Syllabus: GS3/Infrastructure; Energy Resources
Context
- Recently, the Prime Minister of India, at India Energy Week in Goa, has called on global investors to partner in India’s rapidly expanding energy sector, describing it as a $500-billion investment opportunity.
- Representatives from nearly 125 countries participated, reinforcing India Energy Week’s position as a major global energy platform.
Key Highlights of India Energy Week 2026
- Focus on Energy Independence: India outlined its transition from energy security to energy independence, with long-term, sustainable strategies.
- India as a Reliable Energy Partner: India is among the top five exporters of petroleum products, supplying over 150 countries, making it a reliable global energy partner.
- Major Investment Opportunities: India showcased $500 billion worth of opportunities across the energy value chain, from exploration to downstream sectors.
- Exploration and Deep-Sea Initiatives: Emphasis on the Samudra Manthan Mission, with plans to attract $100 billion in oil and gas exploration investments and expand exploration areas to 1 million sq km.
- Refining Powerhouse Vision: India is on track to become the world’s largest refining hub, ranking second globally in refining, with capacity expected to exceed 300 MMTPA.
- LNG and Gas Infrastructure Push: Target to meet 15% of energy demand through LNG, backed by a ₹70,000-crore shipbuilding programme, new terminals, pipelines, and city gas networks.
- Growing Petrochemical Demand: Rising population and economic growth are driving strong investment prospects in petrochemicals and downstream infrastructure.
| India’s Energy Sector – Installed Generation Capacity: India is the third-largest producer and consumer of electricity worldwide, with an installed power capacity of 466.24 GW as of January 31, 2025. – India’s Coal Based Energy: It contributes nearly 55% to the national energy mix and fuels over 70% of total power generation. – Renewable Energy Growth: India is among the top nations globally for solar and wind capacity, aiming for 500 GW of non-fossil fuel capacity by 2030. – Total Installed Capacity (renewable energy sources, including large hydropower): 209.45 GW (As of December 2024). A. Wind Power (48.16 GW); Solar Power (97.87 GW); Biomass/Co-generation (10.73 GW); Small Hydro (5.10 GW); Waste To Energy (0.62 GW), and Large Hydro (46.97 GW). – Transmission Infrastructure: The country boasts one of the world’s largest synchronized power grids, enabling electricity transfer across regions. a. India has achieved near-universal electricity access, with over 99% of villages electrified. – Total Energy Supply and Demand (2025): a. Supply: Approximately 1,800 Million Tonnes of Oil Equivalent (MToE), reflecting an annual increase of 4.5% compared to 2024. b. Demand: It is driven primarily by industrial growth (40%), transportation (25%), and residential consumption (20%). |
Other Reasons For Global Investors to Invest in India’s Energy Landscape
- Attractive Exploration Potential: Reforms in oil and gas exploration, over 170 awarded blocks, reduced No-Go areas, and promising regions like the Andaman & Nicobar basin enhance upstream opportunities.
- Integration with Global Trade Networks: Recent FTAs with the EU, UK, and EFTA countries strengthen supply chains and boost investor confidence.
- Growing Petrochemical Market: Rising industrialisation, urbanisation, and consumer demand are creating strong growth prospects in petrochemicals and downstream infrastructure.
- Commitment to Innovation and Sustainability: Focus on cleaner fuels, advanced technologies, and sustainable energy solutions aligns India with global energy transition goals.
- Stable and Predictable Market: Democratic governance, policy continuity, and a large domestic market provide long-term stability for global investors.
Related Concerns & Issues in India’s Energy Landscape
- Rising Energy Demand Pressure: Rapid economic growth and urbanisation are increasing energy demand, creating challenges in balancing supply, affordability, and sustainability.
- Import Dependence for Crude Oil and Gas: Despite strong refining capacity, India remains heavily dependent on imported crude oil and natural gas, exposing it to global price volatility and geopolitical risks.
- Infrastructure Gaps: Expanding pipelines, LNG terminals, storage facilities, and transmission networks requires large capital investments and timely execution.
- Energy Transition Challenges: Balancing fossil fuel expansion with clean energy commitments and climate targets remains a complex policy and investment challenge.
- Technology and Skill Gaps: Advanced exploration, deep-sea drilling, LNG shipping, and cleaner technologies require specialised skills and high-end technology.
- Logistics and Supply Chain Constraints: Port congestion, shipping availability, and inland transportation bottlenecks can affect energy trade efficiency.
- Regulatory and Policy Uncertainty: While reforms are ongoing, frequent policy changes and varying state-level regulations can create uncertainty for investors.
- Financing and Capital Mobilisation: Large-scale energy projects require long-term, low-cost financing, which can be challenging amid global economic uncertainties.
- Environmental and Social Concerns: Exploration, refining, and infrastructure projects may face environmental clearances, land acquisition issues, and community resistance.
- Geopolitical Risks: Global conflicts and supply chain disruptions can impact energy imports, exports, and investment flows.
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