For over three decades, every major global energy shock – from the 2003 Gulf War to the 2008 oil price spike and now renewed crisis in the Middle East  which disrupting around 20% of global energy supply – has exposed the same structural weakness in India’s economy: a deep and persistent dependence on imported fossil fuels and resulting vulnerability from price volatility.

Each time global supply tightens, the consequences ripple through India’s economy, widening trade deficits, raising inflation, and forcing fiscal interventions. But beyond these macroeconomic pressures, a more fundamental issue remains unresolved: India’s energy system is still structurally tied to fuels that it does not control.

This dependence is not episodic; it’s systemic. Fossil fuels constitute around 75% of India’s primary energy need and import plays a significant part of it. India imports roughly 85–90% of its crude oil, around 45–50% of its fossil gas, and a significant share of its coal needs, particularly higher-grade fuels.

The recent increased focus on coal amid oil and gas shortages should be understood in this context. It is not simply a short-term operational decision. It is a reflection of a deeper strategic dilemma, one in which fossil fuels continue to dominate, even as their risks become more visible.

Coal as a shock absorber and not a solution

The current increase in coal utilisation reflects its role as a “shock absorber” in India’s energy mix. When gas becomes scarce or expensive, coal plants are ramped up to maintain electricity supply. This has been evident in recent policy responses, where coal plants are being pushed to operate at higher capacity to offset fuel shortages elsewhere.

Coal reliance comes with several critical drawbacks.

First, coal does not eliminate import dependence. India still imports substantial volumes, over 240 million tonnes annually in recent years on the top of one billion tonnes of domestic production, particularly for coking coal and higher-grade thermal coal, exposing it to international price volatility and supply risks.

Second, continued coal expansion locks in long-lived infrastructure, creating stranded asset risks and reducing system flexibility at a time when cleaner, more cost-competitive alternatives are scaling rapidly. Third, this lock-in reinforces inefficiencies across the power system, including underutilised assets and rising fixed costs, which can translate into higher tariffs and fiscal stress.

Finally, it exacerbates environmental and public health costs, including air pollution and emissions.

In effect, coal provides short-term resilience but reinforces long-term vulnerability.

Contradictions in current policy

What makes the current moment particularly striking is the coexistence of two parallel trends. On one hand, India is accelerating renewable energy deployment, with solar and wind capacity expanding rapidly and non-fossil sources accounting for a growing share of installed capacity. On the other hand, fossil fuel infrastructure, especially for gas, is still being actively expanded.

Amid the Middle East crisis, India is pushing renewable energy by accelerating wind and battery clearances because gas supply has become volatile, but at the same time planning to use emergency clause to run imported-coal plant at full capacity.

Fossil gas has long been positioned as a “transition fuel,” but the geo-political disruptions again underscore its volatility. For a fossil fuel import-dependent country like India, this makes gas a risky foundation for long-term energy planning.

Expanding gas infrastructure, pipelines, LNG terminals, and distribution networks, risks locking India into another fossil fuel-dependent pathway. These are capital-intensive, long-lived assets that create economic and political incentives to sustain fossil fuel use, even as cleaner alternatives become more competitive.

Meanwhile, Indian households and businesses, which are already suffering from energy shortage, are going to face yet another summer of climate-fueled heatwaves, one reason for the huge increase in energy demand seen over recent summers.

Renewable energy is the strongest link

To align with a 1.5 °C pathway wind and solar generation need to grow about five‑ to six‑fold by 2030, reaching roughly 900–1 200 TWh and around 600 GW of installed capacity from the generation of around 220 TWh in 2024, while accelerating coal phase‑down, expanding grid integration.

A persistent narrative is that India continues to rely on coal because renewable energy cannot yet meet demand reliably. While challenges around storage, and grid integration are real, this framing misidentifies the core issue.

Renewable energy is not the source of India’s vulnerability; fossil fuel dependence is.

India’s renewable energy potential far exceeds its current and projected electricity demand. Estimates suggest over 3 TW of solar and 1 TW of wind energy potential, compared to current peak demand of around 250 GW. At the same time, the economics have shifted decisively. Utility-scale solar tariffs in India have fallen to around INR 2–3/kWh (USD 0.3/kWh), one of the lowest globally, making new renewable generation cheaper than new coal and gas plants in many cases.

While challenges related to storage and grid integration remain, India is already managing significant variable renewable energy with around 30% of total installed capacity and also  scaling both transmission infrastructure and battery storage, demonstrating that these are manageable system planning issues rather than structural barriers.

Electrification as the strategic pivot

Reducing this vulnerability requires more than diversifying fossil fuel sources. It requires reducing reliance on fossil fuels altogether. The most effective pathway to align with a 1.5oC compatible world is large-scale electrification of end uses – transport, buildings, and industry – combined with a power system increasingly powered by renewables.

Electrification directly reduces oil and gas demand, thereby lowering exposure to import shocks. When paired with domestic renewable generation, it enhances both energy security and economic stability.

This transition will require substantial investment in grid infrastructure, storage technologies, and demand-side management. It also requires policy coherence – ensuring that incentives support electrification rather than continued fossil expansion.

However, the long-term benefits are clear: reduced exposure to global volatility, lower emissions, improved air quality, and potentially lower system costs.

Avoiding fossil fuel lock-in

The central risk facing India today is not an immediate energy crisis, but long-term lock-in. Every new coal plant, gas pipeline, or LNG terminal represents a commitment to decades of fossil fuel use.

Avoiding this lock-in requires a clear strategic direction. Short-term measures to ensure energy security are necessary, but they should not dictate long-term infrastructure choices. Instead, policy should prioritise flexibility, resilience, and alignment with a low-carbon future.

The current moment should therefore be seen as a point of strategic clarity. The repeated exposure to fossil fuel shocks is not incidental – it is a direct consequence of structural dependence.

A more resilient energy system is one that reduces reliance on imported fuels altogether. India has already made significant progress in expanding renewable capacity. The challenge now is to ensure that this progress is not undermined by continued investment in fossil fuel systems that replicate the very vulnerabilities the country seeks to escape.