Today India imports around 88–90 percent of its total crude oil requirements. In 2014 this dependence was around 77 percent. Despite the rhetoric of “Atmanirbhar Bharat,” India has become more dependent than before in the energy sector. The most serious thing is that the government did not develop any long-term strategy to reduce this dependence. Neither was priority given to a major expansion of public transport, nor were alternative energy sources expanded on the scale that was required, nor was domestic energy security strengthened from a strategic point of view.

The government claims that India imports oil from around 40 countries, but the reality is that India’s dependence is still mostly on West Asia and America-supporting countries. Under pressure from America, India almost stopped oil imports from Iran, whereas Iran used to provide oil to India at comparatively cheaper rates and on flexible payment conditions. After 2012, India and Iran had developed a “Rupee-Rial Payment Mechanism” amidst American sanctions. Under this, Indian oil companies used to make payments in rupees instead of dollars, and this amount remained deposited in Indian banks such as UCO Bank. During some periods, an amount equivalent to billions of dollars remained deposited in the Indian banking system. Iran used those same rupees to buy rice, medicines, tea, and other goods from India. This reduced the pressure of the dollar on India and provided relief to the foreign exchange reserves. But because of the pro-American foreign policy, India almost ended this strategic arrangement.

After the Russia–Ukraine war, Russia was giving India oil at heavy discounts, but the biggest benefit of this went not to the common people but to private oil companies. According to Reuters and Financial Times, in 2024–25 India was buying around 1.9 million barrels of oil per day from Russia. Russian oil was available cheaper by 8–20 dollars per barrel than global prices. Companies such as Reliance and Nayara Energy earned billions of dollars in additional profit from this. It is estimated that Indian refiners received around 16 billion dollars of additional profit from discounted Russian oil. But when oil was cheap, the public did not get relief in petrol and diesel prices. The government earned huge revenue by increasing excise duty and companies earned record profits through refining margins. Now when global prices are rising, the entire burden is being put on the public.

Today the government is citing the Hormuz crisis, but it does not tell that India’s strategic oil reserves are extremely limited. India’s government strategic oil reserves can fulfill only around 9–10 days of requirement. In comparison, China has developed a massive oil storage capacity capable of running for many months. That means if supply in West Asia is disrupted, India can immediately fall into crisis. This weakness is not the result of any one war but of long-term policy failure.

The situation on the economic front is also worrying. In 2014 the dollar was around 60 rupees; now it has crossed even 95 rupees. It seems Modi will be satisfied only after making it hit a century. This fall of the rupee made imports expensive and increased inflation. The cost of food items, education, health, and transport has increased rapidly, whereas real income is falling. In rural areas, real wage growth remained zero or negative in many periods. FMCG companies themselves are admitting that rural and urban consumption has weakened. This means the purchasing power of the common people is continuously declining.

To maintain the GDP growth rate, the contribution of government capital expenditure is continuously increasing, whereas private investment and private consumption are weak. Foreign Institutional Investors (FIIs) have also rapidly withdrawn money from the Indian market in recent times. The pressure of this has fallen on both foreign exchange reserves and the rupee. India’s problem is that it has still not become a strong manufacturing economy or high-technology center like China. A large part of our economy is dependent on a consumption-based market and financial investment. Foreign capital comes here less for production and more for earning profit from the market. As soon as global circumstances change, that same capital exits rapidly. If these same policies continue, then slowly India can turn into a huge consumer market and dumping ground for foreign products. Campaigns such as “Make in India” have remained big propaganda programs, whereas real production and technological self-reliance could not reach the expected level.

The real problem is that the present economic model is centered on corporate profit instead of production, employment, and public welfare. Under the “Ambani-Adani model,” the control of a handful of companies over energy, ports, airports, and infrastructure has increased. The government tries to divert attention from its policy failures by blaming external crises, whereas the real crisis exists within those very policies.

India needs serious change in the direction of energy security, strategic storage, domestic manufacturing, technological development, and an employment-based economic structure. Otherwise, during every global crisis, the weaknesses of the country will continue to become even more exposed. (IPA Service)