Energy diplomacy is a crucial aspect of foreign policy as it aims to secure a nation’s energy needs through international cooperation and strategic partnerships. (Griffiths, 2019) This is especially important in the current global economy, where energy resources are essential for economic growth and stability. India, being the world’s third-largest energy consumer, faces a rapidly increasing energy demand due to its robust economic growth and burgeoning population. (Ahmad, 2014)(Bhagwat, 2021) (Pathak, 2007) This demand has outpaced domestic energy production, making India heavily reliant on energy imports. This article explores India’s energy diplomacy strategies, examining how the nation navigates the complexities of the global energy market to secure the resources necessary for its continued development and prosperity. The analysis will also delve into the challenges India faces, including competition from other energy-hungry nations, geopolitical instability, and the imperative to balance economic growth with environmental sustainability. (Lam-Ya Mostaque, 2022) (Tripathi, 2023)

India’s Energy Landscape

India is the world’s third-largest energy consumer after the United States and China, driven by its rapidly growing population and impressive economic development. Between 2000 and 2014, India’s energy consumption doubled, and by 2017, the country had the third-largest energy demand globally at 753.7 million tonnes of oil equivalent—about a quarter of China’s and a third of the US’s consumption. (Ahmad, 2014) However, India’s energy demand is growing faster than both. By 2030, India is projected to overtake China as the world’s largest growing energy market, with the International Energy Agency (IEA) forecasting that the country will account for 30% of the global energy demand increase up to 2040. By 2035, India is expected to consume 8.6% of global energy, with demand rising by 95% compared to current levels. Specifically, gas demand is anticipated to grow by 183%, oil by 121%, and coal by 108%. (Lam-Ya Mostaque, 2022) (Bhagwat, 2021) (Chauhan, 2019)

India’s energy mix is heavily reliant on fossil fuels, which accounted for 96% of its energy consumption in 2006 and are projected to contribute 74–85% by 2031–32. In 2019, the mix included 55% coal, 30% petroleum and natural gas, 10% hydropower, 6.5% renewable energy, and less than 3% nuclear energy. Coal remains dominant, with 70% of the 955.3 million tonnes consumed in 2019–2020 used for power generation, and the rest supporting industries like steel and cement. Despite having the world’s fourth-largest coal reserves and being the third-largest coal producer, India’s transition to renewables has accelerated in recent years. By February 2021, India’s installed grid-connected power generating capacity reached 381 GW, with 62% from thermal power, 24.5% from renewables, 12.2% from large hydro, and 1.8% from nuclear sources. Renewable energy contributed over 11% to the electricity mix in 2019–2020, with annual capacity additions from renewables surpassing coal-based thermal power since 2017.(Ahmad, 2014) (Bhagwat, 2021) (Ganeshan & Bhattacharjya, 2022)

Challenges

• Energy Security: India faces significant challenges in ensuring its energy security. The country’s energy security is intertwined with global energy markets, which will be dominated by conventional fuels in the coming years.(Ahmad, 2014)
• Import Dependence: India is heavily reliant on energy imports. As of 2014, this accounted for 34.41% of total energy demand. The dependence on imports raises concerns relating to energy security, particularly considering projections that India will need to import half of its fossil fuel requirements by 2018.
  • By 2030, India is projected to be 51% import-dependent for its total energy needs. (Ahmad, 2014)
  • In 2012, India’s oil import dependence was 76%. This figure is expected to reach 87% by 2040, when India’s oil demand is projected to double to 8.2 million barrels per day. (Lam-Ya Mostaque, 2022)
• Transition to Renewables: India is pursuing an ambitious plan for energy transition by aiming to increase the share of renewables in its energy mix. However, the transition poses various challenges:
  • Renewables require rare-earth metals that are scarce in India, and much of the equipment is imported.
  • Renewable energy is currently subsidised, raising concerns about its long-term sustainability.
  • A megawatt equivalent of renewable energy capacity generates less than half the annual energy of a conventional power plant with the same capacity, but requires more land, leading to potential conflicts with forest and agricultural land use.
  • Achieving net-zero emissions, as pledged by India at the COP26 conference, will require careful consideration of the country’s limited energy resources, energy inefficiency, and low per capita emissions. (Bhagwat, 2021)

Geopolitical Significance of Energy Diplomacy

The geopolitical significance of energy diplomacy is paramount in the global economy, where energy resources are essential for economic growth and stability. (Pradhan, 2020)

Key players like OPEC, Russia, and the USA exert considerable influence on global energy dynamics, impacting energy prices and availability worldwide. OPEC, controlling a significant portion of global oil production, holds considerable sway in oil markets, while Russia, a major energy exporter, especially of natural gas to Europe, wields leverage through its vast reserves. The USA, a major consumer and producer, influences global energy markets through its energy policies. India, as a rapidly developing nation with increasing energy demands, is heavily reliant on energy imports, making it vulnerable to geopolitical tensions and disruptions in energy trade routes.(Yadav, 2008)

For instance, the Strait of Hormuz, a critical chokepoint for global oil transport, poses a significant risk to India’s energy security, as a large proportion of its oil imports transit through this waterway.(Chauhan, 2019)To ensure its energy security, India engages in strategic partnerships with energy-rich countries, including China, despite competition in other domains. These partnerships encompass joint ventures in exploration and production, as well as downstream activities such as refining, petrochemicals, and gas distribution. However, the pursuit of energy security can lead to geopolitical tensions, alliances, and resource nationalism, as nations prioritize their domestic energy needs over international market dynamics. (Pathak, 2007) India’s energy diplomacy must deftly navigate these complex geopolitical factors to ensure the nation’s energy security in a volatile global landscape.

India’s Energy Diplomacy Strategies

Bilateral and Multilateral Agreements

India has adopted a proactive approach to energy diplomacy, forging bilateral and multilateral agreements with energy-rich countries to secure its energy needs. Examples include:

• Gulf Countries: India has historically relied heavily on Gulf countries for its oil imports. To ensure a steady supply, India has cultivated strong energy partnerships with countries like Saudi Arabia, Kuwait, and the UAE, which are among its top energy suppliers. These partnerships often involve long-term contracts and joint ventures in exploration and production. (Lam-Ya Mostaque, 2022)
  
  
• Russia: Despite close ties with the US, India has maintained a robust energy relationship with Russia. India imports Liquefied Natural Gas (LNG) from Russia, securing a significant investment and diversifying its gas exporter list. This partnership also extends to joint ventures in oil and gas exploration and production. (Lam-Ya Mostaque, 2022)
  
  
• Africa: Recognizing the need to diversify its energy sources, India has turned its attention to Africa, a continent with vast untapped energy potential. India has pursued energy partnerships with African countries like Nigeria, Egypt, Algeria, and Libya. These partnerships involve investment in energy infrastructure, exploration, and production activities. India has also engaged in capacity building and technology transfer initiatives to support the development of Africa’s energy sector.(Pathak, 2007)
  
  

Diversification of Sources

India’s energy diplomacy strategy prioritizes reducing over-reliance on specific regions for energy imports. This is particularly important considering the geopolitical volatility in West Asia, a region that has traditionally been a major source of India’s energy imports.

• Beyond West Asia: While West Asia remains a crucial source of energy for India, the country has been actively seeking to diversify its import sources by engaging with countries in Central Asia, Southeast Asia, and Africa. This diversification strategy aims to mitigate the risks associated with supply disruptions and price volatility in any single region. (Chauhan, 2019)
  
  
• Diversification of Energy Mix: India is also diversifying its energy mix by increasing the share of renewables, nuclear, and hydropower in its energy portfolio. This strategy aims to reduce the country’s dependence on fossil fuels, enhance energy security, and promote environmental sustainability.
  
  

Renewable Energy Initiatives

India has emerged as a global leader in renewable energy initiatives, playing a crucial role in promoting the transition to a low-carbon energy future:

• International Solar Alliance (ISA): India has spearheaded the establishment of the ISA, a coalition of solar resource-rich countries aimed at promoting the deployment of solar energy globally. The ISA facilitates technology transfer, capacity building, and investment in solar energy projects, enabling member countries to harness the potential of this clean and sustainable energy source. India sees the ISA as a platform to project its soft power and enhance its global standing in the renewable energy sector. (Ganeshan & Bhattacharjya, 2022)
  
  
• Green Hydrogen: India has set ambitious targets for green hydrogen production, recognizing its potential as a clean and versatile energy carrier. The government is incentivizing investments in green hydrogen production and infrastructure, aiming to establish India as a global hub for this emerging technology. India’s energy diplomacy is actively promoting international collaborations in green hydrogen research, development, and deployment.
  
  

Infrastructure Investments

• Overseas Exploration: India’s national oil company, ONGC Videsh, has been actively investing in overseas exploration and production projects in over 26 countries, including Russia, Myanmar, Brazil, Colombia, and Azerbaijan. These investments aim to secure equity oil and gas for India, reducing its reliance on imports. (Ganeshan & Bhattacharjya, 2022)
  
  
• Partnerships for Energy Infrastructure: India is engaging in strategic partnerships with other countries to develop energy infrastructure, including pipelines, refineries, and power grids. These partnerships facilitate the transportation and distribution of energy resources, enhancing energy security and regional integration. For instance, India has been involved in discussions regarding transnational natural gas pipeline projects like the Iran-Pakistan-India pipeline, the Turkmenistan-Afghanistan-Pakistan-India Pipeline (TAPI), and the Myanmar-Bangladesh-India pipeline.(Lam-Ya Mostaque, 2022)
  
  

These diverse strategies highlight India’s commitment to securing its energy future through a multifaceted approach that leverages both traditional and renewable energy sources. The success of these initiatives will be crucial for India’s continued economic growth and its ability to meet the energy needs of its vast and growing population.

Challenges in Securing Energy Resources

India’s pursuit of energy security faces numerous challenges stemming from geopolitical risks, economic factors, technological gaps, and domestic hurdles. Regional instability in key energy-producing nations poses a significant risk to India’s energy imports. The Middle East, a major source of India’s oil imports, has historically been plagued by political turmoil and conflicts. This instability can lead to disruptions in energy supplies, price volatility, and geopolitical tensions. Similarly, the volatile political situations in countries like Afghanistan and Pakistan impact the feasibility of crucial pipeline projects intended to connect India with Central Asian energy resources. (Lam-Ya Mostaque, 2022) (Yadav, 2008)

Economic factors further complicate India’s quest for energy security. Price volatility in global energy markets makes it challenging for India to manage its energy budget and plan for long-term energy needs. Moreover, competition from other energy-hungry nations, such as China, for access to global energy resources intensifies the pressure on India to secure favourable energy deals. China’s Belt and Road Initiative, with its focus on energy infrastructure development in Asia and beyond, presents a particular challenge for India’s energy interests, as it could potentially reshape regional energy dynamics in favour of China. (Chauhan, 2019)

Technological gaps in renewable energy and storage present further challenges for India. While India has made significant strides in renewable energy deployment, particularly in solar power, it still relies heavily on fossil fuels for its energy needs. Scaling up renewable energy production to meet India’s growing energy demand requires innovation in areas such as energy storage, grid integration, and the development of more efficient and cost-effective renewable energy technologies.(Lam-Ya Mostaque, 2022) (Bhagwat, 2021)

Future Prospects and Recommendations

Addressing these challenges necessitates a comprehensive and multifaceted approach. Strengthening strategic partnerships with key energy producers, including countries in the Gulf region, Russia, and Africa, is crucial for securing long-term energy deals and mitigating geopolitical risks. Diplomacy plays a vital role in fostering these partnerships, enabling India to negotiate favourable terms for energy imports, joint ventures in exploration and production, and technology transfer. Boosting domestic production of both fossil fuels and renewable energy sources is another crucial aspect of India’s energy security strategy. Incentivizing investments in exploration, production, and infrastructure development can enhance India’s energy self-sufficiency and reduce its dependence on imports. (Griffiths, 2019) (Ganeshan & Bhattacharjya, 2022)

Investing in innovation in renewable energy technologies is essential for a sustainable energy future. Focusing on research and development in areas such as solar, wind, and hydrogen technologies can help India leapfrog technological barriers and transition to a cleaner energy mix. Additionally, regional cooperation with neighbouring countries offers opportunities for sharing energy resources and enhancing energy security. Building energy grids and establishing cross-border energy trade can foster regional integration, reduce dependence on external suppliers, and promote regional stability. (Chauhan, 2019)

In conclusion, India’s energy security is a complex and multifaceted challenge requiring a strategic and adaptive approach. The nation must navigate geopolitical risks in key energy-producing regions, economic uncertainties like price volatility and competition, and technological hurdles in the transition to renewable energy. Bilateral energy diplomacy is a critical tool for India, as demonstrated by its engagement with GCC states. These partnerships offer benefits to both sides: India secures access to vital energy resources, while GCC countries ensure long-term hydrocarbon monetisation and facilitate economic diversification. India must also focus on strengthening domestic energy production, both in fossil fuels and renewables, while prioritising innovation in areas like renewable energy technology and storage. Finally, regional cooperation through initiatives like cross-border energy grids can offer a pathway to shared resources and enhanced energy security for India and its neighbours.

References

Ahmad, T. (2014). India’s Energy Security Challenges. Indian Foreign Affairs Journal, 9(4), 351–369. JSTOR. https://doi.org/10.2307/45340969

Bhagwat, J. (2021). India’s Energy Policy Need for Strategic and Futuristic Thinking. Economic & Political Weekly, 56(48).

Chauhan, P. (2019). Energy Dimension of the Belt and Road Initiative. Indian Journal of Asian Affairs, 32(1/2), 119–152. https://doi.org/10.2307/26902688

Ganeshan , S., & Bhattacharjya, S. (Eds.). (2022). India’s Role in Global Energy Governance Framework: 2040 and Beyond. The Energy and Resources Institute (TERI). In partnership with Konrad-Adenauer-Stiftung (KAS).

Griffiths, S. (2019). Energy diplomacy in a time of energy transition. Energy Strategy Reviews, 26, 100386. https://doi.org/10.1016/j.esr.2019.100386

Lam-Ya Mostaque. (2022). INDIA’S ENERGY DIPLOMACY AND GEOPOLITICS IN SOUTH ASIA. 43(2), 185–203. https://www.researchgate.net/publication/361734093

Pathak, V. (2007). India’s Energy Diplomacy in Francophone Africa: CompetitiveCooperation with China. India Quarterly, 63(2), 26–55. JSTOR. https://doi.org/10.2307/45073213

Pradhan, R. (2020). Energy Geopolitics and Pipeline Diplomacy in Central Asia: India’s Interests and Policy Options. Jadavpur Journal of International Relations, 24(2), 216–246. https://doi.org/10.1177/0973598420943434

Tripathi, S. (2023). Energy Diplomacy: Key to India’s Economic Strength. Splint International Journal of Professionals/Splint International Journal of Professionals, 10(4), 364–374. https://doi.org/10.5958/2583-3561.2023.00036.x

Yadav, R. S. (2008). India’s Energy Security Policy. India Quarterly, 64(3), 1–27. JSTOR. https://doi.org/10.2307/45073175