To cushion the economy from volatile crude and global uncertainties, India’s energy strategy must rest on four pillars — scaling up renewables, tapping domestic resources, diversifying import sources and building strategic reserves, Sanjeev Sanyal, a member of the Prime Minister’s Economic Advisory Council (PM-EAC), has said.
In an interview to Moneycontrol, Sanyal said India’s dependence on imports is a long-standing challenge, one that requires a multi-pronged approach. “First of all, we need to be able to build capacities in renewables such as solar and other non-conventional sources like nuclear,” he said.
India meets over 80 percent of its energy needs through imports, which makes it vulnerable to global uncertainties as has been seen in recent times. The government has been pushing for renewable energy to reduce the import bill, emissions and also make India self-reliant.
“Second, we need to find resources domestically because in the end we do need to have some amount of hydrocarbons other than the limited coal reserves. We have been historically quite poor in gas and crude resources internally. In this context, there have been some interesting developments in Andaman and Nicobar and we will be pursuing these findings,” Sanyal said.
India could be on the verge of a major offshore oil discovery in the Andaman Sea, petroleum and natural gas minister Hardeep Singh Puri recently said.
Given the unpredictability of geopolitical disruptions, Sanyal emphasised the importance of securing energy supplies from diverse geographies.
“We have to keep our sources of imported energy as diversified as possible because in an uncertain world, we can never tell where the blockages will be. Sometimes it may be in Eastern Europe, sometimes Middle East, some other day it may be in East Asia,” he said.
Recognising the need for a short-term buffer, he said, “It is important that we also have some amount of storage strategic reserves so that at least in the very short run we can take the shock as happened very recently in the Iran-Israel conflict. So, all these four are part of the current mix of our strategy for dealing with these energy shocks.”
Sanyal’s comments come at a time when experts debate on how to future-proof energy security while sustaining growth amid geopolitical tensions.
The Chabahar port
When asked about the wisdom of sustained investments in the Iran’s Chabahar port given the frequent tensions in the Middle East, Sanyal said the initiative must be seen as part of a broader diplomatic and strategic network. “Chabahar is part of a network of relationships we have in the Middle East. We have strong relationships with the UAE, Oman, Bahrain and more recently through the India-Middle East-Europe Economic Corridor (IMEC) with Saudi Arabia. So, you cannot see any one of these things in isolation, as we recognise that this is a somewhat unstable area,” he said.
India has a network of bilateral relationships with countries there because it needs to be flexible in its approach, he said. “So, for example, Chabahar is part of not just our Iran strategy but also our ability to connect to Central Asia and even Armenia. At every point in time you have to maintain multiplicity of options and Chabahar is one of those options. When you are dealing with an uncertain world, you need to have optionality.”
Located in southeast Iran, Chabahar port offers India an alternative trade route to Central Asia and Afghanistan, bypassing Pakistan. India has invested close to $550 million in the port for terminal operations, a credit line for expansion and also towards the Chabahar-Zahedan railway line. The rail line will would connect the port to the Iranian city of Zahedan and further to Afghanistan and Central Asia.
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