India’s Energy Landscape

Context:

Recently, India proposed to increase its oil and natural gas imports as a part of India’s goal to double bilateral trade to USD 500 billion.

This energy trade is expected to increase from USD 15 billion to USD 25 billion.

Relevance:

GS-02, GS-03 (Renewable Energy, Government Policies & Interventions)

Key highlights of this move:

This engagement helps India to enhance its ‘Mission 500’ initiative to double bilateral trade to USD 500 billion by 2030.
It also helps balancing India’s USD 45.7 billion trade surplus with the US in 2024.
India currently imports more than 85% of its crude needs, and with the projected GDP to rise to USD 8.6 trillion in the future, it is very important to ensure stable supply.
Energy ties with the US will also help India strengthen its bid for full membership in the International Energy Agency (IEA) and will also deter China’s dominance in global energy markets.
Meanwhile, India, alongside diversifying its import sources from the US, Russia, Brazil, Canada, and Africa, is also planning to increase its oil & gas exploration area from 0.5 million sq. km. by 2025 to 1 million sq. km. by 2030 to meet steady energy needs.

State of India’s Energy Consumption

Crude Oil

Total Imports (2023-24): 234.26 million tonnes of crude oil.
Import Dependence: Increased to 87.8% in 2023–24, with domestic production meeting less than 13% of demand.
Future Projection: Expected to grow at a CAGR of 4.59% to 500 million tonnes by FY40.

Natural Gas and Cleaner Fuels

Target: Increase natural gas’s share in the energy mix to 15% by 2030 (currently ~6%).
LNG Imports (2023-24): 31.80 bcm worth USD 13.405 billion.
Ethanol Blending Target: Increased to 20% by 2025–26 to reduce fossil fuel dependence.
Ethanol Production Capacity: Reached 1,600 crore litres as of September 2024.
Impact: The EBP programme reduced CO₂ emissions by 544 lakh metric tonnes and replaced 181 lakh metric tonnes of crude oil.

Prelims Question:

Arrange the following components of India’s energy consumption in ascending order based on their share in the total energy mix (as of 2023–24):

Natural Gas
Crude Oil
Ethanol

Choose the correct options:

(A) 1 – 3 – 2

(B) 3 – 1 – 2

(D) 2 – 1 – 3

Answer:

Explanation:

Crude oil accounts for about 30% of India’s energy mix.
Natural gas accounts for around 6%–7% of India’s energy mix.
Ethanol has a significantly smaller share, likely below 1%.