Source: The post India transforms energy sector to fuel growth has been created, based on the article “A strategy fuelled by vision, powered by energy” published in “The Hindu” on 4 June 2025. India transforms energy sector to fuel growth.
UPSC Syllabus Topic: GS Paper3-Growth and development And Infrastructure (energy)
Context: India recently overtook Japan as the world’s fourth-largest economy, with its GDP reaching $4.3 trillion in 2025. This marks a decade of reform-driven growth under Prime Minister Modi. The energy sector has played a vital role in this economic transformation.
Strategic Energy Vision for a Growing Economy
- Rising Global Energy Role: India is the third-largest energy and oil consumer and the fourth-largest LNG importer. With demand projected to grow 2.5 times by 2047, India will drive 25% of global incremental demand.
- Four-Pillar Energy Strategy: The government addresses availability, affordability, and sustainability by focusing on (1) diversification, (2) domestic production, (3) renewable transition, and (4) affordability.
- Expanding Exploration Acreage: Exploration coverage doubled from 8% in 2021 to 16% in 2025. Reforms like reducing ‘No-Go’ areas by 99% and Open Acreage Licensing (OALP) rounds support the goal of covering 1 million sq. km by 2030.
- New Pricing Mechanism and Contracts: Gas prices are now linked to 10% of the Indian crude basket, with a 20% premium for new wells. Shared infrastructure and revenue-sharing contracts reduce costs and speed up monetisation.
Strengthening Exploration and Production
- Technological Boost to Exploration: Initiatives like Mission Anveshan, airborne gravity gradiometry, and continental shelf mapping have expanded data and built confidence in frontier basins like Andamans, Mahanadi, and Cauvery.
- Significant Discoveries Across Basins: Over 25 hydrocarbon finds have been made in Mumbai Offshore, Cambay, Mahanadi, and Assam basins. Key sites include Suryamani, Vajramani, Utkal, and Konark, adding 75 MMtoe and 2,700 MMSCM of gas.
- Global Collaborations for Output Growth: ONGC’s partnership with bp is set to raise Mumbai High oil output by 44% and gas by 89%. A Houston-based data centre enhances global access to India’s exploration data.
Expanding Infrastructure and Access
- Fuel Supply and Distribution Network: India operates 24,000 km of pipelines and nearly 96,000 retail outlets. Over 67 million people visit petrol stations daily.
- City Gas Growth and Tariff Reform: City gas networks expanded from 55 to 307 areas since 2014. PNG connections rose from 25 lakh to 1.5 crore, and CNG stations crossed 7,500. Unified tariffs ensure broad access.
- Natural Gas Stability and Growth: Gas production rose from 28.7 BCM in 2020–21 to 36.4 BCM in 2023–24. Gas is now in the ‘No Cut’ category for transport and household use.
Accelerating the Green Energy Shift
- Biofuel Impact and Ethanol Scaling: Ethanol blending rose from 1.5% in 2013 to 19.7% in 2025. This saved ₹1.26 lakh crore in forex, cut emissions by 643 lakh MT, and paid ₹2.79 lakh crore to distillers and farmers.
- Compressed Biogas and Feedstock Diversification: Over 100 CBG plants are operational under SATAT, with a 5% blending target by 2028. Feedstocks now range from molasses to maize.
- Green Hydrogen Initiatives: Tenders for 8.62 lakh tonnes of hydrogen and 3,000 MW of electrolysers have been awarded. Major projects are led by IOCL, BPCL, HPCL, and NRL.
- Hybrid Energy Policy Reform: The Oilfields Act 2024 enables hybrid leases. Simplified contracts for small fields ease compliance and unlock marginal reserves.
Enhancing Efficiency through Integration
- Digital Mapping and Planning Synergy: Over one lakh energy assets are mapped under PM Gati Shakti. Integration with the National Master Plan has saved ₹169 crore on projects like the Indo-Nepal pipeline.
- Simplified Contracting Systems: Policy reforms have boosted competitiveness and unlocked new production zones across sedimentary basins.
Protecting Consumer Interests
- Subsidised Pricing Amid Global Volatility: Despite a 58% surge in global LPG prices, PMUY beneficiaries pay ₹553 per cylinder through targeted subsidies.
- Stable Domestic Fuel Prices: Excise duty cuts have kept fuel prices stable, unlike in neighbouring countries.
- Energy as a Pillar of Sovereignty: India’s energy ecosystem now reflects confidence, resilience, and long-term vision for sustainability and national security.
Question for practice:
Examine how India’s energy sector reforms have contributed to its rise as the world’s fourth-largest economy.
