A parliamentary committee has raised serious concerns about India’s heavy reliance on imported crude oil and the associated geopolitical risks, urging the government to ramp up diversification of supply sources and strengthen risk management mechanisms to secure long-term energy stability. The Public Undertaking Committee’s findings were presented in Parliament last week, highlighting India’s vulnerability to global disruptions following conflicts, sanctions and shipping route interruptions.
According to the report, India meets nearly 89% of its crude oil requirements through imports, leaving the economy exposed to turmoil in oil-producing regions and blockages of key maritime channels such as the Suez Canal and the Red Sea. The committee noted that recent events like the Russia-Ukraine war and tensions in West Asia have underlined the fragility of India’s energy supply chain and the strategic importance of reducing dependence on limited sources.
To mitigate such risks, the panel recommended that the Ministry of Petroleum and Natural Gas (MoPNG) and state-run oil companies intensify efforts to diversify crude procurement both geographically and contractually. It also emphasised bolstering strategic petroleum reserves and pursuing alternative import routes to safeguard against future global shocks. The committee stressed the need to institutionalise advanced risk management tools, including hedging strategies and flexible term contracts, to enable proactive responses to price volatility and supply uncertainties.
Members pointed out that uncertainty in crude availability could adversely impact supply smoothness and pricing domestically, with ripple effects on economic growth and inflation. The report additionally highlighted environmental issues intrinsic to oil and gas operations, including greenhouse gas emissions and pollution concerns. Policymakers are expected to consider the panel’s recommendations as global tensions persist and energy security becomes an increasingly critical policy priority.
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