Hormuz crisis underlined India’s energy resilience

India demonstrated that a decade of investments in infrastructure, diversification and prudent policy can substantially reduce the impact of external shocks. The next phase must be even more ambitious

- Amitabh Kant

When the Strait of Hormuz effectively closed following military strikes on Iran earlier this year, the implications for India were immediate and profound.

Nearly one-fifth of the world’s seaborne oil passes through this narrow maritime corridor, making it the single most important chokepoint in the global energy trade. For India, which imports close to 90% of its crude oil and around 60% of its LPG, a prolonged disruption threatened not merely higher fuel prices but a wider economic shock that could have rippled through household budgets, industrial production and the country’s external finances. As the Indian crude basket climbed from the low $70s to over $120 a barrel within weeks and LPG import costs surged by almost 46%, predictions of shortages and runaway inflation became commonplace. Yet, by the time the Strait began reopening in late June, those fears had largely failed to materialise. Petrol stations remained supplied, cooking gas continued reaching households, and the economy absorbed one of the most severe external energy shocks in recent years.

That outcome did not happen because India was less exposed than other major importers. On the contrary, the crisis underlined just how dependent the country remains on imported fossil-fuels. What it also demonstrated, however, was that energy security is no longer simply about maintaining strategic petroleum reserves. It is about building resilience across an entire system where infrastructure, diplomacy, commercial relationships and institutions work together well before a crisis begins.