On This Day – 14 November 2015
India today imports around 70% of the oil that it consumes. Thus, it goes without saying that in the longer term, India needs to focus on becoming self reliant as far as its energy needs are concerned. But is the country anywhere close to this goal? Probably not. As reported in the Mint, India’s energy consumption is set to double from current levels by 2040. In other words, India will topple China to see the fastest growth in energy demand during this period. The International Energy Agency (IEA) expects India’s oil demand to rise by 6 million barrels per day to 9.8 million barrels per day in 2040. Further, it opines that oil production will fall behind demand. Thus, oil import dependence will rise above 90% by 2040. Coal will continue to account for a larger chunk of India’s energy mix. Increasing import dependence does not bode well for India in the longer term as there could be constant pressure on the Indian rupee and could have major implications in terms of managing trade balances. It will be interesting to see how the government tackles this particular issue in the coming years.
Data Source:World Energy Outlook 2015, Livemint