India cuts overall energy import dependence to 42%, but crude oil imports still meet 90% of demand

India's dependence on imported primary energy has declined modestly over the past eight years, falling from 47 per cent in FY17 to around 42 per cent in FY25, but the country remains heavily reliant on imported crude oil, which continues to meet nearly 90 per cent of domestic demand, according to a report released by the Confederation of Indian Industry (CII) and EY on Thursday.

The report, titled "India's Energy Security in a Volatile World: Independence, Efficiency and Resilience," was unveiled during the 7th International Energy Conference and Exhibition in New Delhi. It attributes the decline in overall import dependence largely to increased domestic coal production, while warning that oil and gas imports remain major vulnerabilities.

Coal output reduces import burden

According to the report, India's overall energy import dependence has eased primarily because of lower coal imports. Coal import dependence has fallen to around 18 per cent, supported by higher domestic production and expanded mining activity. However, the report notes that this improvement has only partially offset the country's continued dependence on imported hydrocarbons. "Overall primary energy import dependence has reduced modestly from 47 per cent to around 42 per cent between FY17 and FY25, indicating gradual diversification of the energy system despite persistent dependence on imported oil," it said.

Crude oil remains biggest challenge

The report identifies crude oil as India's most significant energy security concern. Despite efforts to diversify the energy mix and promote renewable energy, imported crude continues to account for nearly 90 per cent of the country's oil requirement. Natural gas import dependence has also increased to around 50 per cent, as consumption has outpaced domestic production. The findings underscore the structural challenges India faces in reducing its reliance on imported fossil fuels despite progress in renewable energy deployment.

Middle East remains key supplier

The report says the Middle East continues to play a pivotal role in India's energy security, even after diversification of crude oil imports following the Russia-Ukraine conflict. Historically, the region supplied 61-65 per cent of India's crude imports between FY18 and FY22. Although imports from Eurasia increased sharply—from 2.8 per cent in FY22 to 35.7 per cent in FY25—the Middle East still accounted for 47-49 per cent of India's crude oil imports in FY25, making it the country's largest source of supply. For liquefied natural gas (LNG), the region supplied 62.9 per cent of India's imports in FY26, highlighting continued concentration in sourcing.

Energy transition reshaping demand

The report says India's ongoing energy transition is steadily changing the country's consumption pattern, with electricity accounting for a growing share of final energy use and renewable energy capacity expanding rapidly. However, it cautions that adding renewable generation alone will not guarantee energy security. Instead, long-term resilience will depend on strengthening domestic energy production, improving energy efficiency, diversifying fuel sources and building more resilient supply chains.

Focus on Viksit Bharat 2047

The report concludes that India's energy transition is transforming—not eliminating—the country's import dependence. As India pursues its Viksit Bharat 2047 vision, achieving energy security will require balancing clean energy expansion with greater domestic production, broader fuel diversification and a resilient energy ecosystem capable of withstanding global geopolitical and market disruptions.