India starts recalibrating its energy security strategy amid rising Middle East risks
📌 India’s March economic report shows that the conflict in the Middle East is forcing the country to reassess the need for larger resource buffers, especially oil. The message suggests that energy security is now being pushed higher on the strategic priority list.
🔎 India’s vulnerability is clear, with crude reserves currently covering only about 25 days of demand, while nearly 40% of its oil imports pass through the Strait of Hormuz. For an economy still heavily dependent on imported energy, any disruption could quickly spill over into the currency and inflation.
⚠️ Even so, India still has some protection through strong foreign exchange reserves, a low current account deficit, and relatively moderate inflation. The bigger risk would emerge if the crisis lasts longer, weakening the rupee and spreading cost pressures into sectors such as fertilizers and petrochemicals.
💡 The government’s decision to activate emergency powers to optimize LPG production shows that the response has already moved beyond simple warnings. The broader signal is that India is shifting from short-term reaction to preparing for a more prolonged period of energy instability.