How Could the Strait of Hormuz Crisis Accelerate India's Energy Transition?

India, the world's sixth-largest economy and third-largest energy consumer, stands at a critical juncture in its development trajectory. The country is pursuing two parallel strategic objectives: achieving the vision of Viksit Bharat (Developed India) by 2047 and reaching net-zero carbon emissions by 2070.

Reliable, affordable, and clean energy is indispensable for achieving India's development ambitions, while the transformation of the energy sector constitutes a cornerstone of its long-term climate commitments.

Heavy Dependence on Energy Imports

India's energy sector remains heavily reliant on imported fossil fuels. During the 2024–2025 fiscal year, import dependence reached approximately 89% for crude oil, 50% for natural gas, and 25% for coal.

The Middle East plays a pivotal role in meeting India's energy requirements. Nearly 47% of India's crude oil imports in 2024–2025 originated from the region and passed through the Strait of Hormuz, one of the world's most critical maritime corridors for energy trade between India and the Middle East. The region's share of India's crude imports stood at 64% in 2021–2022, before discounted Russian oil significantly reshaped India's import portfolio in recent years.

India's dependence is even more pronounced in the liquefied petroleum gas (LPG) sector, which serves as the country's primary cooking fuel. Approximately 95% of India's LPG imports originate from West Asian countries and transit through the Strait of Hormuz. Similarly, around 64% of India's liquefied natural gas (LNG) imports come from the same region.

Natural gas is also India's second most important transportation fuel through compressed natural gas (CNG), accounting for roughly 6% of transport fuel consumption in 2024–2025. In addition, piped natural gas (PNG) is widely used for cooking, representing approximately 9% of energy consumption in the residential sector and 12% in the commercial sector.

Impacts Beyond the Energy Sector

India's dependence on the Middle East extends beyond oil and gas. The region supplies around 43% of India's fertilizer imports and approximately 73% of its urea imports.

Natural gas is a critical industrial feedstock within the Indian economy. About 45% of the country's gas consumption is used in the production of agricultural fertilizers and chemical products essential for manufacturing plastics and synthetic fibers. Consequently, any disruption in natural gas supplies would affect not only the energy sector but also food security and a wide range of downstream industries.

Crude oil imported from the Middle East and other regions is refined domestically into petroleum products that are used primarily in transportation and cooking.

A Complex Energy Mix

Energy consumption patterns vary significantly across India's economic sectors.

In the industrial sector, coal dominates with approximately 59% of total energy consumption, while petroleum products and electricity each account for around 19%.

The transportation sector remains overwhelmingly dependent on petroleum products, which constitute roughly 92% of total energy consumption, while natural gas contributes about 6%.

By contrast, the residential, commercial, and agricultural sectors rely primarily on electricity, followed by petroleum products. Electricity satisfies most non-cooking energy needs, whereas cooking remains heavily dependent on petroleum-based fuels, which account for approximately 81% of energy used for this purpose.

This diversity of consumption patterns, combined with unequal access to affordable green technologies, highlights the complexity of India's energy transition. Given the scale, diversity, and continued growth of energy demand, no single technology or energy source can deliver the transition on its own.

Electrification and Its Challenges

Electrification of end-use sectors is widely regarded as a key pathway toward a low-carbon economy. When electricity is generated from non-fossil sources, its use becomes an important step toward achieving energy transition goals.

Currently, electricity accounts for roughly one-fifth of India's final energy consumption. A recent study by NITI Aayog suggests that achieving net-zero emissions will require increasing electrification to nearly 60% of total final energy consumption.

Although India has made substantial progress in renewable energy deployment—with more than half of installed electricity generation capacity now coming from non-fossil sources—the actual share of green electricity generation remains only about 27%.

This discrepancy stems largely from the intermittent nature of renewable sources such as solar and wind energy, creating challenges related to grid stability and demand management.

Furthermore, battery storage systems and renewable energy technologies depend heavily on critical minerals, particularly rare earth elements. Here, India faces another strategic vulnerability: a substantial reliance on imported critical minerals, while China continues to dominate global supply chains. As a result, the energy transition could create a new form of energy dependency.

The Potential Role of Nuclear Energy

Nuclear power offers considerable potential to provide clean, reliable, and stable electricity while helping reduce emissions from India's power sector. However, concerns regarding safety, high capital costs, and regulatory challenges continue to hinder rapid expansion.

Decarbonizing Transportation

Carbon emissions from passenger road transport can be substantially reduced through the adoption of electric vehicles (EVs) and the expansion of electrified public transportation systems, including railways, metro networks, electric buses, and electric three-wheelers.

Nevertheless, inadequate EV charging infrastructure remains one of the principal barriers to accelerating this transition in the near term.

Cooking and Household Energy

Cooking in India continues to depend heavily on LPG and piped natural gas. According to the Fifth National Family Health Survey, these fuels serve as the primary cooking source for 89% of urban households and 42% of rural households.

Despite efforts to expand access to clean cooking fuels in rural areas, traditional biomass continues to meet a significant share of cooking energy demand in rural communities.

This dependence underscores India's vulnerability to import disruptions. Approximately 95% of LPG imports originate from the Middle East, while imports account for nearly 60% of domestic LPG demand. For piped natural gas, the corresponding figures are roughly 64% and 32%, respectively.

With annual LPG consumption reaching approximately 33 million metric tons and strategic inventories covering no more than 45 days of demand, any geopolitical disruption in the Strait of Hormuz could directly affect domestic energy supplies.

An Opportunity to Promote Cleaner Alternatives

At the same time, disruptions associated with the Strait of Hormuz could provide a strategic opportunity for India to accelerate the adoption of cleaner and more self-reliant household energy solutions.

Although electric cooking has yet to achieve widespread adoption due to culinary practices, traditional cooking methods, and cookware compatibility issues, innovations such as electric plasma stoves may help overcome many of these obstacles.

Other promising alternatives include dimethyl ether (DME)—a clean synthetic fuel derived from coal that can substitute for LPG—as well as solar cooking technologies, hydrogen-based fuels, ethanol, and biogas.

However, these alternatives continue to face challenges related to cost, infrastructure, and supply chains, limiting their large-scale deployment.

Toward a More Sustainable Energy System

Natural gas can serve as a transition fuel due to its lower emissions relative to petroleum products. Emerging fuels such as compressed biogas and ethanol also provide cleaner alternatives while supporting India's broader goal of energy self-sufficiency.

For sectors such as aviation, maritime shipping, and heavy-duty transport, electrification does not currently appear to be a practical solution. In these sectors, sustainable aviation fuel (SAF), biofuels, green ammonia, green methanol, and hydrogen represent promising pathways toward a low-carbon future.

Nevertheless, these technologies continue to face obstacles related to high costs and commercialization challenges. Some biofuels also raise concerns regarding lifecycle emissions and potential impacts on food security due to competition for agricultural land and resources.

Conclusion

The Strait of Hormuz crisis and its associated risks highlight a significant strategic opportunity for India to accelerate its energy transition. Heavy dependence on imports—particularly from a geopolitically volatile region—underscores the need for more secure, sustainable, and diversified energy pathways.

Seizing this opportunity will require long-term strategic planning, supportive policy frameworks, incentives for clean energy adoption, and sustained investment in research and development.

If India successfully leverages this geopolitical moment, the Strait of Hormuz crisis could evolve from a threat to energy security into a catalyst for building a more resilient, sustainable, and self-reliant energy system capable of withstanding future shocks.