic, major oil-producing nations drastically reduced oil output.
- The supply routes have been hampered by the Russian-Ukrainian war. Additionally, the US’s sanctions against Russia, Iran, and Venezuela have decreased the availability of petroleum on the world market, which has caused price increases.
- Early in October 2022, OPEC decided to reduce oil supply in order to raise prices.
- UAE, another significant oil producer, had drone assaults in January on oil installations.
- An outage on a major oil pipeline linking Saudi Arabia and Turkey exacerbated the situation.
Impact on India:
- Energy security of India is threatened because of sanctions on Iran & Russia.
- The increase in oil prices are increasing the country’s import bill, and further increasing its current account deficit.
- The increase in crude prices could also further increase inflationary pressures that have been building up over the past few months.
- Fiscal Health will be negatively impacted.
- Diversifying India’s energy basket.
- Increasing reliance on sustainable energy resources like solar, wind, etc.
- Increasing production of biofuels like compressed biogas, bio-ethanol.
- Accelerating green hydrogen mission.
The current geopolitical tensions further put even more emphasis on the need to become self-sufficient for energy needs. It is crucial to become resilient of global supply chain disruptions and make India Atmanirbhar.