India’s governments have for long convinced its people that things get worse before they get better, that crisis is a feel-good factor as it propels action over rumination. Today the country faces its worst energy shock in history. Yet Indians have watched films of this genre before—in the 1970s, 1990s, and even in the new millennium. Every crisis triggers a performative ritual. Leaders gather, committees convene and bureaucrats magically produce an inventory of solutions. But what begins as an energy crisis rarely ends as one—via inflation it morphs into a slow economic suffocation that governments explain away until they cannot.
The truth is India did not stumble into this energy crisis. It walked into one—casually, unhurriedly, pausing occasionally to peruse reports, between commissions and groups of ministers. Trump’s war has simply unravelled the India stack of missed options and widened the span of its paradoxes. The cost the economy is bound to bear is the price of deliberate inattention. As Indians again witness long queues and retried rhetoric, here are some observations and suggestions.
Import dependence: India has persistently depended on imports to fuel its economy—the 1973 oil shock nearly quadrupled its oil bill. The 1979 shock resulted in India seeking an IMF bailout and even the discovery of Bombay High (remember Sagar Samrat?) didn’t change that. In 2014, the country imported over 70 percent of its crude oil and petroleum products. BJP’s 2014 manifesto promised to ramp up energy exploration “to reduce the import bill”. In 2026, the country’s oil import dependence hovers over 88.5 percent. Yes, consumption has gone up, but what matters is domestic production has gone down—from 36.9 million metric tonnes in 2015 to 28.7 MMT in 2025.
It would be worth examining why the domestic output trails, why the Andaman project—dubbed India’s ‘Guyana field’—is crawling towards production and why the states aren’t doing more.
Million barrels to gigawatts: India can and should enhance resilience by replacing dependence on imported oil barrels with domestically-generated gigawatts. In 2005, an expert committee led by Kirit Parikh authored a seminal report that included an integrated energy policy for fuelling India’s 8-10 percent GDP growth aspiration. Today, the nation trails on many of the recommendations. As against the target of 63 GW of nuclear power, the installed capacity is at 8.8 GW today, having added around 5 GW in 20 years; the 2030 target of 30 GW is ambitious. The Jaitapur project in Maharashtra has languished for 15 years. In hydro power, the installed capacity is 51.2 GW against the recommended 150 GW. Expansion in both nuclear and hydro is haunted by poor regulatory reforms, clearance clogs and the political not-in-my-backyard syndrome.
Looking beyond LPG: The most visible illustration of the energy crisis is the re-emergence of queues for cooking gas and its attendant scams. There is much lather about how expansion of piped natural gas—now covering only 1.8 crore households as against 33.3 crore LPG connections—could have helped mitigate the crisis. In truth, PNG also isn’t immune to the Hormuz crisis. Where India has messed up is in not designing options. There are options of using bagasse plants for cooking gas—particularly in two- and three-crop states where the residue is burnt—which could be managed regionally. There is also the solar option. Indian Oil introduced Surya Nutan, an indoor solar cooker, which could be integrated with the PM Surya Ghar rooftop programme and offered under the Ujjwala scheme. Shifting users from LPG to solar will alleviate the burden for both users and governments.
Whither solar farms: India has the unique advantage of 300 days of sunlight a year. In 2020, the RBI introduced loans to farmers, self-help groups or farmer producer organisations who sought to set up solar plants on their farms. The idea has layered benefits. The average farm holding is below 2 hectares. Solar farms can lift yield and incomes—raise returns on land, improve asset values, and enable technology-based forward linkages. Despite the obvious benefits, the scheme has sputtered to an installed capacity of 839 MW against the target of 10,000 MW. What is stopping states from evangelising the scheme to farmers? PM Kusum covers barely 21.77 lakh farmers, whereas over 9.35 crore are covered by PM Kisan. Why not blend Kisan and Kusum for results?
Fuelling $10-trillion GDP: Managing scale calls for lateral thinking. India has an installed capacity of 524 GW—more than China’s 519 GW in 2005, when it was the No 4 economy. Scale matters in resilience. In 2025 alone, China added 543 GW of power—more than India’s total generation capacity. It has ramped up its total capacity seven times since 2005 to over 3,900 GW. In 2026, its renewable capacity exceeded that through fossil fuels. This is possible as China interprets energy security as national security. It used its dollar surplus (over $1.2 trillion in 2025) to build resources, including a strategic petro reserve that can hold around 1.5 billion barrels. India has 11,098 km of coastline—it can pilot and stack tidal, wave and ocean thermal energies. As it ramps up on renewables, it must also enable battery storage, driving it through the states. India also has over 1.46 lakh km of national highways, whose divider spaces could be used to tap solar for e-charging.
The 2026 energy crisis comes at a confluence of disruptions. And in the current geopolitical climate, India can scarcely afford the business-as-usual model of economics.
Read all columns by Shankkar Aiyar
The Third Eye / Shankkar Aiyar
Author of The Gated Republic, Aadhaar: A Biometric History of India’s 12 Digit Revolution, and Accidental India
(shankkar.aiyar@gmail.com)