Generally, structural energy changes rarely happen during comfortable times. They happen when a crisis makes the cost of inaction too high to ignore.
However, over the course of the last 11 years, the Modi government has done the opposite. It undertook structural changes in the energy sector even when circumstances did not force such action.
It enabled India to build greater capacity to absorb disruptions in global energy supply chains. By expanding domestic production, managing the transition to new energy sources, and diversifying supply sources, the Modi government has reduced the country’s vulnerability to external shocks to its energy needs.
The path for India was never a mystery. What was required was the political will to pursue it consistently. Over the past decade, the Modi government chose to stay the course. The Modi government has made itself accountable to the public, which wanted solutions to its problems.
The strategy rested on three pillars, and each demanded a different kind of commitment from the government.
The first was domestic production. The practice of blending ethanol with petrol began in 2001 as a pilot project. Yet for many years, India made no progress, and ethanol production remained stagnant. It was only after 2014 that, through a series of comprehensive reforms, India was able to unlock the full potential of this initiative.
Under the Modi government, the country embarked on a series of comprehensive reforms to enhance energy security, combat climate change, and boost the rural economy. A target of 20% ethanol blending in petrol was initially set for 2030 under the Ethanol Blending Programme (EBP).
However, in 2020, the Cabinet Committee on Economic Affairs (CCEA) advanced this target to 2025, as it worked with renewed focus to reduce the country’s vulnerability to energy imports in the event of geopolitical shocks.
As a result of efforts and policy focus, ethanol blending in petrol rose from 1.5% in 2014 to 20% in 2025, a 13-fold increase over 11 years. Ethanol production surged from 38 crore litres in 2014 to 661.1 crore litres by June 2025.
The 20% ethanol blending programme now displaces roughly 44 million barrels of crude oil annually.
The second was getting the energy transition right. The Modi government, at all levels, backed the development of the country’s electric vehicle (EV) industry.
It allowed 100% FDI in the automobile sector, which has attracted $36 billion in FDI over the past four years. Incentive schemes were introduced to encourage technological innovation and to build supply chain capacity in the automobile manufacturing sector.
The Faster Adoption and Manufacturing of (Hybrid &) EVs in India (FAME I) was launched in 2015 to promote the adoption and manufacturing of electric and hybrid vehicle technology, ensuring the sustainable growth of this sector.
In the first phase of the scheme, approximately 2.78 lakh EVs were added, resulting in a saving of about 59 million litres of fuel. Based on the outcome and experience of the FAME India Scheme, the second Phase of FAME was launched in 2019. Incentives and concessions were provided to consumers (buyers/end-users) through upfront price reductions on hybrid and electric vehicles, thereby facilitating mass adoption.
This initiative made electric vehicles (EVs) more affordable and accessible to a larger segment of the population, helping to accelerate their adoption. The scheme subsidised the purchase of 16 lakh electric vehicles (EVs) and the construction of charging infrastructure, saving 42.9 million litres of fuel.
Moreover, as a result of the initiative, the number of electric vehicles registered in India in 2023-24 increased by 9.7 times compared to 2019-20. At present, India’s EV market is experiencing rapid acceleration in 2025-2026, with sales hitting 2.3 million units (approx. 8% of total vehicle registrations).
EVs and renewables are moving in the right direction, but the transition carries its own dependency risk with regards to critical minerals. Swapping oil dependency for mineral dependency is not complete energy security. To as to also reduce vulnerability, the Modi government launched a ‘National Critical Mineral Mission’ to secure the supply of critical minerals and strengthen India’s critical minerals value chains.
The third was the Modi government’s diversification of energy sources and supply partners. PM Narendra Modi has pursued a policy of multi-alignment, which has enabled India to cultivate parallel, deep relationships with multiple states to advance its interests. This diplomatic outreach has expanded India’s crude sourcing base from 27 countries a decade ago to more than 40 today.
A useful way to understand the importance of these measures is to consider what the situation might have looked like had these steps not been taken. Events such as the Russia–Ukraine War and tensions around the the Strait of Hormuz have repeatedly has demonstrated how quickly supply chains can be affected.
Consider for instance that without the expansion of domestic alternatives such as ethanol blending, which has already substituted over 190 million barrels metric tonnes of crude oil imports (and saved more than Rs 1.55 lakh crore) in foreign exchange after 2014, India’s exposure to such shocks would have been much greater and adversely consequential. In that scenario (of not making ethanol blending a priority), global supply disruptions would have translated much more sharply into Indian domestic economic pressure.
Had the Modi government not pursued these policies over the last 11 years such disruptions could have produced severe instability in India’s energy system, with consequences that may well have bordered on mayhem for an expanding economy like that of India.
The reforms undertaken over the past decade therefore has helped India enter a period of geopolitical uncertainty we are seeing today with stronger buffers and greater flexibility in managing its energy needs.
However, the days when India’s energy security rose and fell with conditions in a single maritime chokepoint are over, and any disruption to a single corridor triggers a managed sourcing adjustment, not a supply emergency.
As Indian refiners do not depend on a fixed slate from a fixed origin, this flexibility is a primary energy security asset for the country. While the Strait of Hormuz remains an important chokepoint, India can reroute vessels and shift strategy to other energy-exporting countries.
India today is in a far stronger position to handle disruptions in global energy markets than it was a decade ago. In a world where supply chains are increasingly uncertain, a wider and more diverse base of energy sources and partnerships has become an important safeguard for India’s energy supply resilience.
