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The US-Iran war has promted a rethink on the challenges facing the Indian economy. Most of the focus at the moment is on the sharp fall in the exchange rate of the rupee.
But the fact remains, rupee’s fall is not by itself the major problem. It is rather a most substantive weakneses in the economy.
The biggest one is India’s high rising dependence on energy imports. Asking people to work from home and other initial austerity measures are at best short term solutions.
An economy such as India that seeks to quadruple average income over the next 20 years will need all the energy it can get. Per capita electricity consumption rose to by 46 per cent between 2013-14 and 2023-24, according to government data.
But while demand is growing fast, and it is expected to grow faster, the supply of energy is a different story.Take coal for example.
India is the largest coal producing country in the world. Coal is the backbone to Indian economy remaining source of 79 per cent of total energy supply in 2024-25.
Yet the government admits in 2026, the country has ” experienced steady dependency on imported coal over the last decade’s. The net import energy deficiency for coal in 2025 remains more than 23 per cent.
This is an indicator that measures to the extent to which a country relies on import to manage its energy requirements. The dependence on imports is alarmingly high and is rising when it comes to crude oil.
It is almost 90 per cent to 85 per cent a decade ago. Natural gas is 50 per cent while it was 40 per cent a decade ago.
India ranks globally fourth when it shifts to renewable energy. It is fourth in wind power and third in solar power capacity.
But more needs to be done and soon. India must look at how it uses its energy. Can it shift to electricity for cooking food instead of imported gas?
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Or can public transport be so radically improved reducing the need for cars? These are the questions
