India’s Energy Independence: Why Renewables Are Key to Strategic Autonomy

New Delhi – India’s pursuit of strategic autonomy is increasingly intertwined with its energy policy, pushing the nation toward a dramatic shift from reliance on imported fossil fuels to a renewables-powered economy. This transition, however, is fraught with challenges, ranging from geopolitical pressures to significant domestic infrastructure hurdles.

The impetus for change stems from India’s heavy dependence on energy imports. Currently, over 35% of its energy consumption is met through imports, a figure that has risen from 10% in 1990. This vulnerability was starkly highlighted by the volatility in global oil markets following Russia’s invasion of Ukraine in 2022, which sent Brent crude prices above $120 per barrel and impacted India’s current account deficit, and inflation. While India increased its oil imports from Russia – rising from 2% of total imports in 2021 to 36% by 2024 – taking advantage of discounted prices, it has also exposed the country to potential disruptions and political pressure, as evidenced by recent discussions within the draft India-US trade agreement regarding phasing out these imports.

The shift towards renewables isn’t solely about mitigating geopolitical risk; it’s also about securing a sustainable economic future. India has already installed over 220 gigawatts of non-fossil capacity as of March 2025, including 105.65 gigawatts of solar, 50 gigawatts of wind, and 5.10 gigawatts of small hydro. The nation aims to more than double this to 500 gigawatts by 2030. However, simply increasing capacity isn’t enough. Becoming a true “electro-state,” powered primarily by renewable energy, offers significant advantages, including access to abundant resources like sunlight and wind, and the potential to drive innovation in key future technologies like data centers, electric vehicles, and artificial intelligence.

Beyond the strategic and technological benefits, a move towards renewables addresses pressing domestic concerns. The social costs associated with burning coal and oil are substantial, with cities like New Delhi facing severe pollution levels. A recent World Bank study underscored the devastating impact of fossil fuel combustion on public health. Existing thermal power investments – estimated between $40 billion and $60 billion – are already at risk of becoming stranded assets as solar-plus-battery storage solutions become increasingly cost-competitive.

However, the transition isn’t without its risks. A reliance on renewables could potentially shift dependence from oil to technology, given China’s dominance in solar manufacturing and battery supply chains. This concern underscores the need for India to not only expand renewable energy capacity but also to revitalize its manufacturing sector. Currently, electricity costs in India are double those of competitor countries, hindering manufacturing growth. Cheaper electricity, generated from renewables, is seen as crucial to attracting investment and reviving the sector.

Despite progress, India lags behind China in its pursuit of energy independence. While India’s renewable energy share is growing, it currently stands at 20%, compared to China’s 35%. India’s electrification share – 15.6% of total energy consumption – is also lower than China’s at a comparable stage of development (27.4% in 2009). Recent gains in renewable energy capacity are largely attributed to the 90% decline in global solar costs since 2010, rather than solely to domestic policy initiatives.

The most significant obstacle to India’s energy transformation lies in its fragmented governance structure. Decision-making is split between the central government and 28 state governments, with the latter controlling the critical electricity distribution sector. Indian distribution companies (“discoms”), largely public-sector monopolies, are chronically financially strained due to populist policies that keep electricity prices below cost. These discoms have accumulated roughly $75 billion in debt and are unable to purchase power from renewable generators, resulting in over 50 GW of excess renewable energy supply. Inadequate grid infrastructure – with approximately 60 GW of power currently impeded by transmission capacity limitations – hinders the effective integration of renewable energy sources.

To overcome these challenges and achieve energy independence, India must accelerate its transition to an electro-state. This requires bolder reforms, particularly at the state level, to address the inefficiencies of public-sector monopolies and foster competition. Significant investment – estimated at $50 billion by 2035 – is needed to upgrade the grid and develop energy storage systems. The speed of this transformation will be critical in determining India’s vulnerability to the shifting geopolitics of energy and its ability to secure a sustainable and autonomous economic future.