Introduction

The India-Vietnam Enhanced Comprehensive Strategic Partnership (ECSP), upgraded in May 2026, is grounded in shared geopolitical concerns and economic complementarities. The upgrade significantly deepens cooperation across defence, supply chain diversification, critical minerals, and financial and digital connectivity. It also aligns India’s “Act East Policy” and “Developed India @2047” with Vietnam’s “Vision of a developed country by 2045”.

Against this backdrop, the Paper argues that to understand why these two middle powers are deepening their alliances, it is important to study the geopolitical alignments, defence convergences, and economic complementarities between India and Vietnam. Given the changing power dynamics in the Indo-Pacific, the Paper also argues how Vietnam fits into this broader geopolitical balance.

To analyse the argument, the Paper draws on major international relations theories, including ‘Neorealism’, ‘Liberal Institutionalism’ and ‘Constructivism’, and reflects on why and how India and Vietnam are deepening their ties. It also examines the evolution of India-Vietnam relations and the recent upgrade to ECSP. Geopolitical balancing by both countries amid the shift in power in the Indo-Pacific is also highlighted. The Paper further explores key drivers of growth in sectors such as manufacturing, supply chains, critical minerals, human resource mobility and EV manufacturing. Finally, the Paper focuses on the immense potential of tourism and people-to-people exchanges to foster a comprehensive political and economic relationship between the two countries.

Theoretical Framework

Analysing the India-Vietnam Enhanced Comprehensive Strategic Partnership (ECSP), which encompasses robust India-Vietnam relations and critical supply-chain frameworks, requires a multidimensional approach. The Paper uses an international relations theoretical framework to analyse this partnership. The evolution of these multifaceted relations can be evaluated through the lenses of three core international theories: Neorealism, Liberal Institutionalism and Constructivism.

Neorealism highlights the anarchic nature of the international system, in which states seek to maximise security by balancing against rising threats. The primary factors shaping states’ behaviour are the distribution of power and the need to balance against potential hegemonies. From a Neorealist perspective, the India-Vietnam partnership exemplifies external balancing, particularly in response to China’s territorial claims in the South China Sea and its growing assertiveness in the Indo-Pacific. Both countries are prioritising independent foreign policies while strengthening their defence capabilities. Vietnam seeks to enhance its strategic presence by diversifying its diplomatic options through partnerships with a rising Asian power, such as India. By contrast, India uses its deepening defence and maritime ties with Vietnam as a geostrategic lever to project power in response to the rise of an assertive China and the shifting balance of power in the Indo-Pacific.

Liberal Institutionalism holds that even in an anarchic system, absolute gains can be achieved by strengthening institutional engagement. According to this view, states cooperate out of mutual self-interest, facilitated by international regimes, institutions, and economic interdependence. The liberal institutional perspective views ECSP through the lens of institutional networks and economic interdependence. Both nations are concerned not only with security balancing but also with institutional integration and economic partnerships. Bilateral agreements to raise the trade target to USD 25 billion by 2030, digital payment linkages between their central banks, and cooperation on critical rare-earth minerals have highlighted their joint efforts to build resilient supply chains. Institutional collaborations through the Indo-Pacific Oceans Initiative (IPOI) emphasise a shared security architecture, ‘freedom of navigation’, and a ‘rules-based order’ in the South China Sea. These frameworks reduce transaction costs and build long-term trust, making both economies mutually resilient to external threats.

Constructivism emphasises the role of shared ideas, norms, identities, and socialisation in shaping state behaviour. It holds that national interests are not fixed by material power alone but are socially constructed through interaction. According to Constructivism, shared history, civilisational linkages, and anti-colonial solidarity construct a powerful narrative of mutual trust and partnership. India’s ‘Act East’ policy and Vietnam’s integration into the IPOI provide the ideological and normative backbone of their alignment. Both nations share a post-colonial identity as rapidly growing, aspirational societies with complementary national visions – India’s ‘Viksit Bharat 2047’ and Vietnam’s ‘2045 Development Vision’. Their shared commitment to strategic autonomy and to the United Nations Convention on the Law of the Sea (UNCLOS) provides a strong normative foundation for cooperation. Taken together, these factors turn a strategic and security pact, amid fluctuating geopolitical pressures, into a socially constructed partnership.

Evolution of India-Vietnam Relations

The historical connections between India and Vietnam have enriched our ancient literature and mythology. Originating in the 2^nd century BCE, these linkages through trade and commerce can be traced back to the establishment of the Champa Kingdom, which flourished in what is now central and southern Vietnam. As a pivotal maritime centre, it has fundamentally shaped the region’s geopolitical landscape in ancient times. Historically, it has played a significant role in shaping the culture, commerce and connectivity between India and Vietnam^[1]. It has served as a vital bridge for the transmission of Indian social, political and cultural traditions to Southeast Asia and for forging lasting links with the Indian subcontinent.

These centuries-old ties continue to shape contemporary bilateral relations, forming a civilisational foundation for the strategic partnership between India and Vietnam today. The Hindu Kingdom of Champa and Indian Buddhist philosophy and religion also blended seamlessly with Vietnam’s indigenous belief system. India also provided “crucial moral and political support to Vietnam during its national liberation struggle against France and the United States”.^[2]

The foundation of the friendship was laid by India’s first Prime Minister, Jawaharlal Nehru, and Vietnam’s President Ho Chi Minh. As a visionary leader, Ho Chi Minh fought American troops with an unyielding spirit and became a household name in Kolkata, India, through the slogan “Mera Naam Tera Naam, Vietnam–Vietnam” (“My name and your name are the same as Vietnam”), which proclaimed solidarity with the people of Vietnam in their fight against American imperialism^[3].

The bilateral ties were upgraded to ‘Strategic Partnership’ in 2007 and to ‘Comprehensive Strategic Partnership’ (CSP) in 2016^[4]. A decade of this CSP (2016-26) and 54 years of diplomatic ties (1972-2026) have resulted in the elevation of ties to the‘Enhanced Comprehensive Strategic Partnership’ (ECSP) in 2026.

India and Vietnam have been reported as among the fastest-growing economies in the world. Both countries have achieved sustained economic growth and trade diversification over the past three decades. Vietnam’s ‘Doi Moi’ reforms of the late 1980s and India’s ‘New Economic Policy’ of 1991, both focused on liberalisation, privatisation and globalisation, mark parallel growth trajectories for both countries. Together, the two countries have pursued market-led, export-oriented growth strategies and sought to deepen their integration into regional and global value chains. Given their political histories of reform and complementarities, they have emerged as globally integrated, dynamic economies in the region.

In foreign policy and diplomacy, both India and Vietnam have recast their strategies since the late twentieth century. Economic reforms have led to diversification and greater multilateral engagement in Vietnam. India’s diplomacy in the post-Cold War era has evolved from classical non-alignment to multi-alignment, emphasising strategic autonomy within a rules-based order. Both countries have converged on a strategic outlook of multipolarity and diversified partnerships in a complex, interdependent world.

As two growing economies of the Global South, India and Vietnam have emphasised the importance of addressing shared challenges related to international law and of ensuring the voices and rights of developing countries. Leaders of both countries have also agreed to work closely on regional and international platforms to ‘promote peace, stability, and development’.

During his recent visit, President To Lam called India a “centre of growth and innovation in the world” and discussed linking the “strategic visions and development strategies of both countries to better address the turmoil in the situation of the world today”^[5]. As both countries move towards the goal of becoming‘developed countries’ – Vietnam by 2045 and India by 2047 – they share a vision for growth and mutual prosperity. It is fitting to quote Prime Minister Modi’s words, “Together, we will walk, grow, and win”, which reflect the foundational vision for collective development^[6].

Towards Enhanced Comprehensive Strategic Partnership

India and Vietnam officially elevated their bilateral relations to an ‘Enhanced Comprehensive Strategic Partnership’ (ECSP) during the State visit of the Vietnamese President, H. E. To Lam to India^[7]. The upgrade marks the 10^th anniversary of the ‘Comprehensive Strategic Partnership’ signed in 2016, deepening their bilateral cooperation. Both countries have institutionalised a multifaceted partnership in the region, anchored in defence and security cooperation, economic and green transformation, and strategic and regional alignment.

For India, Vietnam is an important factor in its ‘Act-East Policy’ and a significant partner in the ‘Vision MAHASAGAR’. As part of ECSP, Vietnam has announced its intention to join India’s ‘Indo-Pacific Ocean Initiative’ (IPOI). This integration of Vietnam into IPOI will be a strategic milestone for expanding India’s footprint in the regional architecture and enabling Vietnam to pursue geopolitical balancing.

Altogether, India and Vietnam concluded thirteen agreements during the May 2026 visit to India by the President of Vietnam, H. E. To Lam. The agreements cover a wide range of issues, including defence and maritime security; culture and tourism; critical minerals and digital technology; health and pharmaceuticals; trade, commerce and investment; and urban management and development partnership^[8].

Both nations aim to reach USD 25 billion in bilateral trade by 2030, with two-way trade currently at around USD 16 billion^[9]. While traditional items still dominate the trade basket between India and Vietnam, investments in new technology sectors, including the digital economy, technology and innovation, critical minerals, renewable and green energy, semiconductors, pharmaceuticals, healthcare, space technology, cybersecurity, the blue economy and marine technology, are increasingly significant drivers of bilateral trade growth between India and Vietnam.

Enhanced engagement in both “traditional and emerging areas of defence cooperation and defence systems procurement” between India and Vietnam has been the primary focus of the joint statement issued by the two leaders^[10]. Collaboration in “oceanography, including areas such as ocean observing platforms, data management, ocean prediction and services, capacity building and maritime scientific research” has also been emphasised^[11].

Digital technologies and critical emerging technologies have also been key themes in the joint statement between the two countries. It focuses on “facilitating greater collaboration and partnership in critical and emerging technology areas such as Digital Public Infrastructure, 6G, Artificial Intelligence, space and nuclear technology, marine sciences, biotechnology, pharmaceuticals, advanced materials and critical minerals. Cooperation will focus on practical initiatives such as joint research, R&D centres, and product development as mutually beneficial.”^[12] Under this initiative, “the Reserve Bank of India and State Bank of Vietnam” have agreed to promote financial innovation and digital payments. They have decided to link their respective platforms via QR codes for retail payments to facilitate tourism and business on both sides.

India and Vietnam are deepening bilateral healthcare ties to modernise medical infrastructure. The cooperative framework between the two countries covers digital health transformation, the integration of Artificial Intelligence into medicine, and expanded research into traditional medicine. Both countries have signed a tourism cooperation memorandum and agreed to “promote sustainable two-way tourism, including cultural and heritage, medical and wellness tourism”.^[13] They have also committed to strengthening air connectivity and logistics cooperation by expanding direct flights.

To establish institutional linkages and a formal framework enabling India and Vietnam’s largest megacities to collaborate, “a memorandum for the establishment of friendship and cooperation between the Brihanmumbai Municipal Corporation (BMC) in Mumbai and the Ho Chi Minh City People’s Committee in Vietnam has been signed.”^[14] As a key pillar of bilateral cooperation and the deepening of people-to-people ties, the joint statement focuses on “greater student, faculty and research exchanges between universities and think tanks of the two countries”. The two countries have also signed a memorandum on “documentation, conservation, digitisation and online dissemination of Cham manuscripts of Indian origin currently preserved in Vietnam”.

India-Vietnam Strategic Balancing

India and Vietnam have officially elevated their bilateral ties to an ‘Enhanced Comprehensive Strategic Partnership’ (ECSP). A core element of this upgraded framework is geostrategic balancing against China’s growing assertiveness in the South China Sea. This aligns with the combination of Vietnam’s maritime frontline position and India’s ‘Act East policy’ and broader Indo-Pacific ambitions.

Vietnam shares a sensitive land border with China and faces complex maritime disputes. It balances these pressures by cultivating deep defence and political ties with major powers. In this endeavour, India is a crucial partner for Vietnam in maintaining its strategic autonomy. For India, a strong Vietnam is a friendly partner in the Indo-Pacific, preventing unilateral domination in Southeast Asia and securing vital sea lanes of communication through which a significant share of India’s global trade flows.

Both nations advocate a ‘free, open, and rules-based’ Indo-Pacific, with strict adherence to the ‘United Nations Convention on the Law of the Sea’ (UNCLOS) and to freedom of navigation. Vietnam has joined India’s ‘Indo-Pacific Oceans Initiative’ (IPOI). This alignment reflects strategic convergence and enables close cooperation with India’s regional maritime architecture without directly forming a formal anti-China alliance.

Defence remains the cornerstone of the partnership between India and Vietnam. The two nations have established a new 2+2 Strategic Defence Dialogue and are focusing on naval interoperability, port calls, defence equipment procurement, capacity building and technology co-production. Both countries are working to enhance defence procurement. This includes advanced negotiations for Indian military exports to Vietnam, such as the BrahMos supersonic cruise missile, which Vietnam seeks to strengthen its coastal defence posture in the South China Sea.

Amid reports that Vietnam is finalising a BrahMos deal with India, a significant shift is underway in the region’s geopolitics. Although Vietnam maintains strong economic relations with China, it has increasingly sought to diversify its defence and strategic partnerships with India. Vietnam’s defence preparedness reflects China’s growing monopoly and hegemonic designs in the South China Sea and its maritime expansion, leading to a changing balance of power in the region. Furthermore, by expanding its BrahMos deal in Southeast Asia (Vietnam being the third country after the Philippines and Indonesia), India is increasing its influence and emerging as a ‘net security provider’, countering China’s hegemony in the region.

Key Economic Drivers and Sector Goals

India and Vietnam are accelerating economic integration under their ‘Enhanced Comprehensive Strategic Partnership’, aiming to “expand the bilateral trade target to USD 25 billion by 2030”. Beyond defence, the two nations aim to build resilient supply chains, enhance bilateral investment, and strengthen cooperation in the digital economy.

Manufacturing & Supply Chains: India and Vietnam are rapidly integrating their manufacturing and supply chains to form a powerful regional “China-Plus-One” alternative. The two manufacturing ecosystems are highly complementary rather than competitive. India, supported by large government programmes such as the Production Linked Incentive (PLI) Scheme, is attracting significant global investment in electronics, pharmaceuticals, and automotive manufacturing. Vietnam is actively diversifying its manufacturing sources and increasing imports of industrial inputs (such as iron, steel, and auto parts) from India to support its export needs. India also hopes to benefit from Vietnam’s highly efficient export processing zones to boost its own “Make in India” initiatives. Both nations are positioning themselves as complementary hubs for American and European businesses restructuring their global supply chains away from China.

Rare Earth and Critical Minerals: India and Vietnam are focusing on rare earths and critical minerals to secure supply chains and reduce reliance on monopolistic markets. This partnership combines Vietnam’s vast rare earth reserves with India’s surging demand and expanding processing capabilities. “Through new initiatives in critical minerals, rare earths, and energy cooperation, we will ensure the economic security and supply chain resilience of both sides.”^[15]

The Government of Vietnam has identified “the mining industry, including the rare earth minerals sector, as a priority for development, and has introduced measures to attract foreign investment, such as tax incentives, streamlined procedures for obtaining mining licences, and the establishment of industrial zones dedicated to mining and processing.” The strategic partnership between India and Vietnam on rare-earth elements makes Vietnam a crucial partner for India’s growing industrial and green technology needs. Rare-earth elements are also crucial for achieving “self-reliance and long-term security of the country, as the manufacturing of products across industries such as defence, aerospace, electronics, electrical equipment, including renewable energy, is highly dependent on the rare earth elements.”^[16]

Healthcare & Pharmaceuticals: The India-Vietnam healthcare and pharmaceutical partnership is rapidly expanding, driven by India’s position as a global supplier of generic medicines and Vietnam’s growing domestic pharma market. In light of this, Vietnam aims to increase its reliance on Indian companies for cost-effective medicines and drug procurement for its public hospitals. This reflects Vietnam’s commitment to move away from its historical reliance on a single source of supply, cementing India as its most trusted and cost-effective partner for pharmaceuticals and medical equipment. They are also collaborating on traditional medicine, digital healthcare transformation, and AI applications in the health sector.

Human Resource Mobility: India and Vietnam are rapidly deepening their bilateral relationship, with a major focus on human resource mobility and capacity building. As part of the ECSP, both countries view workforce development and human resource mobility as crucial to securing supply chains, driving economic growth, and achieving strategic autonomy in the region. India is one of the largest global exporters of healthcare professionals, including doctors and nurses, as well as highly skilled corporate employees, IT specialists, and technical advisors. Both countries have prioritised knowledge sharing and the integration of startup ecosystems by building corporate networks. In the evolving technology landscape, India’s experienced IT professionals are migrating to and partnering with Vietnam, as the country develops its digital economy and semiconductor industries. We find Indian expatriates frequently working in Vietnam as managers, tech experts, and executives in sectors such as manufacturing, renewable energy, and software.

India’s Consumer Market & The EV Boom: India’s rapidly growing consumer market is highly attractive to Vietnamese companies, particularly in the electric vehicle (EV) sector. Vietnamese EV giant VinFast views India’s market as a major priority, given the local appetite for sustainable and affordable mobility. VinFast is investing USD 500 million to build a large, integrated EV manufacturing plant in Thoothukudi, Tamil Nadu. The facility, which can scale to 150,000 vehicles annually, will allow VinFast to leverage the government’s EV manufacturing ecosystem. It has been reported that “VinFast also plans to establish a nationwide dealer network to build the brand with the commitment of good cars, good prices and excellent after-sales services.”^[17] It is also launching a “green and eco-friendly” taxi service in the Delhi-NCR region and expanding its operations to Bengaluru and Hyderabad by the end of 2026^[18].

Strengthening People-to-People Exchanges

Cultural and people-to-people ties provide the foundation on which the political and economic partnership thrives. In this regard, India and Vietnam have focused on tourism as a vital pillar of economic growth and cultural integration. The ECSP has focused on cultural, medical and wellness tourism, which will further sustainable tourism opportunities between the two countries.

The flourishing tourism sector has also acted as a catalyst for trade. Low-cost airlines such as Vietjet and IndiGo have rapidly expanded their networks, directly boosting air travel and accelerating investments in hospitality by Indian and Vietnamese conglomerates. Beyond holiday getaways, Vietnam has also emerged as a major hub for meetings, exhibitions and Indian destination weddings. This has led to an influx of Indian tourists, fostering social and cultural familiarity and adaptation. The hospitality sector in Vietnam, including hotels and local tour operators, has adapted by training staff in Indian cultural preferences and opening authentic Indian restaurants, thereby attempting to bridge the cultural gap.

Social media platforms and their feeds have amplified travellers’ wish lists for destinations such as beaches in Da Nang and Phu Quoc, heritage cities like Hoi An and Hue, and the urban landscapes of Hanoi and Ho Chi Minh City. This has shifted Indians’ perception of Vietnam from a historically war-torn country to a vibrant, culturally rich, and affordable luxury destination, an alternative to expensive European holiday destinations.

Given the deep civilisational linkages between India and Vietnam, the two countries have agreed to collaborate on digitising ancient Cham manuscripts and to promote research into their shared civilisational and Buddhist heritage. Committed to deepening academic ties and institutional research, both countries have agreed to enhance educational cooperation and academic exchanges between their institutions. This expansion of people-to-people exchanges has been a major pillar of political cooperation between the two countries, leading to growing trust and a strong public mandate for enhanced diplomatic alignment.

Conclusion

The India-Vietnam ‘Enhanced Comprehensive Strategic Partnership’ is forward-looking. It is a highly ambitious framework rooted in civilisational ties and shared geopolitical interests. Bilateral relations are underpinned by mutual interdependence in a rapidly shifting geopolitical order. Both countries firmly support a ‘free, open and rules-based’ Indo-Pacific. They share security interests to counterbalance regional security concerns and oppose any coercion by any hegemonic power.

Vietnam remains a vital anchor of India’s Act East policy. The partnership has been strengthened by Vietnam’s accession to the IPOI, which aligns with Vietnam’s regional perspective. Under ECSP, the institutionalisation of the 2+2 Defence Dialogue further reinforces the commitment to a ‘rules-based’ security architecture in the region. On the economic front, both countries have set a high bilateral trade target of USD 25 billion by 2030. They are also diversifying supply chains and strengthening digital ecosystems through strategic MOUs covering critical minerals, digital connectivity, urban governance, and fintech. Overall, this partnership serves as a model for Indo-Pacific stability, underpinned by mutual trust and confidence, ensuring economic resilience and security in the maritime domain.

To conclude, it is worth quoting from Prime Minister Modi’s speech, which draws on Lord Buddha’s teaching, “If you light a lamp for someone else, it also illuminates your own path.” Reinforcing this principle, he adds, “By supporting each other’s visions and goals, we will collectively realise our aspirations to become developed nations.”

Author Brief Bio: Prof. Sonu Trivedi is a Distinguished Fellow at the India Foundation. She is also a Professor of Political Science at Zakir Husain Delhi College, University of Delhi.

REFERENCES

^[1] Trivedi, Sonu. (2025). India-Champa: Shared Cultural Heritage in Southeast Asia, Vietnam Social Sciences Review, No. 2. pp. 26-37.

^[2] Chakraborti, T. (2008). Strategic convergence between India and Vietnam in the twenty-first century: “Look East” as a parameter. Indian Foreign Affairs Journal, 3(4), 39–54.

^[3] Trivedi, Sonu. (2025) Legacy of President Ho Chi Minh and India-Vietnam Relations. Vietnam Journal of Asian–African Studies. Volume 1, Issue 1, pp. 25-36.

^[4] Embassy of India, Hanoi (2025). Bilateral Relations, URL: https://www.indembassyhanoi.gov.in/page/bilateral-relations/

^[5] Hindustan Times (2026, May 6). India, Vietnam elevate ties, conclude 13 agreements across sectors. URL: https://www.hindustantimes.com/india-news/india-vietnam-elevate-ties-conclude-13-agreements-across-sectors-101778089308070.html

^[6] DD News (2026, May 6). India, Vietnam elevate ties; PM Modi highlights trade growth, connectivity and strategic cooperation. URL: https://ddnews.gov.in/en/india-vietnam-elevate-ties-pm-modi-highlights-trade-growth-connectivity-and-strategic-cooperation/

^[7] Ministry of External Affairs, India. (2026).

^[8] Embassy of India, Hanoi (2026). List of Outcomes: State Visit of President of the Socialist Republic of Vietnam to India. URL: https://www.indembassyhanoi.gov.in/page/list-of-outcomes-state-visit-of-president-of-the-socialist-republic-of-vietnam-to-india-may-05-07-2026/

^[9] Ministry of External Affairs, India. (2026).

^[10] Ministry of External Affairs, India. (2026).

^[11] Ministry of External Affairs, India. (2026).

^[12] Ministry of External Affairs, India. (2026).

^[13] Ministry of External Affairs, India. (2026).

^[14] Ministry of External Affairs, India. (2026).

^[15] Narendra Modi. (2026, May 6). English Translation of Prime Minister’s Press Statement during the Joint Press Statement with the General Secretary of the Communist Party of Vietnam and the President of Vietnam. URL: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2258346®=3&lang=2

^[16] EXIM Bank (2020). India Securing Rare Earth Elements. Working Paper No. 97. URL: https://www.eximbankindia.in/sites/default/files/2025-07/132file.pdf

^[17] Vinfast (2024). Vietnam’s VinFast breaks ground for ₹4,000 crore EV factory in Tamil Nadu. URL: https://vinfastauto.in/en/press-release/vietnams-vinfast-breaks-ground-for-rs4000-crore-ev-factory-in-tamil-nadu

^[18] The Telegraph (2026, May 22). Vietnam’s big electric car bet on India with plans for thousands of cabs. URL: https://www.telegraphindia.com/business/vietnams-big-electric-car-bet-on-india-with-plans-for-thousands-of-cabs/cid/2161794#goog_rewarded

 

The Indian Ocean Region (IOR) remains of immense importance to India, as it carries 40% of global commercial trade traffic and almost 70% of the world’s energy trade. India has a significant presence in the region, given its peninsular geography, which extends deep into the Indian Ocean, with the Arabian Sea and Bay of Bengal on its western and eastern sides, respectively. India, with its fast-growing economy and efforts to become a global manufacturing hub, will need to secure the maritime routes available to it for commercial trade.

Consequently, securing maritime security in the area is urgent, as these Sea Lines of Communication (SLOCs) are the main arteries for sustaining and advancing its national growth plans, securing National Security, and maintaining its influence in the region. The target of becoming a developed nation by 2047 under the ‘Viksit Bharat’ can only be achieved by adopting a multipronged strategy that ensures the continued availability of maritime routes and a credible naval presence along them, thereby mitigating any potential threat to our national interests. It is important to recognise that 95% of India’s trade and more than 90% of India’s energy imports depend on this maritime connectivity.

For decades, a global consensus held that vital maritime trade routes would not be disrupted given the catastrophic economic shocks such an action would trigger. That assumption was shattered in February 2026. The outbreak of the Israel-US conflict with Iran led to the complete closure of the Strait of Hormuz to international shipping, sending shockwaves through global energy security—with India particularly vulnerable. Consequently, global crude prices surged from a pre-war benchmark of USD 65 per barrel to a staggering USD 115 per barrel.

This has had a far-reaching impact on India and driven home a harsh lesson: India’s energy security can no longer be managed through long-term contracts. Instead, India needs a multi-pronged strategy to mitigate risks by immediately expanding strategic reserves, addressing critical chokepoint vulnerabilities through an effective countermeasure policy, and mitigating navigational challenges, including GPS disruptions and AIS spoofing for shipping vessels. India must have its own infrastructure to capture maritime awareness, strategic bilateral and multilateral partnerships with friendly energy-sourcing countries, and formidable naval influence covering this most important sea line of communications.

The Operational Layer: Anatomy of Chokepoints and SLOCs

There are four maritime routes or corridors that affect India’s energy security. Each presents both common and distinct physical, geopolitical and operational challenges. Of these, the Strait of Hormuz is the most critical chokepoint for India’s energy imports, as historically nearly 80% of Indian crude oil imports and nearly 60% of LPG needs have used this route. It is an exceptionally narrow sea route, only about 3 km wide, that is navigable by crude oil tankers and LPG vessels. The route is said to have a capacity to handle 20 million barrels per day. About 130-140 ships used to cross this narrow sea lane in the pre-war period, which has reduced to a single-digit figure post 28 Feb 2026 war. This has severely affected the movement of India-bound tankers and vessels. The effect has led India to seek alternative sources of crude oil beyond the Middle East, resulting in critical delays, increased freight rates, and higher insurance premiums. All this has resulted in a substantial increase in Indian bucket prices, which reached a peak of USD 140 per barrel, according to some reliable sources. Any prolonged escalation of these geopolitical situations will put immense pressure on India, seriously affecting its GDP growth. India has now increased the number of countries it sources crude oil from from 27 to 47 and has also raised domestic LPG production by more than 40%.

The Strait of Malacca is India’s eastern vulnerability. It handles 16 million barrels of crude oil per day and is the only maritime route connecting to energy sources in the Pacific Ocean. Nearly 60% of India’s commercial trade uses this route, and 100% of non-Gulf LNG trade passes through this vital chokepoint. Any disruption of this route will severely jeopardise India’s interests; if there is any simultaneous blockage of the western Hormuz route and the Strait of Malacca, it will be catastrophic for India. Effective maritime security is an urgent requirement for India to maintain continuity of trade via the Pacific Ocean LNG route and other commercial trade with East Asian countries.

The Bab el-Mandeb Strait and the Suez Canal collectively serve as the gateway to Europe and North Africa. Any disruption on this route, whether through drone attacks, missile batteries, or high-speed armed boats originating from coastal belt areas in this region, will seriously disrupt vessel traffic. If such asymmetrical warfare methods are used, they will force traffic to be rerouted around the African continent via the Cape of Good Hope. This will add 3,500 nautical miles, cause a 10-14-day delay, and incur exorbitant freight and insurance premiums, which will be highly detrimental to trade and the broader economic context of our country.

Tactical disruptions via GPS denial and electronic warfare severely impair the efficient navigation of ships along routes in this area. There have been reports of heavy GPS jamming and AIS spoofing in the Arabian Sea, the Gulf of Oman, and the high seas adjoining Fujairah. These tactical disruptions have led to errors in the navigation system and corrupted navigation. This is a serious issue that increases the risk of collisions and accidents involving shipping vessels. Another threat is the potential exposure of exact positions to asymmetric warfare by terrorists and rogue sea elements, which has often forced civilian ships to switch off their AIS transponders to avoid potential attacks. Therefore, for India, it has become an unavoidable requirement to preserve navigational integrity and maritime awareness by deploying its own infrastructure, including the ISRO-developed NavIC satellite navigation system, and by equipping its naval and commercial ships with these technologies. The absence of these measures will surely render our military and commercial assets in navigational darkness.

The February 2026 crisis emerging from the Israel-America-Iran war has further exposed vulnerabilities stemming from digital platforms’ weaknesses against cyberattacks, space-based weapons, and unmanned platforms powered by Artificial Intelligence (AI). This war has demonstrated how these technologies were extensively employed by America and Israel to completely destroy or deny Iranian naval resources the ability to even respond to their first attack. All the air defence infrastructure, be it on the ground or on board Iranian naval platforms, was rendered useless or completely destroyed by combining conventional airpower and naval platforms with these third-dimensional force multipliers.

These vulnerabilities are strategically significant because nearly 95% of global digital communications traffic is transmitted through submarine cable networks, many of which traverse the Indian Ocean Region. Simultaneously, the proliferation of autonomous drones, loitering munitions and low-cost precision-strike systems has reduced the barriers to asymmetric maritime disruption, enabling even non-state actors to threaten offshore energy infrastructure and commercial shipping lanes. This evolving operational environment requires us to move beyond conventional naval preparedness toward integrated maritime-electromagnetic resilience. Energy security in the coming decades will depend not only upon naval presence but also upon digital survivability, cyber resilience and uninterrupted access to secure maritime data networks. Accordingly, India’s future maritime-security architecture must incorporate anti-jamming navigation capability, indigenous satellite redundancy, AI-enabled maritime-domain awareness, cyber-secure port infrastructure and integrated civil-military digital coordination mechanisms.

Note: The above Infographic is original work generated using Google NotebookLM AI.

The Economic Buffer: India’s Strategic Reserves

In response to the severe operational and economic disruptions triggered by the 2026 crisis, India was forced to adopt major changes to its energy-security strategy. The shift reflected a broader strategic realisation that energy security depends not on procurement contracts but on effective control over logistics infrastructure, storage capacity, maritime access to routes, and supply-chain continuity. This change led to the event that during the Prime Minister’s May 2026 visit to Abu Dhabi, a series of strategic agreements were envisioned between India and the UAE.

The Strategic Petroleum Reserve was conceptualised on 16 Jun 2004. It has remained the backbone since then, with implementation carried out in phases. A further development, the adoption of out-of-the-box solutions, has emerged recently, including bilateral and multilateral agreements with friendly sourcing countries. The following are the main implementation frameworks that have emerged so far:

Phase-I Status

SPR Phase-I provides a storage capacity of 5.33 Million Metric Tonnes (MMT) which is equivalent to approximately 9.5 days of national consumption. The reserve infrastructure is distributed across three underground unlined rock cavern sites:

• Visakhapatnam (AP): 1.33 MMT
• Mangaluru (Karnataka): 1.50 MMT
• Padur (Karnataka): 2.50 MMT

In addition, India depends on the rolling inventories of the Oil Marketing Companies (OMCs) such as IOCL, BPCL, and HPCL, which include their own static storage and mobile transportation assets, amounting to 64.5 days’ worth of consumption stock. Of this total, refineries hold half in crude oil and the other half in finished products such as petrol and diesel. The total aggregated storage in these wats amounts to 74 days’ reserves. For LPG, India is completely dependent on OMC rolling inventory, amounting to 45 days of consumption and 60 days’ worth of LNG.

Phase II Expansion

Phase II received ‘in-principle’ Cabinet approval in June 2018 and financial approval under the PPP model in July 2021. However, progress was delayed due to a scarcity of funds and issues with land acquisition for the project. It is reliably learnt that, in the aftermath of the ongoing geopolitical disruptions in the Middle East, the Government has now fast-tracked the project. The SPR Phase II expansion remains critical for long-term resilience. Once fully operational, India’s standalone strategic cover could expand to approximately 22 days. The approved expansion includes:

• Chandikhol (Orissa) : 4.0 MMT
• Padur Expansion (Karnataka): 2.5 MMT
• India-UAE Strategic Reserve Framework.

In a new development, a series of strategic agreements were envisioned between India and the UAE. This arrangement could significantly increase India’s capacity for autonomous energy security insulation. Under the proposed India-UAE strategic partnership framework, ADNOC could commit approximately USD 5 billion towards infrastructure, technology and strategic storage investments. India could secure the ability to store up to 30 million barrels of crude oil within Indian reserve facilities. India could retain sovereign first-use rights during emergency conditions.

Note: The above Infographic is original work generated using NotebookLM AI.

SPR Phase I Cover: 5.33 MMT (9.5 Days).

Total Integrated Cushion: 74 Days (SPR + OMC commercial stocks).

The UAE Boost: 30-million-barrel addition to meet the 90-day IEA international goal.

The Strategic Layer: “The String of Pearls” Vs “Necklace of Diamonds”

India’s maritime energy strategy cannot be understood in isolation from China’s expanding strategic footprint across the Indian Ocean Region (IOR). Over the past decades, China, with some seemingly not-so-good intentions, has developed a network of dual-use ports, logistics nodes and infrastructure partnerships popularly known as the ‘String of Pearls’. While officially presented as commercial infrastructure under the Belt and Road Initiative (BRI), several of these facilities possess military capabilities for supporting People’s Liberation Army Navy (PLAN) operations across the Indian Ocean.

Chinese increased presence at Gwadar (Pakistan), Djibouti (Horn of Africa), Hambantota (Sri Lanka) and growing access in the Gulf region collectively create the possibility of maritime influence over the Sea Lines of Communication (SLOCs). This becomes particularly significant because India’s energy security architecture remains heavily dependent upon uninterrupted access to the Gulf.

Note: The above Infographic is original work generated using NotebookLM AI.

The challenge for India is not only a conventional Naval competition but the risk of an asymmetry. China possesses the world’s largest commercial shipbuilding ecosystem, extensive rare-earth processing capabilities, large strategic reserves, and a rapidly expanding naval reach. During periods of crisis, these advantages may translate into substantial maritime advantages, leading to influence over regional energy trade.

India’s response, through its ‘Necklace of Diamonds’ strategy, aims to establish a distributed presence rather than pure militarisation. Unlike China’s port acquisition model, India’s approach emphasises logistics partnerships, bilateral and multilateral agreements, maritime awareness, and coalition-based security arrangements. The operational strengthening of the Andaman and Nicobar Command, together with the expansion of QUAD cooperation and Gulf partnerships, reflects India’s recognition that maritime energy security will increasingly depend on regional presence, distributed logistics capabilities, and partnerships. The Andaman and Nicobar Command, located approximately 100 nautical miles from the western entrance to the Strait of Malacca, serves as a forward operating platform for maritime awareness, surveillance, logistics support, and sea-lane monitoring. INS Baaz and related infrastructure projects will significantly strengthen India’s eastern maritime presence.

To counter China’s strategic encirclement by securing access to countries surrounding India under the guise of economic and commercial partnerships, India is working to establish a counter-presence in friendly neighbouring countries to create ship repair facilities, logistics centres, and maritime awareness coalitions within a legitimate security framework. India has been developing maritime repair facilities at Vadinar in Gujarat. The facility is being developed in collaboration with Drydocks World, a DP World company, and Cochin Shipyard Limited, and in partnership with the Deen Dayal Port Authority, to create a large ship repair cluster that will also cater for repairs to naval vessels. This is in line with the Indian Government’s Maritime India Vision 2030 and Maritime Amrit Kaal Vision 2047.

Apart from this, India is focused on getting access to the following strategic nodes outside the mainland:

• Fujairah, UAE. It is one of the most strategically located nodes in the Indo-Gulf region, which provides a bypass of the Strait of Hormuz. It also provides an alternative overseas strategic storage capacity, largely immune to disruptions at the mouth of the Strait of Hormuz or in the Persian Sea.
• Duqm Port, Oman. Duqm, due to its location away from Hormuz, can again serve as a Naval refuelling hub and provide ship repair facilities.
• Chabahar Port, Iran. Despite Iran’s instability, Chabahar remains a strategically critical Indian maritime asset, to which India has invested USD 120 million, fully paid in August 2025. The investment has been made to develop the Shahid Beheshti terminal. The port provides access to Central Asia, bypass capability around land barriers, geopolitical presence within Iran, and connectivity to INSTC corridors. The investment remains linked to the International North–South Transport Corridor (INSTC), with a 750 km Chabahar–Zahedan railway line linking the port directly to Central Asia and Russia, preserving the long-term commercial intent of India’s trade bypass around Pakistan.
• Sabang Port, Indonesia. Sabang provides India with a forward eastern maritime presence near the Malacca Strait. The location strengthens bilateral patrol coordination, anti-piracy operations, and regional surveillance capability.
• Changi Naval Base, Singapore. India has inked logistics agreements with Singapore to facilitate the sustained operational presence of Indian naval assets near the southern end of the Strait of Malacca. This effectively extends India’s operational reach into the Pacific.

Physical assets and maritime deployments alone cannot secure the interests of stakeholders in the Indian Ocean. India’s maritime doctrine has therefore evolved from SAGAR (Security and Growth for All in the Region), launched in 2015, to MAHASAGAR (Mutual and Holistic Advancement for Security Across the Region), launched in March 2025. Through this endeavour, India seeks to have the world recognise that it is now willing to contribute as a global maritime stakeholder, transitioning from a regional security provider to its friendly nations.

Note: The above Infographic is original work generated using NotebookLM AI.

Conclusion and Strategic Recommendations 

The 2026 maritime crucible (Middle East War) marks a major turning point for India and the broader Indo-Pacific stakeholders. The crisis that erupted has shown that maritime chokepoints can severely disrupt both large and small nations without mercy. Weaker economies, or those that have not developed resilience in their energy security, can be severely damaged or even destroyed. Therefore, it is important to build and maintain strategic reserves of crude oil and LNG/LPG, ensure credible naval access to secure maritime routes, and deploy technological measures to counter cyber-attacks, GPS jamming, EW, and digital security threats. This is an urgent requirement to safeguard national interests, absorb such shocks, and protect the country’s economic growth. It is equally important to pursue international collaborations to mitigate the risks of any misadventures along or in the maritime trade routes. There is an immediate requirement for India to redefine its maritime security to ensure energy security and protect its broader macroeconomic interests.

Strategic Energy Resilience. India must accelerate the expansion of Strategic Petroleum Reserve (SPR) infrastructure by rapidly operationalising the Chandikhol site, the Padur expansion, and the Rajasthan salt-cavern ecosystems. Rapid-access storage architecture is most important during future maritime disruptions and energy shocks. Simultaneously, India requires dedicated underground LNG and LPG reserve systems capable of providing at least 30 days of independent strategic insulation. Gas security is now closely linked to fertilizer production and to energy availability for rural and urban consumption. It is also linked to transport networks and power generation.

Maritime and Digital Security Architecture. The crisis also demonstrated that navigational independence and maritime awareness are core national security requirements. India must therefore accelerate the deployment of NavIC-based maritime navigation systems, anti-jamming capabilities, AIS redundancy frameworks, and resilient maritime electromagnetic infrastructure. India’s future maritime security must also prioritise indigenous Intelligence, Surveillance and Reconnaissance (ISR) capabilities, integrated with space-based systems. Undersea communication cables must likewise be recognised as critical infrastructure because of their role in global financial systems, digital commerce, and military communications.

Indo-Pacific Strategic Coordination. India’s maritime security strategy must increasingly operate through regional partnerships and distributed resilience frameworks. Institutions such as IORA, BIMSTEC and the QUAD provide the foundation for a coordinated Indo-Pacific maritime security architecture focused on SLOC continuity, crisis coordination, dark-target identification and chokepoint resilience. Strategic infrastructure partnerships with the UAE, Oman, Singapore, Indonesia and Iran should evolve into long-term maritime resilience ecosystems that support logistics continuity, operational persistence and emergency energy access during periods of regional instability. Simultaneously, the QUAD framework offers substantial potential for coordinated maritime domain awareness, logistics interoperability and Indo-Pacific energy security cooperation.

Towards a National Maritime Energy Security Doctrine. A formal National Maritime Energy Security Doctrine would help institutionalise inter-ministerial coordination and align long-term strategic planning across operational, economic and technological domains. Such a doctrine would provide the foundation for India to transition from a vulnerable maritime energy consumer to a resilient Indo-Pacific maritime power. The 2026 crisis demonstrated that India’s future energy security can no longer be managed through fragmented institutional mechanisms operating independently across the defence, shipping, petroleum and digital infrastructure sectors. India presently lacks a unified doctrinal framework that integrates naval operations, strategic reserves, maritime infrastructure, cyber resilience, energy logistics and economic continuity planning.

For India, the future of energy security increasingly depends on ownership of energy resources and the ability to secure maritime access to them across contested oceanic trade routes. India’s energy security architecture needs to be shaped not only by procurement contracts but also by logistics resilience, chokepoint-bypass capability, maritime awareness, technological sovereignty, and strategic partnerships. The 2026 crisis demonstrated that maritime geography remains the ultimate determinant of energy continuity in an interconnected global economy. Future conflicts are likely to span physical, digital, electromagnetic and economic domains. This necessitates India developing integrated, dependable frameworks rather than conventional models. India’s evolving response is being shaped by strategic reserves, distributed maritime partnerships, digital platform maturity, naval modernisation and regional diplomacy. This marks a major transition from reactive dependence to a proactive approach. If India can sustain this through long-term institutional coordination and investment, this transformation could position India not merely as a major energy consumer but as a stabilising Indo-Pacific power. In the present and the future, energy security is no longer defined by possession of fuel reserves alone but by uninterrupted control over the maritime, digital and logistical systems that enable continuous energy availability.

Author Brief Bio: Wg Cdr Sanjay Kamra (Veteran) is an Electrical and Aeronautical Engineer, PMP-certified strategic advisor and former Indian Air Force officer with 30+ years of experience in defence communications, telecom infrastructure, RF systems, UAV ISR and strategic technology programmes. He advises defence, aerospace, telecom and emerging technology organizations on secure communications, critical infrastructure and government engagement.
Endnotes:

1. Ministry of External Affairs, Government of India, “Prime Minister’s Visit to the United Arab Emirates (May 15, 2026),” May 15, 2026, https://www.mea.gov.in/press-releases.htm?dtl/41146/Prime+Ministers+visit+to+the+United+Arab+Emirates+May+15+2026.
2. Press Information Bureau, Government of India, “Prime Minister’s Visit to the UAE,” May 15, 2026, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2261611&lang=1®=3.
3. Prime Minister’s Office, Government of India, “List of Outcomes: PM’s Visit to the UAE,” May 15, 2026, https://www.pmindia.gov.in/en/news_updates/list-of-outcomes-pms-visit-to-the-uae/.
4. Prime Minister’s Office, Government of India, “List of Outcomes: Visit of His Highness Sheikh Mohamed bin Zayed Al Nahyan, President of UAE to India,” January 19, 2026, https://www.pmindia.gov.in/en/news_updates/list-of-outcomes-visit-of-his-highness-sheikh-mohamed-bin-zayed-al-nahyan-president-of-uae-to-india/.
5. Petroleum Planning and Analysis Cell (PPAC), Ministry of Petroleum and Natural Gas, Government of India, Ready Reckoner: Oil and Gas Industry Information at a Glance, FY 2025–26 (New Delhi: PPAC, 2026).
6. Indian Strategic Petroleum Reserves Limited (ISPRL), Strategic Petroleum Reserve Facilities: Technical and Operational Status Reports for Visakhapatnam, Mangaluru, Padur, and Chandikhol (New Delhi: ISPRL, 2026).
7. “Strategic Reconfiguration of Indo-Gulf Energy and Security Relations: A Geopolitical Analysis of the May 2026 India-UAE Agreements,” research paper, 2026.
8. Discovery Alert, “PM Modi UAE Visit: India-UAE Energy Partnership 2026,” 2026.
9. Discovery IQ, “ADNOC India Energy Storage and LNG Agreements Explained 2026,” 2026.
10. Abu Dhabi National Oil Company (ADNOC), “Strategic Collaboration Agreement between ADNOC and Indian Strategic Petroleum Reserves Limited,” May 2026.
11. Abu Dhabi National Oil Company (ADNOC), “Strategic Collaboration Agreement between ADNOC and Indian Oil Corporation Limited on Crude Oil and LPG Supply,” May 2026.
12. “India’s Strategic Petroleum Reserves to Get Boost from ADNOC,” S&P Global Commodity Insights, May 15, 2026.
13. “UAE-India Energy Security Partnership Strengthened by New ADNOC Agreements,” Energy Connects, May 2026.
14. “UAE, India Agree to Expand Energy Supply Partnership,” Rigzone, May 2026.
15. “Energy to Defence, India, UAE Deepen Ties as PM Modi Calls for Open Hormuz,” The Indian Express, May 2026.
16. “India-UAE Energy Agreement: This Emirati Strategy Has Power,” The Economic Times, May 2026.
17. “India-UAE Oil Reserve Pact Raises Hopes for Chandikhol SPR Project,” The New Indian Express, May 2026.
18. “India-UAE Trade Relations and the Strategic Value of Recent Agreements,” India Narrative, 2026.
19. “India-UAE Energy Deal 2026: Strategic Crude Shield Explained,” Defencera, 2026.
20. Ministry of External Affairs, Government of India, “List of Outcomes: Prime Minister’s Visit to the UAE (May 15, 2026),” May 15, 2026, https://www.mea.gov.in/bilateral-documents.htm?dtl/41145/List_of_Outcomes_Prime_Ministers_Visit_to_the_UAE_May_15_2026.
21. Reuters, “India Deepens Defence, Energy Ties with UAE during PM Modi Visit,” May 15, 2026, https://www.reuters.com/world/india/india-signs-pacts-with-uae-defence-petroleum-during-modis-visit-2026-05-15/.
22. “PM Modi in UAE: India Signs Defence, Gas Supply and Strategic Oil Reserves Pacts with Abu Dhabi,” The Economic Times, May 15, 2026.
23. “Short Trip, Big Results: Seven Crucial Deals Inked by PM Modi in UAE,” The Times of India, May 15, 2026.

 

Introduction: Chokepoint Paradox and multiplex Geopolitics

Strategic debates in India view national sovereignty in terms of territorial boundaries and continental security concerns. Yet, recent crisis around the Strait of Hormuz demonstrates that ‘India’s economic stability is equally dependent upon secure maritime trade corridors and resilient diplomatic partnerships requiring continuous regional cooperation.^[1]’

As the world’s third-largest energy consumer, India’s economic growth remains heavily dependent on vulnerable maritime trade routes, creating what may be termed the “Chokepoint Paradox.” Historically, as Angus Maddison (2006) observed, India and China dominated global wealth through expansive trade networks^[2].

Modern supply chains operate through dispersed production hubs and maritime transit networks.  Under the present ‘Multiplex World Order^[3]’, sea lane stability is no longer guaranteed by a single naval power. As Kishore Mahbubani’s “Great Convergence^[4] suggest maritime stability increasingly depends upon cooperative management of shared space.

Yet contemporary policy remains hindered by ‘sea blindness’, prioritising land borders while underestimating the maritime foundations of national security.^[5] Major chokepoints such as the Strait of Hormuz, the Strait of Malacca, and the Bab el-Mandeb remain vital corridors of global energy trade. They remain vulnerable to weaponised interdependence^[6] of global economic and supply networks. Any constriction here rapidly affects freight costs, energy prices, industrial supply chains and the uninterrupted flow of hydrocarbons.

For too long, India’s ‘Maritime Strategy’ has emphasised naval force projection and the use of naval capability to secure uninterrupted energy flows. This approach is insufficient under present maritime conditions. India must move beyond a purely military understanding of sea control^[7] to a broader maritime security, energy-resilient, and regional cooperation framework – namely “Multidimensional Energy Sovereignty (MES) framework”. By combining strategic planning with diplomacy, the framework operationalises India’s Maritime Goodwill Curve (IMGC)^[8] and will help our nation transition from a ‘reactive security provider’ to a ‘proactive role’ in shaping regional maritime stability.

Strategic Fragility: Limitations of Conventional Maritime Security

The present-day ‘maritime threat environment’ extends beyond the reach of traditional naval responses. It has evolved significantly from the period dominated by Somali piracy, a comparatively limited maritime threat, to a more complex phase of ‘Hybrid Maritime Conflict’. Current threats increasingly include low-cost loitering munitions, Unmanned Underwater Vehicles (UUVs), and autonomous drone swarms. ‘Grey-zone tactics exploit the ambiguous space between peacetime commerce and open conflict.’^[9]

Vulnerabilities of Hub-and-Spoke Supply Model.

Modern maritime logistics primarily relies on the Hub-and-Spoke (H&S) model, in which multiple regional sourcing locations (spokes) feed into centralised transit hubs before passing through critical maritime passages.^[10] Although efficient under stable commercial conditions, it creates major concentration risks when these primary hubs or chokepoints are contested. During periods of asymmetric conflict, the high volume in these corridors makes them a high-value strategic target.

Carrier Battle Group (CBG) vs. 300% Insurance Premium

A Carrier Battle Group (CBG) alone cannot resolve prolonged maritime instability. Although it provides substantial deterrent capability, it also heightens concerns about regional escalation.^[11] Transit premiums for vessels navigating contested chokepoints rise significantly during periods of instability, thereby substantially increasing commercial shipping costs. Analysis indicates that insurance premiums increased from the standard 0.07% of hull value to over 1.0%, resulting in a 300% to 500% increase in insurance costs.^[12] Figure 3, ‘War Risk Surcharge Volatility’ diagram, placed here for the period 2023-2026, highlights the massive cost liabilities.

CBG or Naval deployments alone cannot fully resolve this insurance crisis due to three structural asymmetries:

1. Cost-Exchange Asymmetry. We all understand that intercepting a ‘$20,000 Shahed-type drone with a $2.1 million SM-2 or $4.3 million SM-6 missile’^[13] is operationally effective but financially unsustainable. Similarly, the insurance markets recognise the financial limits of such defensive responses during a prolonged crisis.
2. Defensive Bubble vs. Dispersed Fleet. A CBG requires a substantial internal defensive screen to protect itself. It cannot provide point defence for individual merchant tankers scattered across a 500-mile transit corridor. Mandating convoys introduces ‘time-on-risk’ delays, increasing the actuarial probability of a mass-casualty event.
3. Signal of Conflict. The arrival of a heavy naval task force acts as a force multiplier for market panic. It signals imminent kinetic escalation to reinsurance markets, permanently embedding “War Risk” clauses in maritime contracts.

Achilles’ Heel of Air-Sea Integration: Tanker Vulnerability & Incomplete AAR

The tactical limitations of carrier air elements are compounded by an operational bottleneck: India’s incomplete Air-to-Air Refuelling (AAR) capability and the fragility of support tankers in contested airspace.^[14] Without persistent, long-range combat air patrols (CAP) over distant SLOCs, merchant vessels remain vulnerable to ballistic missiles and loitering munitions. Extending these air arcs requires a continuous AAR pipeline. However, the recent asymmetric downing of two large, non-stealthy refuellers highlights the catastrophic vulnerability of force-multiplier fleets.^[15]

These lumbering, high-signature targets face immediate neutralisation. Their loss causes immediate fuel starvation for the forward-deployed fighter fleet, collapsing defensive air cover and leaving the naval task force and shipping exposed to saturation strikes. India’s current inventory of heavy refuellers (Il-78 MKI) is structurally limited in both volume and availability.^[16] Attempting to patrol the Western Indian Ocean or the Bab-el-Mandeb with an incomplete, vulnerable AAR capability would invite operational paralysis. A Navy cannot command the surface if its aerial logistical spine can be severed by a single, low-cost munition. To secure sea lanes, India requires deep strategic goodwill in the littorals rather than mere naval firepower.

Maritime Goodwill Curve: Four-Dimensional Doctrine of Influence

To move beyond purely military responses, India needs to address the persistent trust deficit in key littoral regions bordering critical chokepoints. Classical geopolitical thinking, particularly Mackinder’s Heartland framework, “The Round World model”, revisited for the Indo-Pacific, reveals that controlling global sea lanes and island chains is an important geopolitical factor in the Indo-Pacific.^[17]

To win and preserve regional peace, India’s Maritime Goodwill Curve (IMGC) framework offers a practical and more cooperative strategic approach.^[18] It posits that energy transit security increasingly depends on the level of strategic trust with the littoral state.^[19] Goodwill here is not merely symbolic diplomacy. It’s a measurable strategic asset. As Joseph Nye states, it’s a highly ‘Quantifiable Smart Power Asset’ with layered strategic advantage. Let us expand this doctrine within a four-dimensional operational framework to establish broader maritime resilience.

Near-Space: Space-Based Domain Awareness.

Modern maritime security is increasingly linked to space-based infrastructure. To deter asymmetric threats before they reach maritime chokepoints, we need to improve coordination between space and maritime surveillance systems. By integrating the capabilities of the Defence Space Agency (DSA) and ISRO, India can maintain continuous satellite-based maritime monitoring. This can be achieved by leveraging the CARTO, RISAT, and GSAT-7 (Rukmini) satellite series, along with the EMISAT electronic intelligence constellation. This space-to-sea linkage shall form an integrated early-warning network to support IMGC operations. By sharing satellite-derived, real-time early warnings with friendly regional partners, India can identify drone activity and piracy threats before they directly affect shipping lanes.

Sub-Surface: Underwater Vulnerabilities.

Subsea pipelines and communication cables form a critical part of global infrastructure. They are among the most vulnerable components of energy sovereignty. The surface fleet has limited ability to monitor sub-surface sabotage. This vulnerability of undersea communications cables was evident in Bab-el-Mandeb.^[20] Rather than relying on continuous physical monitoring of the seabed, IMGC must operationalise shared Underwater Domain Awareness (UDA). By investing in the hydrographic and sensor capabilities of littoral partners, India can improve underwater monitoring capabilities while building a collaborative, regional, real-time underwater surveillance network.

Surface: SLOC & Chokepoint Security

This domain yields the most immediate ‘Goodwill Dividend’. At the surface tier, maritime sovereignty is maintained through Strategic Equidistance – using diplomatic agility to navigate a heavily sanctioned world as a trusted partner rather than a hegemonic threat. Regionally, high goodwill serves as an economic metric that directly lowers war-risk surcharges. When littoral states perceive India as a collaborative, non-threatening partner, operational friction and security premiums for Indian-flagged energy hulls decrease sharply.

Hinterland Tier: Port-to-Pillar Connectivity and ANC.

The maritime security continuum must extend inland to include critical infrastructure that receives, stores, and distributes imported energy. In the context of the Andaman & Nicobar Command (ANC), India’s island chains remain a paramount national asset.

As late as early 2015, the Cabinet Committee on Infrastructure Enhancement & Security in GoI was considering ways to enhance the employability of infrastructure and strategic assets in the A&N islands.^[21] With the 2019 institutionalisation of the Chief of Defence Staff and our joint theatre command still in fieri, it’s time to reorient the latter towards India’s geo-economic security. This can be achieved by tethering our coastal energy hubs and Strategic Petroleum Reserves (SPR) to regional littoral networks. We can transform these domestic stockpiles into vital nodes within a resilient, transnational energy grid.

Operationalising Goodwill Dividend: Five Pillars of Statecraft 

Maritime goodwill curve acts as a catalyst for five substantive pillars of national resilience, bridging the vital gap between naval strategy and geo-economics:-

Pillar 1: The Economic Dividend (Stabilising the Landed Cost). In the context of modern chokepoint volatility, the primary threat to India’s sovereignty is inflationary contagion from imported energy. When the Strait of Hormuz became contested, economic friction was evident in dramatically higher P&I insurance premiums. Unlike kinetic defence, which invites reciprocal aggression, the Goodwill Curve signals regional stability. By maintaining high-trust partnerships (through HADR, joint patrols, and capacity building), India actively reduces underwriters’ perceived risk, thereby protecting India’s GDP from external geopolitical shocks. This synergy between international diplomacy and maritime operations is critical to stabilising the maritime supply chain.^[22]

Pillar 2: Asymmetric Counter-Warfare (Intelligence over Intercepts). Rather than attempting to ‘out-missile drone swarms’, the Goodwill Curve operationalises Regional Intelligence Fusion. High levels of strategic trust enable the forward placement of sensors and the seamless sharing of real-time intelligence with littoral partners (e.g., Oman, UAE, Djibouti). An early-warning data point shared by a friendly littoral neighbour is infinitely more valuable than a multi-million-dollar interceptor launched in isolation.

Pillar 3: Dynamic SPR Leadership (Regional Energy Safety Net). While India’s Phase II SPR expansion (adding a planned 4.0 Million Metric Tons (MMT) at Chandikhol and 2.5 MMT at Padur II under a commercial-cum-strategic Public-Private Partnership (PPP) model) is a critical domestic imperative,^[23] the Goodwill Curve enables the Strategic Petroleum Reserves (SPR) to serve as a regional diplomatic asset. By positioning India as a regional energy guarantor, domestic stockpiles act as a stabilising force across the entire IOR. This transforms the SPR from a passive stockpile into an active tool of energy statecraft, ensuring our littoral partners are deeply invested in the safety of the sea lanes that supply our tanks.^[24]

Pillar 4: Boardroom ESG Governance (Fiduciary Sovereignty). The mandate for national security must move swiftly from the Ministry of Defence (MoD) to the corporate boardrooms of India’s energy giants. We must reclassify maritime security as a core tenet of Environmental, Social, and Governance (ESG) strategy.^[25]

“When the security of national supply chains is treated merely as an external logistics cost rather than an internal fiduciary duty, we surrender our industrial sovereignty to market volatility.” – Dr Harinder Singh.

For India’s energy PSUs, supply chain integrity is a primary fiduciary duty to the nation. Integrating environmental sustainability and developmental economics into maritime operations ensures that both private and public corporate capital support strategic national objectives.^[26]

Pillar 5: The Human Frontline (The Merchant Mariner’s Resilience). The disruptions in the Strait of Hormuz and Bab el-Mandeb have taken an agonising psychological toll on merchant mariners, the unheralded frontline workers of global energy transit. True sovereignty is maintained by those who man the hull. The Goodwill Curve mandates establishing regional “Safe Havens” and rapid-response medical infrastructure for mariners in trusted littoral states.

Policy Recommendations

To institutionalise the ‘Goodwill Dividend’ and secure ‘Multidimensional Energy Sovereignty’ across all tiers of the strategic continuum, India’s strategic establishment must move aggressively beyond silos. Here, a six-tier policy matrix is proposed to operationalise the Maritime Goodwill Curve as India’s primary grand strategic instrument, as follows:

1. Establishing a Maritime-Energy-Space Secretariat (MESS)

The foremost structural bottleneck in India’s current strategic architecture is the siloed operations of key departments. It is proposed to establish a unified Maritime-Energy-Space Secretariat (MESS) directly under the Prime Minister’s Office (PMO) and the National Security Council Secretariat (NSCS). MESS will structurally integrate tri-service military imperatives with the geo-economic mandates of MoPNG, the orbital vigilance of ISRO and the Defence Space Agency (DSA). By unifying the strategic triad of space tracking, naval positioning, and energy procurement into a single, real-time command loop, India can preemptively
neutralise chokepoint vulnerabilities before they trigger global market panics.

2. Tactical Air-Sea Logistical Spine: Next-Gen dual-use AAR Leasing.

To overcome critical Air-to-Air Refuelling (AAR) shortfalls and mitigate tanker vulnerability, India must implement a ‘Tactical Air-Sea Logistical Spine’ – an integrated air-sea logistics framework – via a dual-use ‘Public-Private Partnership’ (PPP). By leasing and converting commercial wide-body airliners (e.g., A330S and 767s) into Multi-Role Tanker Transports (MRTTs), India can bypass the lengthy capital acquisition process. Forward deployment of these assets through bilateral logistics agreements with partners such as Oman, the UAE and Djibouti will help decentralise refuelling infrastructure and reduce concentration risk. This will also dramatically extend sustained combat air patrol coverage over critical SLOCs
without major additional expenditure.

3. Space-to-Sea Domain Sharing and Maritime Surveillance.

There is a need to use space-based capabilities as a form of strategic diplomatic engagement. It is proposed to establish a ‘Sovereign Space-Domain Sharing Protocol’ with IOR littoral states. Through this framework, India’s DSA and ISRO will share real-time, non-classified maritime domain awareness (MDA) telemetry, weather-monitoring data, and dark-shipping detection analytics directly with the coastal radar networks and maritime operations centres of regional partners. By acting as a regional space-based maritime surveillance partner, India will reinforce its status as a trusted and indispensable partner. It will also shift the regional balance of power from a purely hard-power approach to one of ‘long-term strategic
dependence’ in maritime matters.

4. Seabed Digital & Energy Infrastructure Framework: Indian Ocean Seabed Framework.

One of the major infrastructural vulnerabilities lies in the hidden, unprotected seabed lattice. To address this, India should spearhead a ‘Seabed Infrastructure Protection Group’ within IORA to foster regional cooperation on subsea security. Through Joint Underwater Domain Awareness (JUDA), India can support littoral states with hydrographic surveys, shared sensor networks, and indigenous autonomous underwater vehicles (AUVs) to monitor their EEZs. Such cooperation would improve the protection of critical digital and energy infrastructure. It would also limit opportunities for underwater espionage and sabotage while improving regional underwater awareness.

5. Sovereign “Goodwill Bonds” and the Blue Economy Resilience Fund.

To counter the predatory infrastructure diplomacy of rival powers, India should establish a ‘Blue Economy Resilience Fund’ backed by government-guaranteed “Goodwill Bonds” to offer littoral nations sustainable, transparent development alternatives. This fund will finance non-predatory maritime infrastructure, such as solar-powered coastal ports, ecological conservation zones, and sustainable fisheries, across key island chains and critical littoral nodes. Unlike competitors’ debt traps, this developmental model preserves the host nations’ sovereignty, earning India immense diplomatic capital that translates directly into long-term transit safety for its energy fleets.

6. Corporate Fiduciary Mandate “Boardroom to Bridge” ESG Disclosures.

Energy security is a shared responsibility. To bridge the gap between military commands and corporate headquarters, energy security must be treated as a boardroom-level fiduciary duty rather than an external logistics externality. It is recommended that the Securities and Exchange Board of India (SEBI) and the Ministry of Corporate Affairs (MCA) mandate major energy PSUs and private conglomerates to incorporate a quantitative “Maritime Supply Chain Integrity & Geopolitical Risk Index” into their annual Business Responsibility and Sustainability Reporting (BRSR) under the Environment, Security and Governance (ESG) framework. Recognising these geopolitical risks in ESG reporting can encourage corporate investment in regional stability initiatives, vessel protection measures, and mariners’ welfare.

Conclusion: Beyond the Gauntlet

India’s long-term maritime security cannot rely solely on Carrier Battle Groups (CBGs) or air power supported by AAR. The evolving Indo-Pacific environment demands a broader framework that integrates maritime resilience, energy security, regional trust, and cooperative statecraft. India’s Maritime Goodwill Curve (IMGC) links regional cooperation to operational stability across critical maritime corridors. In an era shaped by hybrid threats, vulnerable SLOCs and chokepoints, disrupted supply chains, and weaponised interdependence, goodwill must be understood not merely as symbolic diplomacy but as a practical strategic asset.

For India, functioning solely as a “Net Security Provider” is no longer sufficient. The changing maritime environment requires sustained regional influence, trust, and cooperative engagement. India must increasingly become a “Net Influence Generator” capable of shaping long-term maritime stability across the Indo-Pacific. From satellite-enabled maritime awareness and seabed infrastructure security to petroleum reserves and regional partnerships, sovereignty in the twenty-first century has become multidimensional. Maritime influence today depends not only on deterrent capability but also on resilience, connectivity, credibility, and sustained engagement.

Strategy must therefore move beyond reactive security responses toward a maritime order founded upon credible partnerships, economic resilience, and cooperative regional frameworks.

Author Brief Bio: Captain (IN) (Dr.) Harinder Singh, a scholar-warrior, holds a PhD (BITS Pilani), MBA (JBIMS), MSc (DSSC), CSSBB (MSME Agra), BSc, ADIT (CDAC) et al.  He is also an MCA-certified Corporate Governance expert & an Independent Director (IICA). Pioneer of “India’s Maritime Goodwill Curve,” he specialises in space-aviation-sea integration, Sciences & national security, developmental economics, and corporate ESG frameworks, effectively bridging joint naval statecraft and boardroom geo-economics.

Endnotes

^[1] Harinder Singh, “India’s Maritime Goodwill Curve (IMGC): Prospects & Feasibility Analysis,” Research at BITS 2020, BITS Pilani HSS Serial 22 (2020): 15, http://hdl.handle.net/10603/472806.

^[2]  Angus Maddison, The World Economy: A Millennial Perspective (Paris: OECD Development Centre Studies, 2006).

^[3]  Amitav Acharya, “After Liberal Hegemony: The Advent of a Multiplex World Order,” Ethics & International Affairs 31, no. 3 (September 2017): 271–285, https://www.ethicsandinternationalaffairs.org/2017/multiplex-world-order/

^[4]  Kishore Mahbubani, The Great Convergence: Asia, the West, and the Logic of One World (New York: PublicAffairs, 2014). 

^[5] Christian Bueger and Timothy Edmunds, “Beyond Sea Blindness: A New Agenda for Maritime Security Studies,” International Affairs 93, no. 6 (November 2017): 1293–1311.

^[6]  Henry Farrell and Abraham L. Newman, “Weaponized Interdependence: How Global Economic Networks Shape State Coercion,” International Security 44, no. 1 (Summer 2019): 42–79.

^[7]  Alfred Thayer Mahan, The Influence of Sea Power Upon History, 1660–1783 (Boston: Little, Brown and Company, 1890).

^[8]  Harinder Singh, “India’s Maritime Goodwill Curve (IMGC),” 15. http://hdl.handle.net/10603/472806

^[9] R. Puchala, Asymmetric Threats in the Blue Economy (London: Maritime Press, 2025).

^[10] Harinder Singh, “India’s Maritime Goodwill Curve (IMGC),” Chapter 1, http://hdl.handle.net/10603/472806

^[11]  Robert Jervis, “Cooperation Under the Security Dilemma,” World Politics 30, no. 2 (January 1978): 167–214.

^[12]  Lloyd’s Joint War Committee, Amended Transit Areas and Surcharges for the Southern Red Sea and Gulf of Aden, JWLA-032 (London: Lloyd’s Market Association, 2024); S&P Global Commodity Insights, Red Sea Disruptions and the Impact on Global Freight Rates and War Risk Premiums (London: S&P Global, 2024).

^[13]  Mark F. Cancian, “The Cost of Protecting Red Sea Shipping,” Center for Strategic and International Studies (CSIS), February 15, 2024, https://www.csis.org/analysis/cost-protecting-red-sea-shipping; Congressional Research Service, U.S. Navy Red Sea Operations: Cost and Operational Implications for Air Defense, CRS Report R47981 (Washington, D.C.: Congressional Research Service, 2024).

^[14]  Harinder Singh, “Incomplete Combat Arcs: Tanker Vulnerability and AAR Bottlenecks in the Western Indian Ocean,” LinkedIn, March 2026, https://www.linkedin.com/posts/harrywads_geopolitics-supplychain-economy-activity-7456192740557709312-6udF.

^[15]  Ibid.

^[16]  Idid.

^[17]  R. P. Pradhan and Harinder Singh, “Island Chains & India’s Maritime Goodwill Curve: Revisiting Mackinder’s Round World,” in Connecting Asia: Understanding Foreign Relations, Organizations & Contemporary Issues, ed. Debasish Nandy (New Delhi: Kunal Books, 2020), 1–19.

^[18]  Harinder Singh, “Mackinder’s Round World & IMGC: A Perspective Towards Winning Peace in the Indo-Pacific,” in India’s Engagement with Global Powers: Issues and Challenges (New Delhi: Book Chapter, 2021), 140–159.

^[19]  Harinder Singh, “India’s Maritime Goodwill Curve (IMGC),” http://hdl.handle.net/10603/472806.

^[20]  International Cable Protection Committee, Submarine Cable Vulnerability in Chokepoints: A Briefing on the Bab-el-Mandeb Incident (Lymington: ICPC, 2024).

^[21]  Harinder Singh, “India’s Maritime Goodwill Curve (IMGC),” Chapter 4, http://hdl.handle.net/10603/472806

^[22]  Harinder Singh, “International Diplomacy and Maritime Operations: Synergy Important,” LinkedIn, 2024, https://www.linkedin.com/pulse/international-diplomacy-maritime-operations-synergy-dr-harinder-rrsuc/

^[23] ISPRL, Strategic Petroleum Reserves Phase II Expansion: Status Report (New Delhi: Indian Strategic Petroleum Reserves Limited, 2024).

^[24] Harinder Singh, “India’s Maritime Goodwill Curve (IMGC),” 15. http://hdl.handle.net/10603/472806.

^[25]  Harinder Singh, “Sailing Towards Sustainability in Maritime Ops,” LinkedIn, June 2025, https://www.linkedin.com/posts/harrywads_environmental-sustainability-in-maritime-activity-7387817153556750336-hGfx.

^[26] Ibid.

 

Introduction

As the world accelerates the deployment of renewable energy sources and green technologies, a new form of dependency is emerging in efforts to meet net-zero goals. Critical minerals needed for green technologies and renewable energy are increasingly used as a geopolitical lever amid tensions, leading to supply chain and price disruptions. Currently, China has dominance in critical minerals, especially in processing and refining.^[1] The Belt and Road Initiative (BRI) has been instrumental in helping China establish economic and diplomatic ties with mineral-rich countries, thereby enabling it to achieve dominance in processing and refining.^[2] Chinese financial institutions have also played a key role in establishing China’s dominance, particularly in processing and refining. China’s ability to finance high-risk, long-term projects has evolved since the BRI, with these projects now bankrolled by state-led banks, giving China influence in resource-rich countries.^[3] For India, which is highly import-dependent for most critical minerals needed for its net-zero ambitions,^[4]  it is essential to become atmanirbhar, i.e., self-reliant, to achieve its goal of 500 GW of clean energy by 2030 and net-zero by 2070.

Domestic Policies of India

India today stands at a critical juncture, where the energy transition needed to reduce its hydrocarbon bill risks deepening its dependence on mineral imports, as critical minerals have become the new frontiers of geopolitics. The Govt. of India launched the National Critical Mineral Mission (NCMM) in 2025 for a period of seven years, from 2024-2025 to 2030-2031, with a proposed expenditure of Rs. 16300 crore and an expected expenditure of Rs.18000 crore by Public Sector Undertakings (PSUs) and other stakeholders^[5]. There is no universal definition of what constitutes critical minerals. Countries identify critical minerals based on their importance to energy, the economy, and national security, as well as their susceptibility to supply chain disruptions and price shocks. Based on this assessment, the Govt. of India currently lists 31 minerals as critical minerals^[6].

To boost investment in the critical minerals sector, the Union Government has amended the Mines and Minerals (Development and Regulation) Act, 1957^[7] to liberalise the mining sector. The reforms simplified and expanded mineral access by allowing leaseholders to add critical minerals to existing leases at no extra cost and by removing sale restrictions on captive mines. This amendment aims to consolidate India’s mining framework flexibly to enhance critical mineral extraction. India is also the third-largest e-waste generator,^[8] and to turn this waste into a reliable source for the critical mineral supply chain, the Government of India has enacted a Rs 1500 incentive scheme for critical mineral recycling to develop recycling capacity for the separation and production of critical minerals from secondary sources.^[9]

The Government of India has also developed a policy to extract critical minerals from mine waste^[10] and, in principle, has approved a National Critical Mineral Stockpile, under which India will maintain a two-month stockpile of critical minerals, with private-sector involvement, to safeguard itself against supply-chain disruptions. In this year’s Union Budget, the Government of India has also proposed a dedicated rare-earth corridor in Odisha, Tamil Nadu and Kerala to develop a domestic ecosystem of mining, refining and manufacturing, thereby reducing import dependence and enhancing domestic capabilities in strategic sectors. The measures taken by the government underscore the importance of critical minerals to India’s development across sectors and the urgency of becoming self-reliant in this sector. However, more needs to be done for India to become self-reliant in the critical minerals needed for its energy needs.

What India Should Do

India needs to boost its exploration efforts. Although India is blessed with abundant resources, only about 20% of its geological resources have been explored^[11]. Therefore, it is essential to ramp up India’s exploration capability, with significant investments in advanced geological surveys, deep-seated mineral prospecting, and data-driven resource mapping. Mining is associated with a long gestation period, especially in metal mining, which deters investors. Research has also shown that mines take an average of 16.3 years from discovery to production, with 12.3 years of those 16.3 years spent on discovery and exploration studies.^[12] Therefore, it is imperative to leverage artificial intelligence (AI), machine learning, remote sensing and geospatial technologies for exploration as well as for recovering critical minerals. Leveraging these technologies can not only help identify deposits but also analyse geospatial datasets, reduce the risk associated with early-stage exploration and ramp up the recovery process for critical minerals. These technologies also improve the lifespan of critical machinery and have played a major role in operations and management^[13]. Therefore, it is imperative to adopt these technologies to deliver faster results, thereby helping attract private-sector investment.

India has engaged with both the Global North and the Global South to secure access to critical minerals. To complement domestic efforts, India has created KABIL, a joint venture (JV) between three PSUs, National Aluminium Company Ltd. (NALCO), Hindustan Copper Limited (HCL) and Mineral Exploration & Consultancy Ltd. (MECL), in the ratio of 40:30:30 for overseas mineral acquisition^[14]. It has multiple bilateral agreements and participates in several initiatives to diversify the critical mineral sector. However, there is a need to ramp up diplomacy to secure technology transfer agreements. While access to critical minerals is important, technology transfer is equally important, as India lags significantly in processing and refining^[15].

These partnerships should focus on rare earth separation technologies, battery-grade material processing, and recycling technologies. The government should allow foreign companies to set up processing and refining facilities in the country, either through joint ventures (JVs) with domestic companies or through other incentives. Special economic zones (SEZs) for critical mineral processing and refining can be leveraged to attract investment and enable technology transfer to Indian industries. There is also a need for collaboration between PSUs, private-sector companies, research institutions, and international partners to accelerate the development of the domestic mining value chain. The government has added 9 research institutions as Centres of Excellence (CoEs) to strengthen the mining value chain^[16]. Each CoE must bring in at least two industry partners and two research and development (R&D)/academic partners^[17].

The Government of India recognises that developing the mining chain requires an integrated approach rather than relying solely on mining. Therefore, all stakeholders with diverse expertise must collaborate to build an integrated domestic critical mineral supply chain to achieve self-reliance and move towards net-zero by 2070. India also needs to reform its regulatory clearance processes. Clearances remain the most critical bottleneck in developing India’s mineral value chain. However, under the MMDR, Part D designates critical, strategic and atomic minerals as exempt from public consultations^[18]. However, clearances under the Environment Protection Act and the Forest Protection Act remain a hurdle, as they are unpredictable, time-consuming and multi-layered, further extending the already long time periods associated with mining. India must develop a single-window, time-bound clearance mechanism, especially for critical mineral projects, to fast-track them. The fast-track mechanism should include environmental, tribal, water and forest clearances without adversely affecting the project, communities and the ecology.

India is currently evaluating a mix of tax support and fiscal incentives through outcome-linked programs to localise components needed for battery manufacturing for electric vehicles (EVs).^[19] The Ministry of Heavy Industries is running a Production Linked Incentive (PLI) scheme, namely “National Programme on Advanced Chemistry Cell (ACC) Battery Storage,” with a total outlay of ₹18,100 crore to establish 50 GWh of domestic Advanced Chemistry Cell manufacturing capacity^[20]. However, India should also prioritise developing a battery recycling ecosystem. Battery recycling remains the quickest and one of the most cost-effective ways to reduce India’s import dependence.

As India aims to have 30% of its fleets as EVs^[21], the volume of end-of-life batteries will grow; therefore, there is a need to develop a secondary supply of cobalt, nickel and lithium, which, if systematically recovered, can help in reducing import dependence, as India imports all of these critical minerals in near totality. This technology would also help insulate India from price shocks and supply chain vulnerabilities, as China currently dominates the global battery trade.^[22] The prioritisation of battery recycling will also help India develop capabilities in technologies such as hydrometallurgical and recycling technologies, which will enable India to develop midstream processing, a process in which raw mineral concentrates or ores are transformed into refined or chemically enhanced products suitable for downstream manufacturing processes^[23].

India lags significantly in midstream capability, and developing battery recycling would help India not only build midstream capacity but also support the adoption of circular economy principles. Despite being the third-largest producer of e-waste, India’s waste sector is largely informal, leading to poor metal recovery and harming the environment, public health, and the workforce.^[24] It is estimated that India generated around 6.2 million tonnes of e-waste; however, only 2 million tonnes is formally recycled.^[25] For e-waste to function as a genuine source of critical minerals, it is imperative that Extended Producer Responsibility (EPR) be strengthened. Under the Circular Economy Framework, multiple waste management rules were notified, including an EPR framework related to recycling and reuse.^[26] However, enforceability has been an issue in India because the EPR portal lacks a wide array of critical minerals needed for the energy transition.^[27] To strengthen the EPR framework for critical mineral recovery, it is essential that the EPR portal include all 31 critical minerals. It is also important to set mineral recovery targets and provide incentives for formal recycling. These reforms and incentives can help strengthen the EPR framework and, subsequently, critical mineral recovery.

There is also a need for a dedicated financing mechanism to support early-stage, high-risk critical mineral projects, as these projects have long gestation periods and uncertain returns. India can adopt the model of Japan, where the Japan Organization for Metals and Energy Security (JOGMEC), a Japanese government body, is tasked with collaborating with both government agencies and the private sector to secure a stable supply of mineral resources needed by Japanese industry. JOGMEC also assists Japanese companies with exploration and development by providing private equity capital and liability guarantees, supports the technical stage of early metal resource development, and carries out technological development.^[28]

India can also adopt a tax credit for mining exploration, in the lines of Canada’s, under which a 15% tax credit is given to investors in junior mining and exploration^[29] companies, making it easier for these companies to raise capital for early-stage exploration. While both models differ in their approach to government involvement, they converge on the principle that some form of state intervention in these projects is necessary, either directly or through policies. India can establish a fund that addresses the full spectrum of financial incentives needed to enhance the critical mineral value chain. There is also a need to develop ports and logistics infrastructure. Ports and logistics infrastructure are prerequisites for enabling the critical mineral value chain; however, they are underappreciated. India’s port investments have been tilted towards green hydrogen and ammonia handling, with Kandla, Paradip and Tuticorin designated hubs under the National Green Hydrogen Mission (NGHM)^[30].

No designated ports exist under NCMM. China recognised early on the importance of ports and logistics infrastructure. Through the BRI, China has systematically invested in infrastructure linking mineral-rich regions to shipping routes, giving it easy access to minerals in Africa and Latin America. This ensures that China controls the most cost-effective routes^[31] for critical mineral supply chains, including mines, infrastructure, and finance. This, combined with China’s dominance in processing and refining, gives China leverage over the global mining supply chain. Therefore, it is essential to identify ports and analyse the need for logistical infrastructure, both domestically and overseas, in the regions where India is acquiring mineral assets, so as to become self-reliant in critical minerals.

To develop an integrated critical minerals value chain, human capital is a fundamental component. India has to invest significantly in its human capital to become self-reliant in the critical minerals value chain. India has to build capacity in underground mining, ore handling, equipment operations and safety protocols. The Ministry of Mines, in coordination with the Skill Council of the Mining Sector, launched an initiative to train 5.7 million workers in mining-related activities by 2030, and the NCMM also has skill development as a component, aiming to train 10,000 workers.^[32] However, the skills component has to prioritise vocational training alongside technical training to develop a capable workforce in the critical mineral sector.

Developing Next-Gen Energy Carrier for Atmanirbhar Bharat and Energy Security

It is imperative for India to develop the critical mineral value chain as India aims to meet its net-zero goals, because the question is not merely about deploying resources, but about how they are stored, transported and converted across the value chain. Therefore, it is imperative to build a model where extraction is combined with recovery, production is combined with recycling, and import substitution is coupled with the circular economy. Each of the technologies needed to meet net-zero goals has varied mineral requirements, and each of those mineral requirements will have some or other supply chain vulnerabilities. Therefore, it is important to build an effective foundation for a critical mineral supply chain. In India’s context, atmanirbharta in critical minerals must be achieved through intelligent extraction, recycling and recovery.

India’s pathway to net-zero depends on technologies such as green hydrogen, green ammonia, and advanced battery chemistries. These technologies have distinct needs, so it is essential to ensure a reliable critical mineral supply chain. For instance, green hydrogen production via electrolysis requires platinum-group metals for proton exchange membrane electrolysers, and green ammonia synthesis at scale requires a reliable nitrogen infrastructure and energy storage capacity, which depend on lithium, cobalt, and nickel. Solid-state batteries, another crucial green technology for energy storage in both grid-scale applications and electric mobility, require lithium, manganese, and rare earth elements in volumes that India cannot produce domestically.

To develop these energy technologies at scale, India has to ensure that its critical minerals strategy and energy transition plans are not operating in silos. All the schemes, such as NCMM, NGHM and ACC PLI, must be brought under a single coordinating framework that aligns mineral availability projections with technology deployment. Without integrating critical mineral availability and technology deployment, India risks investing heavily in manufacturing capacity that will remain constrained by critical mineral bottlenecks.

India also has to invest in indigenous R&D for next-generation battery chemistries- particularly sodium-ion and solid-state architectures – to reduce dependence on the most geopolitically vulnerable minerals. CoEs under NCMMs have to work on alternative material pathways. Atmanirbharata in critical minerals is not a standalone objective; rather, it is the enabling condition for every net-zero ambition India has set for itself.

Author Brief Bio: Trishala Sancheti is a Research Fellow at India Foundation. She holds an MSc in International Politics from SOAS, University of London, and a Post Graduate Diploma in Business Management from XLRI Jamshedpur (online). Her professional experience spans the mining, consulting, and waste management sectors.

Endnotes:

^[1] Rodrigo Castillo and Caitlin Purdy, “China’s Role in Supplying Critical Minerals for the Global Energy Transition: What Could the Future Hold?” (Washington, DC: Brookings Institution, July 2022), https://www.brookings.edu/wp-content/uploads/2022/08/LTRC_ChinaSupplyChain.pdf.

^[2] CaixaBank Research, “China’s Alchemy: How It Transforms Critical Minerals into Global Power,” January 21, 2026, https://www.caixabankresearch.com/en/economics-markets/commodities/chinas-alchemy-how-it-transforms-critical-minerals-global-power.

^[3] Shreya Bajaj and Amit Sheoran, “Unearthing Influence: China’s Global Strategy for Transition Minerals,” SAIS Review of International Affairs, November 18, 2025, https://saisreview.sais.jhu.edu/unearthing-influence-chinas-global-strategy-for-transition-minerals/.

^[4] Keertiman Upadhyay and Romil Sethi, “India’s Critical Minerals Push Faces Funding Gap: IEEFA,” Argus Media, May 12, 2026, https://www.argusmedia.com/en/news-and-insights/latest-market-news/2825753-india-s-critical-minerals-push-faces-funding-gap-ieefa.

^[5] Ministry of Mines, Government of India, “India’s Critical Mineral Mission: Securing the Minerals of Tomorrow,” backgrounder, Press Information Bureau, September 2025, https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=155158&ModuleId=3.

^[6] Ministry of Coal, Government of India, “Government Notifies Coking Coal as Critical and Strategic Mineral under MMDR Act, 1957,” Press Information Bureau, January 29, 2026, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2219947.

^[7] “Mines and Minerals Amendment Bill Gives Liberty to Leaseholder to Add Other Minerals in Existing Lease,” News on AIR, August 19, 2025, https://newsonair.gov.in/mines-and-minerals-amendment-bill-gives-liberty-to-leaseholder-to-add-other-minerals-in-existing-lease/.

^[8] P. B. Jayakumar, “India Becomes Third Largest E-Waste Generator as Tech Boom Fuels Surge,” Fortune India, 2025, https://www.fortuneindia.com/business-news/india-becomes-third-largest-e-waste-generator-as-tech-boom-fuels-surge/121182.

^[9] Cabinet Committee on Economic Affairs, Government of India, “Cabinet Approves Rs. 1,500 Crore Incentive Scheme to Promote Critical Mineral Recycling in the Country,” Press Information Bureau, September 3, 2025, https://archive.pib.gov.in/newsite/PrintRelease.aspx?relid=275591.

^[10] Ministry of Mines, Government of India, Policy for Exploration of Critical Minerals in New Projects and Recovery of Critical Minerals from Overburden, Dumps and Tailings of Existing Mines, 2025 (New Delhi: Ministry of Mines, December 2025), https://mines.gov.in/admin/storage/ckeditor/Tailing_Policy_1770982901.pdf.

^[11] Anil Agarwal, “Critical Minerals and India’s Role in Securing a Low Carbon Global Economy,” World Economic Forum, January 17, 2025, https://www.weforum.org/stories/2025/01/critical-minerals-india-securing-low-carbon-global-economy/.

^[12] Paul Manalo, “Average Lead Time Almost 18 Years for Mines Started in 2020–23,” S&P Global Market Intelligence, April 10, 2024, https://www.spglobal.com/market-intelligence/en/news-insights/research/average-lead-time-almost-18-years-for-mines-started-in-2020-23.

^[13] Jasper Ivan Madlangbayan and Tamara Thorne, “A Peek at AI Revolution in Mining: Promise Meets Peril,” S&P Global Market Intelligence, February 6, 2025, https://www.spglobal.com/market-intelligence/en/news-insights/research/a-peek-at-ai-revolution-in-mining-promise-meets-peril.

^[14] Khanij Bidesh India Limited, “About Kabil India,” KABIL India, accessed June 3, 2026, https://kabilindia.in/.

^[15] International Trade Administration, US Department of Commerce, “India – Mining and Critical Minerals,” Country Commercial Guides, last modified April 17, 2026, https://www.trade.gov/country-commercial-guides/india-mining-and-critical-minerals.

^[16] “Ministry of Mines Recognizes Two More Centres of Excellence under the National Critical Mineral Mission,” Press Information Bureau, Ministry of Mines, Government of India, October 24, 2025, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2182381.

^[17] “Ministry of Mines Issues Guidelines for Setting up of Centres of Excellence under the National Critical Mineral Mission,” Press Information Bureau, Ministry of Mines, Government of India, April 16, 2025, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2122219.

^[18] Nikhil Ghanekar, “Environment Ministry Exempts Critical, Atomic Mineral Mining from Public Consultation,” Indian Express, September 10, 2025, https://indianexpress.com/article/india/environment-ministry-exempts-critical-atomic-mineral-mining-public-consultation-10241159/.

^[19] Twesh Mishra, “India Boosts Local Battery Component Manufacturing with Tax Incentives,” ET EnergyWorld, May 30, 2026, https://energy.economictimes.indiatimes.com/news/power/india-boosts-local-battery-component-manufacturing-with-tax-incentives/131403336.

^[20] Ministry of Heavy Industries, Government of India, “Advanced Chemistry Cell (ACC) Batteries and Domestic Capacity,” Press Information Bureau, December 12, 2025, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2202973.

^[21] Office of the Principal Scientific Adviser to the Government of India, “Electric Vehicles,” PM-STIAC Mission, accessed June 9, 2026, https://www.psa.gov.in/mission/electric-vehicles/36.

^[22] Gavin Clark, “China Dominates Global Trade of Battery Minerals,” Today in Energy, US Energy Information Administration, May 21, 2025, https://www.eia.gov/todayinenergy/detail.php?id=65305.

^[23] United Nations Economic Commission for Europe, Expert Group on Resource Management, Accelerating Midstream Value Addition for Sustainable Critical Minerals Supply Chains through the United Nations Framework Classification for Resources and the United Nations Resource Management System, Policy Brief ECE/ENERGY/GE.3/2026/3 (Geneva: UNECE, March 2026), https://unece.org/sites/default/files/2026-03/ECE_ENERGY_GE.3_2026_3_Midstream%20Value%20Policy%20Brief_EN.pdf.

^[24] Simhadri Pavankumar and Sudipta Mondal, “Unregulated and Unseen: Understanding Why the Majority of E-Waste Recycling in India Is Handled by the Informal Sector,” PCI India, February 19, 2025, https://www.pciglobal.in/unregulated-and-unseen/.

^[25] Subhrajit Goswami, “Rs 51,000 Crore Worth of Materials in India’s E-Waste, Most Slips Through the System,” Down to Earth, May 4, 2026, https://www.downtoearth.org.in/waste/rs-51000-crore-worth-of-materials-in-indias-e-wastemost-slips-through-the-system.

^[26] Ministry of Environment, Forest and Climate Change, Government of India, “Parliament Question: Circular Economy Framework and Extended Producer Responsibility,” Press Information Bureau, March 23, 2026, https://www.pib.gov.in/PressReleasePage.aspx?PRID=2244104®=3&lang=1.

^[27] Tribune News Service, “India’s E-Waste Management Framework Falls Short on Critical Minerals, Study Finds,” Tribune, February 19, 2026, https://www.tribuneindia.com/news/india/indias-e-waste-management-framework-falls-short-on-critical-minerals-study-finds/.

^[28] Japan Organization for Metals and Energy Security (JOGMEC), “Japan Organization for Metals and Energy Security (JOGMEC),” Mining Indaba, accessed June 1, 2026, https://miningindaba.com/sponsor-list/jogmec.

^[29] UNCTAD Investment Policy Hub, “Canada — Extends Tax Credit for Mining Exploration,” Investment Policy Monitor, March 3, 2025, https://investmentpolicy.unctad.org/investment-policy-monitor/measures/5333/canada-extends-tax-credit-for-mining-exploration.

^[30] Ministry of Mines, Government of India, “India’s Critical Mineral Mission: Securing the Minerals of Tomorrow,” backgrounder, Press Information Bureau, September 2025, https://www.pib.gov.in/PressNoteDetails.aspx?NoteId=155158&ModuleId=3.

^[31] Paul Nantulya, “China’s Critical Minerals Strategy in Africa,” Spotlight, Africa Center for Strategic Studies, December 9, 2025, https://africacenter.org/spotlight/china-africa-critical-minerals/.

^[32] Ministry of Mines, Government of India, “National Critical Mineral Mission

(NCMM): 2024–25 to 2030-31” (presentation, New Delhi, January 2025), https://mines.gov.in/admin/storage/ckeditor/DAY_1_PPT_4_1737542656.pdf.

 

“प्रजासुखे सुखं राज्ञः, प्रजानां च हिते हितम्”

“In the happiness of the subjects lies the ruler’s happiness; in their welfare, his welfare.”[1]

Kautilya’s old test of statecraft is crisp and unsentimental. It treats welfare not as benevolence but as the state’s practical capacity to maintain order, livelihoods, and security when pressures mount. For twenty-first-century Bharat, energy sits at the centre of that compact. A spike in crude prices, a sanctioned payment channel, a tanker delayed by conflict, an LNG cargo diverted, or a mineral supply chain squeezed does not remain confined to ministries and markets. It enters freight rates, fertiliser costs, aviation margins, factory output, household cooking bills, and the everyday confidence of citizens. Energy insecurity, in that sense, is never only about fuel. It is about the state’s ability to protect national life from external volatility.

India’s energy question has therefore moved squarely into the realm of strategic autonomy. India is still building and expanding at continental scale: roads, homes, ports, industrial corridors, data centres, transport networks and manufacturing clusters. As India works towards becoming a leading global power, it must ensure an uninterrupted, sustained supply of energy. The challenge is not only to secure that energy, but also to do so without allowing every external shock to narrow national policy space. The old oil-security instinct was to diversify suppliers. That remains necessary, but the present disorder demands a thicker cushion. Sanctions, shipping insurance, payment systems, maritime chokepoints, LNG contracts, refinery flexibility, solar equipment and critical minerals now sit within the same security conversation.

Former President A.P.J. Abdul Kalam recognised the stakes in development when he called energy independence India’s “first and highest priority.”[2] For India, energy independence cannot mean autarky in every molecule, machine and mineral. That would be economically unrealistic and strategically limiting. The more serious aim is energy autonomy through managed interdependence: using global markets where they serve India, building domestic capacity where dependence poses a strategic risk, and ensuring that no single pressure point can narrow India’s strategic choices.

The evolution of the International Energy Agency reflects this widening. Founded in 1974 to ensure the security of oil supplies, the IEA’s work now extends beyond oil to natural gas, electricity systems and clean-energy supply chains.[3] For India, this widening is not an abstract shift in energy vocabulary. Its challenge is no longer simply to buy enough oil at a tolerable price, but to keep growth steady when risk can arise from crude and LNG cargoes, maritime chokepoints, refinery flexibility, power grids, solar modules, batteries and minerals. Strategic redundancy is India’s answer to this condition. The goal is not to withdraw from interdependence, but to build sufficient depth across suppliers, routes, reserves, technologies and domestic capabilities so that dependence remains manageable and never hardens into vulnerability.

From Diversification to Strategic Redundancy

Daniel Yergin’s warning remains relevant: “The definition of energy security needs to be expanded” to meet the pressures of a globalised world.[4] For India, that expansion now means strategic redundancy. Diversification remains necessary because no large importer can afford excessive dependence on a single supplier, route or political region. But diversification alone is no longer sufficient when disruption can spread through sanctions, insurance, shipping routes, refinery compatibility, LNG contracts, cyber risks, grids, solar factories and mineral processing. India’s task, therefore, is not merely to multiply sources of supply, but to build depth across the energy system so that a shock in one part does not become a national vulnerability.

The older idea of energy security assumed that the main danger lay at the point of supply: an embargo, a war in an oil-producing region, a cartel decision, or a sudden price spike. Countries responded by diversifying their sources of supply. That remains necessary, but it no longer captures the full nature of risk. A cargo may be available yet difficult to insure; a supplier may be willing, but payments may be constrained; a route may remain open, yet freight costs may surge; a clean-energy target may be sound, yet modules, batteries or minerals may be concentrated elsewhere. The vulnerability, in other words, is no longer confined to the energy source. It can sit anywhere along the chain that connects energy to national life.

Strategic redundancy is the discipline that addresses this condition. It is not duplication for its own sake, nor a retreat into autarky. It is the creation of cushions across the system: alternative suppliers when a market tightens, alternative routes when a chokepoint comes under stress, reserves that buy time, flexible refineries and contracts that preserve choice, domestic capacities that reduce exposure, and institutions that can coordinate quickly when pressure builds. In ordinary commerce, redundancy may appear inefficient. In national strategy, it is what prevents dependence from becoming coercion.

Oil Diplomacy in a Sanctions-Heavy Order

Oil remains the first test of this approach because India’s development story is still tied to imported hydrocarbons. PPAC data show the scale of the system that India must manage: crude oil imports stood at 245.769 million tonnes in the latest reported annual cycle.[5] This is not a vulnerability confined to the petroleum sector. It touches freight, food inflation, aviation, fertilisers, the current account and household budgets.

The war in Ukraine gave India’s oil diplomacy a sharper edge. India’s purchase of discounted Russian crude was often interpreted abroad as an alignment. For New Delhi, it was also a matter of economic responsibility. A developing economy cannot treat affordable energy as a diplomatic luxury. Its first obligation is to keep prices, mobility and industrial activity stable for its citizens. Strategic autonomy, in this context, is not a posture but the freedom to make energy choices according to national need.

However, discounted crude is not a doctrine. Replacing one dependence with another would merely shift vulnerability from one point to another. The real strength lies in optionality. India has continued to engage its traditional Gulf partners, bought from Russia when commercial and strategic conditions allowed, and broadened sourcing from other geographies. The Ministry of Petroleum and Natural Gas has noted that India now imports crude from around 40 countries, with about 70 per cent of crude imports coming through routes outside the Strait of Hormuz, compared with about 55 per cent earlier.[6] That is strategic redundancy in practice.

This matters because oil diplomacy today is not merely a buyer-seller relationship. It encompasses crude grades, refinery configuration, freight, insurance, payment channels and domestic price management. India’s refining system, with its ability to process a range of crude grades, gives the country room to respond to shifting discounts and availability. But refining capacity must be supported by maritime access and financial flexibility. In a sanctions-heavy world, crude availability is only one part of security; the real test is whether shipping, insurance, payments, refining and domestic distribution can continue without interruption.

West Asia will remain central to this equation. India’s ties with Saudi Arabia, the UAE, Iraq, Qatar and other regional partners span energy, diaspora, remittances, investment, logistics and strategic consultation. The evolving Iran-Israel-US crisis has only underlined this logic. India has kept diplomatic channels open across the region, called for de-escalation and dialogue, and remained attentive to the security of key shipping routes.[7] The right direction is already clear: continuity with old partners, expansion of new options, and sufficient route diversity to ensure that no single region becomes a point of compulsion.

Gas and LNG: Transition Fuel Under Geopolitical Conditions

Natural gas is often described as a transition fuel. It is cleaner than coal in many applications and is important for fertilisers, city gas, industry, transport and power balancing. India has set a target to raise the share of natural gas in its energy mix from 6.7 per cent to 15 per cent by 2030.[8] That ambition is sensible, but gas will serve India’s transition only if its price, supply and infrastructure risks are carefully managed. Recent years have shown how quickly gas markets can turn unforgiving. Europe’s search for alternatives to Russian pipeline gas tightened global LNG markets and affected Asian buyers. For India, which has price-sensitive consumers and industries, excessive exposure to spot LNG can be costly. Long-term contracts offer stability, but they must retain flexibility. The 20-year LNG agreement between Petronet LNG and QatarEnergy for 7.5 million tonnes per annum, beginning in 2028, reflects this search for dependable supply.[9] Yet even long-term supply is only one part of security. India also needs sufficient terminal capacity, pipeline connectivity, city gas expansion and pricing arrangements that allow gas to reach consumers without becoming a shock transmitter.

The movement towards a national gas grid, expanded LNG terminals, city gas distribution and policy reforms for a gas-based economy shows that India is not treating gas merely as an imported commodity.[10] It is being integrated into the country’s wider development system. A molecule of LNG matters only when it can be received, re-gasified, transported, priced and used in fertilisers, industry, transport or households. Gas carries its own maritime exposure. LNG may enter India through terminals on its coast, but its reliability is shaped long before it reaches them — in Gulf stability, shipping lanes, freight costs and contract terms. A disruption in West Asia can therefore affect not only crude oil but also LNG flows. Gas may be a transition fuel, but for India it is also a strategic fuel: useful only if it strengthens the energy transition without introducing a new layer of price and route vulnerability.

The Ocean as Energy Infrastructure

The Ocean is integral to India’s energy infrastructure. Tankers and LNG carriers link Indian refineries, fertiliser plants, power systems and households to some of the world’s most politically sensitive passages. Hormuz, Malacca, Bab el-Mandeb, Suez and the Red Sea are not merely map points. They are corridors through which energy, inflation and strategic risk travel. The Strait of Hormuz remains the most visible pressure point. EIA data show that flows through Hormuz in 2024 and the first quarter of 2025 accounted for more than one-quarter of global seaborne oil trade and about one-fifth of global oil and petroleum-product consumption. Around one-fifth of global LNG trade also passed through Hormuz in 2024, primarily from Qatar.[11] The Red Sea system carries a similar warning. In the first half of 2023, the Suez Canal, SUMED pipeline and Bab el-Mandeb handled about 12 per cent of seaborne oil trade and 8 per cent of global LNG trade.[12]

These numbers matter because disruption at sea rarely stays at sea. A vessel forced to reroute incurs additional time, insurance, fuel costs and uncertainty. A delayed LNG cargo can disrupt power, fertiliser and industrial calculations. Higher freight costs can feed into domestic prices long before citizens know which passage was under stress. UNCTAD’s Review of Maritime Transport 2024 notes that over 80 per cent of world trade by volume moves by sea, with chokepoints increasingly exposed to geopolitical tension, conflict and climate stress.[13]

India’s response is already moving beyond the narrow idea of naval presence. Naval capacity is indispensable, but energy security at sea also rests on port resilience, maritime domain awareness, logistics partnerships, white-shipping agreements, island-state cooperation and crisis coordination. The SAGAR vision — Security and Growth for All in the Region — has given India a language for this wider role in the Indian Ocean.[14] It is increasingly part of India’s energy-security vocabulary.

India’s interest is straightforward: sea lanes must remain open, secure and predictable. Chokepoints must not be allowed to become instruments of coercion. For India, keeping the ocean stable is not only a maritime objective; it is also tied to development, inflation management, industrial continuity and the everyday security of households.

Strategic Reserves and Domestic Buffers

Strategic Petroleum Reserves are not merely storage facilities. They are time-buying instruments. In an energy crisis, time is strategic capital: it allows the government to arrange alternative cargoes, calm markets, support refiners, protect essential sectors and prevent uncertainty from turning into panic. India’s Strategic Petroleum Reserve capacity totals 5.33 million tonnes at Visakhapatnam, Mangaluru and Padur. The government has also approved two additional commercial-cum-strategic reserves of 6.5 MMT at Chandikhol and Padur under a public-private partnership model.[15] Such reserves are not intended to carry the economy through an indefinite disruption. Their value lies in the first days of pressure, when they can steady markets, protect essential sectors and give the state time to arrange alternatives.

The value of a reserve lies not only in the volume of crude it holds, but also in how well it is integrated with the wider energy system. Commercial inventories, refinery stocks, port logistics, crude grades, release protocols and demand management all matter. An emergency release is not a mechanical act; it requires judgement on timing, location, refinery compatibility and market signalling. India’s move towards expanding strategic storage and adopting commercial-cum-strategic models reflects a practical understanding of this balance: reserves must remain financially viable, but their purpose is national continuity.

Domestic buffers add a second layer of protection. India advanced its E20 target from 2030 to 2025, and the government has reported 20 per cent ethanol blending for the current Ethanol Supply Year.[16] This marginally reduces exposure to petrol imports, supports rural value chains, and links farmers to the fuel economy. It is not a complete answer to energy dependence, nor should it be treated as one. Feedstock, water use and vehicle compatibility require careful management. But as part of a wider buffer, ethanol has clear strategic value.

Green hydrogen belongs to a different horizon. The National Green Hydrogen Mission, with an outlay of ₹19,744 crore, targets 5 million tonnes of annual green hydrogen production by 2030.[17] Its promise lies in sectors that are hard to electrify directly — refining, fertilisers, steel, shipping and heavy industry. Here again, the point is not a single substitute but system depth. Efficiency is the least dramatic but most durable buffer. Better appliances, industrial energy management, building codes, public transport and logistics planning reduce import pressure without spectacle. In a turbulent world, the energy that is not wasted is ultimately the energy that doesn’t have to be imported.

Solar, ISA and Clean-energy Sovereignty

India’s renewable expansion is now central to its energy future. MNRE reported an installed renewable energy capacity of 220.10 GW as of 31 March 2025, within India’s broader 500 GW non-fossil capacity target by 2030.[18] But capacity addition, by itself, does not settle the sovereignty question. Clean energy reduces dependence on fuel imports, but it can create new dependencies if the equipment, storage and minerals underpinning it remain concentrated elsewhere. Solar power is the clearest case. The IEA notes that China’s share across all major stages of solar-panel manufacturing — polysilicon, ingots, wafers, cells and modules — exceeds 80 per cent.[19] That concentration has helped reduce global costs, but it also carries strategic risk. A country that replaces imported crude with imported clean-energy hardware reduces one vulnerability while creating another.

India’s response has been to deploy at scale while deepening domestic manufacturing. The Production Linked Incentive scheme for high-efficiency solar PV modules aims to create nearly 48 GW of domestic module manufacturing capacity.[20] The emphasis on integrated capacity matters because module assembly alone cannot secure India if cells, wafers, polysilicon and equipment remain externally dependent.

The International Solar Alliance provides India with a broader platform. Its “Towards 1000” strategy aims to mobilise USD 1 trillion in solar investment by 2030, provide energy access to 1 billion people, and install 1,000 GW of solar capacity.[21] ISA is an instrument of development diplomacy and of Global South institution-building. The same sovereignty question now arises in critical minerals. Lithium, cobalt, nickel, graphite, copper and rare earths are central to batteries, storage, EVs, grids, wind turbines, electronics and defence technologies. Vulnerability often lies not only in mining but also in processing and refining. A country can possess reserves and still remain dependent if it lacks the ability to process them.

The IEA’s Global Critical Minerals Outlook 2025 shows the pace of change: lithium demand rose by nearly 30 per cent in 2024, while demand for nickel, cobalt, graphite and rare earths rose by 6–8 per cent.[22] India’s National Critical Mineral Mission, approved with an outlay of ₹34,300 crore over seven years, covers exploration, mining, beneficiation, processing and recovery from end-of-life products; GSI has been tasked with 1,200 exploration projects from 2024–25 to 2030–31.[23] This is precisely the whole-chain thinking the transition requires. The transition must therefore reduce old dependencies without creating new ones. For India, clean energy will become truly strategic only when deployment is matched by manufacturing depth, mineral security and control over the technologies that carry the transition.

Institutions and the Larger Doctrine

Strategic redundancy must move from phrase to practice. India’s energy governance is necessarily spread across petroleum, power, renewable energy, mines, shipping, external affairs, commerce, finance, heavy industries, the environment, regulators, public-sector enterprises and state governments. Each handles part of the system; the strength lies in ensuring risk is not viewed in fragments. India’s current policy direction already contains the building blocks of this approach: crude-source diversification, routes outside Hormuz, SPR expansion, ethanol blending, green hydrogen, solar manufacturing, critical-mineral exploration, maritime cooperation and renewable deployment. These are not scattered initiatives. They show a state steadily building energy depth across fuels, technologies, routes and institutions.

The need for coordination becomes clearest during a disruption. A shipping shock can involve petroleum, shipping, finance, external affairs and ports. A critical-mineral restriction can affect mines, heavy industry, power, commerce and technology. A delay in solar equipment can disrupt renewable targets, grid planning and industrial policy. A cyberattack on port-energy logistics can quickly escalate from a technical incident to an economic concern. The point is simple: energy risk does not respect departmental boundaries. This is why risk assessment, scenario planning and stress-testing matter. Temporary pressure in Hormuz, Red Sea rerouting, LNG price spikes, refinery outages, payment-channel stress or mineral-processing restrictions are not remote possibilities for a large importing economy. Route-risk mapping, supplier concentration assessments, critical-mineral tracking, SPR release protocols and clear public communication during shocks would strengthen the direction India has already begun to pursue.

Industry and states are central to this effort. Refiners, ports, shipping firms, insurers, power producers, miners and manufacturers carry much of the operational burden. States handle land, transmission, industrial clusters, distribution-company health, mining clearances, port capacity and local acceptance. The Union government sets the strategic direction, but energy security becomes real only when that direction moves through markets, ministries and states into everyday execution.

Conclusion: From Scale to Strategic Weight

India’s rise will require more energy, even as the economy becomes more efficient. A country of India’s size and ambition cannot build prosperity on fragile supply lines. It needs oil and gas for the transition period, reliable electricity for industry, clean power for climate credibility, minerals for manufacturing, and institutions that can withstand a hostile external environment. The temptation in energy debates is to seek certainty in one direction. Some speak as if hydrocarbons will remain dominant indefinitely. Others speak as if renewables will dissolve dependence by themselves. India cannot afford either simplification. It must secure oil and gas without allowing them to delay cleaner systems. It must expand renewables without creating new supply-chain captivity. It must use global markets without allowing them to become instruments of coercion.

Strategic redundancy offers a practical way through this tension. It involves building sufficient depth – in suppliers, routes, reserves, contracts, domestic capacity, transition fuels, clean technologies, minerals and institutions – to preserve national choice. As India navigates the demands of growth and the pressures of a fragmented world, energy security will be central to its journey from a large economy to a leading power.

Author Brief Bio: Maitridevi Sisodia is the Deputy Collector, Ahmedabad and an award-winning author. She is passionate about women empowerment, heritage conservation and social equality.

[1] Kautilya, Arthashastra, bk. 1, chap. 19, “The Duties of a King,” trans. R. Shamasastry, https://archive.org/stream/Arthasastra_English_Translation/Arthashastra_of_Chanakya_-_English_djvu.txt.

[2] A. P. J. Abdul Kalam, “Address at the First Convocation of the University of Petroleum and Energy Studies,” August 27, 2005, President of India Archives, https://presidentofindia.nic.in/dr-apj-abdul-kalam/speeches/address-first-convocation-university-petroleum-and-energy-studies.

[3] International Energy Agency (IEA), “History of the IEA,” https://www.iea.org/about/mission/history-of-the-iea; International Energy Agency (IEA), “Energy Security,” https://www.iea.org/topics/energy-security.

[4] Daniel Yergin, “Ensuring Energy Security,” Foreign Affairs 85, no. 2 (March/April 2006), https://www.foreignaffairs.com/world/ensuring-energy-security.

[5] Petroleum Planning and Analysis Cell (PPAC), Ministry of Petroleum and Natural Gas, Government of India, “Import/Export of Crude Oil and Petroleum Products,” https://ppac.gov.in/import-export.

[6] Ministry of Petroleum and Natural Gas, Government of India, “70% of India’s Crude Imports Now Routed Outside Strait of Hormuz; Energy Supplies Remain Secure,” Press Information Bureau, March 11, 2026, https://pib.gov.in/PressReleasePage.aspx?PRID=2238525&lang=1®=3.

[7] Prime Minister’s Office, Government of India, “PM Speaks with President of Iran Regarding Prevailing Situation in the Region,” Press Information Bureau, June 22, 2025, https://pib.gov.in/PressReleasePage.aspx?PRID=2138687; “Israel, Iran War: India Sourcing Oil, Gas from All Avenues; Efforts to Continue in Coming Days, Says PM Modi,” The Economic Times, 2026, https://economictimes.indiatimes.com/news/india/israel-iran-war-pm-modi-pushes-de-escalation-hormuz-opening-in-rajya-sabha/articleshow/129771404.cms.

[8] Ministry of Petroleum and Natural Gas, Government of India, “Share of Natural Gas in Total Energy Mix,” Press Information Bureau, December 18, 2023, https://pib.gov.in/Pressreleaseshare.aspx?PRID=1987803.

[9] Petronet LNG Limited, “Petronet LNG Limited Executes Long-Term Contract for Purchase of 7.5 MMTPA LNG with QatarEnergy,” February 6, 2024, https://www.petronetlng.in/w/petronet-lng-limited-executes-long-term-contract-for-purchase-of-7.5-mmtpa-lng-with-qatarenergy-1.

[10] Ministry of Petroleum and Natural Gas, Government of India, “Government Boosts LNG Use with 100% FDI, New Stations, and Policy Reforms,” Press Information Bureau, August 7, 2025, https://pib.gov.in/PressReleasePage.aspx?PRID=2153679; Ministry of Petroleum and Natural Gas, Government of India, “One Nation, One Gas Grid,” Press Information Bureau, accessed June 17, 2026, https://pib.gov.in/PressReleasePage.aspx?PRID=2200386.

[11] U.S. Energy Information Administration (EIA), “Amid Regional Conflict, the Strait of Hormuz Remains Critical Oil Chokepoint,” June 2025, https://www.eia.gov/todayinenergy/detail.php?id=65504.

[12] U.S. Energy Information Administration (EIA), “Red Sea Chokepoints Are Critical for International Oil and Natural Gas Flows,” 2023, https://www.eia.gov/todayinenergy/detail.php?id=61025.

[13] United Nations Conference on Trade and Development (UNCTAD), Review of Maritime Transport 2024 (Geneva: UNCTAD, 2024), https://unctad.org/publication/review-maritime-transport-2024.

[14] Press Information Bureau, Government of India, “Indian Navy’s Maiden Initiatives of Indian Ocean Ship SAGAR and Africa India Key Maritime Engagement,” March 24, 2025, https://pib.gov.in/PressReleasePage.aspx?PRID=2114491.

[15] Press Information Bureau, Government of India, “Government Steps to Strengthen Strategic Petroleum Reserves,” March 24, 2025, https://pib.gov.in/PressReleasePage.aspx?PRID=2113233.

[16] Ministry of Petroleum and Natural Gas, Government of India, “Ethanol Blending Update,” Press Information Bureau, https://pib.gov.in/PressReleasePage.aspx?PRID=2154355.

[17] Press Information Bureau, Government of India, “National Green Hydrogen Mission,” July 24, 2024, https://pib.gov.in/PressReleasePage.aspx?PRID=2039091.

[18] Ministry of New and Renewable Energy, Government of India, “Renewable Energy Capacity Update,” Press Information Bureau, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2120729.

[19] International Energy Agency (IEA), Solar PV Global Supply Chains: Executive Summary (Paris: IEA, 2022), https://www.iea.org/reports/solar-pv-global-supply-chains/executive-summary.

[20] Press Information Bureau, Government of India, “Government Allocates 39,600 MW of Domestic Solar PV Module Manufacturing Capacity under PLI,” March 28, 2023, https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1911380.

[21] International Solar Alliance, “Towards 1000 Strategy,” Press Information Bureau, Government of India, https://pib.gov.in/PressReleasePage.aspx?PRID=2071486.

[22] International Energy Agency (IEA), Global Critical Minerals Outlook 2025: Executive Summary (Paris: IEA, 2025), https://www.iea.org/reports/global-critical-minerals-outlook-2025/executive-summary.

[23] Press Information Bureau, Government of India, “National Critical Mineral Mission: Powering India’s Clean Energy Future,” April 9, 2025, https://pib.gov.in/PressReleasePage.aspx?PRID=2120525.

 

India is at a crucial point in its energy journey. With about 389.42 billion tonnes of coal resources, including 47.3 billion tonnes of lignite, the country ranks fifth in the world for coal reserves. It set a record by producing 1.047 billion tonnes in FY 2024-25. However, this wealth has a major weakness: India imports 85-89% of its crude oil. This dependence leaves the economy vulnerable to geopolitical events, results in annual foreign exchange outflows exceeding USD 100 billion, and creates problems for transport and petrochemical supply chains.

Sustainable coal use in India must move beyond the unrestrained growth of conventional combustion. It requires a deliberate shift towards processes such as beneficiation and washing, mine-mouth power generation, and industrial heating. Other key methods include entrained-flow gasification, Indirect Coal Liquefaction (ICL) with Fischer-Tropsch synthesis, and Coal-to-Chemicals (CTC) co-production of methanol, ammonia, urea, and DME. We also need to focus on Carbon Capture, Utilisation, and Storage (CCUS) clusters and on circular fuel substitution using alternatives such as RDF, biomass, industrial waste, and plastic thermolysis. This approach will help free up high-value coal for strategic conversion.

Key Findings from Techno-Economic and Global Analysis

The Ten-Point Problem Statement (synthesised from the prompt and validated against technical annexes):

1. Low Coal Quality and Non-Coking Dominance: The vast majority of reserves are thermal (non-coking) grades, unsuitable for metallurgy without blending; high moisture and variable GCV (2,500–6,500 kcal/kg) reduce combustion efficiency.

2. High Ash and Contaminants (25–45% Ash Typical): Renders direct combustion inefficient and polluting; increases handling, boiler maintenance, and ash disposal burdens; yet this very characteristic favours entrained-flow gasification with slagging systems, where impurities can be managed pre-combustion.

3. Regional Underdevelopment in Coal Belts: Jharkhand (26.4% reserves, ~83 Bt), Odisha (~25%, ~79 Bt), and Chhattisgarh (~18%, ~57 Bt) together dominate, yet these states exhibit lower HDI, higher multidimensional poverty, a history of insurgency (e.g., Left-Wing Extremism corridors), and weaker institutional capacity—creating risks of leakage, illegal mining, and social instability.

4. Freight Congestion and Long-Haul Inefficiency: The majority of coal mined in the east and central belts is transported 1,000–2,000+ km to western, northern, and southern demand centres; this ties up dedicated rail capacity, inflates logistics costs, and generates dust and spillage externalities.

5. Petroleum Import Vulnerability: 85–89% dependence on crude imports creates exposure to price volatility (e.g., the 2022 spikes), supplier concentration risks, and strategic chokepoints; synthetic fuels from domestic coal offer a partial but meaningful hedge.

6. Leakage-Prone Logistics and Governance Gaps: Pilferage, theft, grade manipulation, and illegal extraction are estimated to account for several per cent of production; weak digital traceability and enforcement in remote mining areas.

7. Climate Pressure and Decarbonisation Commitments: Coal remains indispensable in the medium term, yet India’s Net Zero 2070 pledge, updated NDCs, and international scrutiny (G7, COP processes) demand measurable reductions in emission intensity; unabated CTL would be incompatible without CCUS.

8. Governance Fragmentation: The coal value chain spans the Ministry of Coal (mining), Power (generation), Petroleum & Natural Gas (fuels/fertilisers), Steel (metallurgical), Chemicals & Fertilisers, Railways (logistics), Environment (clearances/CCUS), and Finance (fiscal instruments)—no single coordinating mechanism exists for integrated conversion pathways.

9. Underused Waste-to-Energy and Circular Substitution: Industrial by-products (oil sludge, PET waste, paper rejects, rubber dust, biomass) offer 100–200 Mt of coal-equivalent displacement potential annually; the cement sector’s Thermal Substitution Rate (TSR) averages only 5–7% (top plants 25–30%), compared with EU benchmarks of >50–100% in leading facilities; CPCB guidelines (2016/2023) exist, but enforcement and scale-up lag.

10. Need for Mine-Mouth Integrated Thermal and Gasification Development: The current paradigm of raw-coal evacuation to distant end-users is economically and strategically suboptimal; pithead power, gasification, ICL, ammonia-urea, methanol, and materials clusters co-located with mines can convert low-grade coal into transportable, higher-value products while generating local employment and reducing rail burden.

These ten issues are not merely technical; they are structural and institutional. Addressing them requires a paradigm shift from volume maximisation (more tonnes mined and transported) to value maximisation (the highest strategic use of each tonne: coking for steel, washed thermal for efficient power, low-grade/high-ash for gasification/CTL/CCUS, and substitutes for substitutable industrial heat). ICL is preferred over Direct Coal Liquefaction (DCL) in India because it offers greater flexibility for handling high-ash domestic feedstock. It allows easier removal of impurities, including sulphur, mercury, and particulates. Additionally, it integrates well with pre-combustion CCUS and enables the co-production of high-value chemicals and fertilisers. Energy efficiency ranges from 45 to 55 per cent, with a liquid yield of 1.1 to 1.3 barrels of synfuel per tonne of coal.

Regarding economies of scale, the optimal plant size ranges from 50,000 to 100,000 barrels per day (bpd). The estimated capital expenditure is between USD 6 and 9 billion, including CCUS. The breakeven oil price is between USD 70 and 100 per barrel and depends on co-product credits and carbon pricing. With CCUS, lifecycle emissions decrease from around 900 kg CO₂ per barrel to between 250 and 350 kg CO₂ per barrel, representing a reduction of 60 to 90 per cent. Water is a significant constraint. The process uses 8 to 12 barrels of water for each barrel of synfuel, necessitating zero-liquid discharge (ZLD), mine-water utilisation, and closed-loop recycling as essential practices. There is considerable potential for import substitution. Large-scale deployment of ICL/CTC in the eastern and central coal belts could replace 10 to 15 per cent of oil imports by 2035, equivalent to about 35 to 50 million tonnes of crude equivalent annually. This shift can also help create strategic synthetic fuel reserves for defence, aviation, and crisis resilience.

The 2026 Fertiliser Crisis: A Frozen Price and an Exploding Bill

In April–May 2026, as the Strait of Hormuz effectively closed amid geopolitical tensions, Indian Potash Limited secured the largest urea tender in the country’s history, at nearly double the price of two months earlier. Diammonium phosphate (DAP) tenders followed at record landed costs. Yet in a Vidarbha fertiliser shop, the 45-kg bag of urea continued to sell for ₹242 — the same price it has been at since 1 April 2018.

India pays roughly ₹ 3,600 to land that bag at the port. The farmer pays ₹ 242. The ₹ 3,358 gap, scaled across ~35 million tonnes of annual urea consumption, is the central operating principle of Indian fertiliser policy. The result: a projected FY27 subsidy bill exceeding ₹ 2 lakh crore — the highest peacetime outgo in the instrument’s history — even before the full impact of disrupted imports and domestic gas curtailments (a 25% drop in March 2026) is felt.

This is not merely a fiscal problem. It is a structural vulnerability: heavy dependence on imported urea, ammonia, and natural gas feedstock, exposed to every chokepoint from Hormuz to Red Sea disruptions. The policy of absorbing every global price spike on the exchequer to protect the farmer has worked — but at mounting and ultimately unsustainable cost.

The Coal Opportunity: From Volume to Value

India holds 389 billion tonnes of coal resources, including vast high-ash thermal grades (25–45% ash) that are suboptimal for long-haul power generation but ideally suited for modern entrained-flow gasification. The May 2026 policy research paper, Sustainable Coal Application for Energy Security and Petroleum Import Substitution (Basu, Bhandarkar & Sahu), provides a rigorous techno-economic and governance framework to convert this endowment into a strategic asset — specifically for the fertiliser sector.

The core mechanism is straightforward and already proven at pilot scale in India: Coal (high-ash, mine-mouth) → Gasification (oxygen/steam → syngas: CO + HJ) → Ammonia synthesis → Urea production. This is not speculative. The Talcher Fertiliser Ltd project in Odisha (coal/petcoke gasification to urea, methanol, and SNG) is under construction and represents India’s flagship demonstration. Scaling this model across mine-mouth clusters in Talcher-Ib Valley, Korba-Raigarh, and Jharia-Bokaro directly attacks the import dependence and price volatility that define the current crisis.

How Gasification Directly Solves the Four Core Problems of the 2026 Crisis

1. Import Dependence & Forex Outflow. India’s fertiliser vulnerability is largely an ammonia and urea import problem, compounded by natural gas feedstock risk. Coal gasification produces syngas domestically, enabling on-site or nearby ammonia-urea production. The coal paper quantifies that scaled ICL/CTC deployment (with co-production of ammonia/urea) can deliver meaningful substitution — reducing the need for imported merchant ammonia and finished urea. Every tonne of coal converted to urea at the mine-mouth displaces a tonne of imported urea or ammonia, directly easing the current account and insulating against Hormuz-style shocks.

2. Domestic Production Resilience. The March 2026 gas curtailment, which cut domestic urea output by 25%, would have been far less damaging if a meaningful share of ammonia synthesis had shifted to coal-derived syngas. Mine-mouth plants are not hostage to pipeline gas allocation priorities. They create a parallel, coal-based production backbone that complements gas-based plants and, over time, reduces pressure on them.

3. Long-Term Subsidy Trajectory. The current system is a ratchet: global prices rise → subsidy bill explodes → MRP stays frozen. Coal-based urea has a different cost structure. While initial capex for gasification and ammonia-urea complexes is high (USD 6–9+ billion for large integrated plants), marginal costs are tied to domestic coal (stable, allocated under policy) rather than to volatile imported spot urea or LNG. Over time, as more supply shifts to this controlled-cost base, the average subsidy per bag declines — even if the printed MRP remains politically frozen. The coal paper’s emphasis on co-production (urea + methanol + power + chemicals) further improves project economics and reduces the net fiscal burden per unit of fertiliser output.

4. Regional Development & Political Sustainability. The fertiliser subsidy is politically untouchable because it protects 14 crore landholdings. But the coal paper adds a powerful pro-coal constituency: the coal-bearing districts of eastern and central India (Jharkhand, Odisha, Chhattisgarh). Mine-mouth clusters create formal, skilled jobs in gasification, ammonia synthesis, CCUS operations, and ancillary industries — precisely in regions with histories of underdevelopment and insurgency. A credible just-transition framework (community equity, skilling, local content) turns potential opposition into stakeholder support, making the overall policy coalition more durable than one based solely on subsidy absorption.

Policy Architecture Proposed 

• Establish a National Sustainable Coal and Carbon Conversion Mission under the Cabinet Secretariat/PMO, coordinating the Ministries of Coal, Petroleum & Natural Gas, Power, Steel, Chemicals & Fertilisers, Railways, Environment, Forest & Climate Change, and Finance.
• Create a Technical Standards Council (BHEL, CIL, GAIL, NTPC, SAIL, IOC, CIMFR, academic labs) to standardise gasifier/CTL modules, adapt to high-ash coal, and develop CCUS protocols.
• Designate integrated coal-conversion industrial regions (Talcher-Ib Valley, Korba-Raigarh, Jharia-Bokaro corridors) with fast-track clearances tied to strict environmental performance bonds.
• Deploy policy instruments: Viability Gap Funding (VGF) and concessional sovereign debt for first-of-a-kind ICL+CCUS plants; revenue-share rebates and feedstock allocation priority for gasification/CTL coal; carbon contracts for difference (CCfD) or equivalent for CCUS outperformers; mandatory ZLD, methane monitoring, and digital traceability; and freight pricing reform reflecting the full system costs of long-haul raw coal.

Phased Roadmap

Phase I (2026–2030). Establish 3 to 5 major mining clusters at the mines. These clusters will ensure that the minerals are properly processed and digitally tracked. Also, use waste materials and biomass in cement and heat production, aiming for 15 to 20% of energy to come from these sources. A technical council and a special mission will also be launched.

Phase II (2030 to 2040). Focus on establishing carbon capture and utilisation projects across regions. This involves transporting and storing CO₂, using it for coal-bed methane recovery, storing it in saline aquifers, and converting it into minerals. Also, build networks to transport methanol, syngas and synthetic fuels. The use of these products in key sectors such as defence, railways and fertilisers could be supported by the government.

Phase III (2040 to 2050).  Set carbon limits for the entire production lifecycle (less than 200 kg of CO₂ per barrel equivalent) and ensure that biomass is co-fed and that renewable hydrogen is used in production. Integrate the above with the National Hydrogen Mission and review progress going forward. 

Projected Outcomes by 2035 (under supportive policy)

10–15% oil import substitution; 50–80 Mt coal redirected to high-value gasification/CTL; 200,000+ skilled jobs in coal districts; 60–90% emission intensity reduction in conversion pathways; strengthened energy sovereignty and balance-of-payments resilience.

This paper provides the evidence base, international comparative analysis, and actionable ministry-level implementation framework to transform India’s coal endowment from a source of vulnerability into a strategic asset for energy security, industrial competitiveness, and an orderly transition to Net Zero 2070. 

Global Benchmarks and Lessons from Leading CTL and Clean Coal Nations

India is not operating in isolation. Global experience provides both proof of concept and cautionary lessons for CTL/CCUS deployment at scale. 

China

The Shenhua Ningxia CTL Complex, the world’s largest integrated facility, is located at the Ningdong Energy and Chemical Industry Base in Yinchuan, Ningxia Hui Autonomous Region (arid northwest; water-stressed context analogous to parts of India’s coal belts). The scale and investment are as follows:

• Total complex: ~235,000 bpd liquid fuels (Phase I DCL ~24,000 bpd; Phases II/III ICL ~210,000 bpd).
• Coal input: >20 Mt/year. – Investment: ~USD 7.9 billion (state-backed). – Products: 2.7 Mt diesel, 0.98 Mt naphtha, 0.34 Mt LPG + by-products (sulfur, ammonium sulfate, mixed alcohols). – Efficiency: ~42% coal-to-liquids conversion.

Technology & Environmental Controls:

• Hybrid: Initial DCL (Shenhua proprietary, iron-based catalyst, 460°C/190 bar) + massive ICL (Siemens/MAN syngas coolers + Chinese HTFT).
• Zero Liquid Discharge (ZLD): Aquatech system recycles >55 million litres/day; critical for arid locations.
• CCUS Demonstration: Captures portion of concentrated process CO₂ for EOR in nearby fields; full-scale pilots advancing. Lifecycle CO₂ ~7.95 t/t product (base) → ~4.5 t/t (with CCS).
• Emission controls: Advanced particulate, SOx, NOx; vitrified slag utilised in construction.
• Economics: Breakeven USD 60–80/bbl (lower than generic estimates due to vertical integration—owns mines—economies of scale, and by-product revenue). State strategic priority overrides pure merchant economics.

Lessons for India: Scale matters: 100k+ bpd plants achieve competitive unit costs. – ICL route dominates expansion (feedstock flexibility for high-ash Chinese coals mirrors India). ZLD and CCUS are non-negotiable for social license and policy support in water-stressed, climate-conscious jurisdictions. The national energy security imperative (China imports ~70%+ of its crude) justifies sovereign financing and fast-track approvals. India’s Talcher and similar projects can replicate Ningxia’s integrated model (gasification + urea/methanol + future ICL liquids + CCUS).

South Africa

Sasol Secunda is the longest-operating commercial CTL. Details are as follows:

• Capacity: ~160,000 bpd primary (gasoline, light olefins) + chemicals; multiple trains since 1977/1983.
• Technology: ICL with HTFT (high-temperature Fischer-Tropsch); iron catalysts.
• Resilience: Operated through sanctions, oil shocks, and post-apartheid transition; demonstrates 40+ year asset life with continuous optimisation.
• Lessons: Co-production of chemicals/fertilisers improves economics and strategic value; catalyst and reactor R&D critical for local coal adaptation; long-term offtake agreements (synthetic fuels into transport) anchor viability.

United States and Australia: Demonstration and Niche Deployment

• US: Multiple DOE-funded pilots (H-Coal, SRC, Exxon Donor Solvent, etc.) in the 1970s–80s; recent interest in CBTL (coal-biomass-to-liquids) and CCUS integration (e.g., FutureGen, Illinois Clean Fuels). No commercial-scale CTL due to abundant domestic shale oil/gas and environmental opposition.
• Australia: Arckaringa and other proposals are being considered. These proposals focus on export-oriented projects or on mining-related projects in specific areas. There are regulations in place for water and biodiversity. Here, export-oriented projects are being prioritised, mining projects in specific areas are being considered, and stringent regulations are in place to protect water. Biodiversity is also being protected with regulations.
• Lesson: In liberalized markets with cheap alternatives, CTL requires strong policy push (energy security premiums, carbon pricing exemptions, or defence mandates). India’s context (high import dependence, coal abundance, developmental-state capacity) is more analogous to China/South Africa’s than to the US/Australia.

International Comparative Matrix: Clean Coal Technology Adoption (2025)

India lags in scaling commercial CTL/CCUS but has policy momentum (National Coal Gasification Mission targeting 100 Mt of gasification by 2030; ₹8,500 crore in incentives; Atmanirbhar Coal Mission; coal block auctions) and a technical foundation (BHEL gasifier development, CIMFR/CSIR catalyst R&D, Talcher Fertiliser project) to accelerate rapidly if governance and financing align.

Key International Takeaway: Successful large-scale CTL requires (a) sovereign or quasi-sovereign financing for first-of-a-kind plants, (b) integration with chemical/fertiliser co-production for revenue diversification, (c) mandatory CCUS/ZLD from design stage, and (d) alignment with national energy security and industrial policy—not pure market signals.

Risks, Realism, and the Path Forward

This is not a silver bullet. Large-scale coal gasification + ammonia complexes entail high upfront capital costs, high water intensity (mitigated by ZLD and mine-water use), and require rigorous CCUS to be compatible with Net Zero 2070. The coal policy should be explicit: no project receives sovereign support without carbon capture readiness, ZLD, >95% slag valorisation, and just-transition commitments. It treats coal conversion as a transitional bridge (2026–2045/50), not a permanent lock-in, with periodic reviews and sunset provisions for non-performing assets.

Yet the alternative — indefinite absorption of every global spike while domestic production remains gas-dependent and import-exposed — is the higher-risk path. The 2026 crisis has shown the limits of that approach. Coal gasification, executed intelligently at mine-mouth scale with CCUS, offers a credible route to gradually broaden the domestic production base, dampen the transmission of price volatility, create jobs where they are most needed, and reduce the long-term fiscal load-bearing wall of the ₹242 bag.

Synthesising the Ten Strategic Issues into Actionable Policy Challenges

The ten issues interact across five structural domains. Policy must address them holistically rather than in silos.

1. Resource Quality and Conversion Constraint. High-ash coal, with 25 to 45 per cent ash content, does not burn well. It contains many impurities, such as sulphur, mercury, and arsenic, which make combustion inefficient. A key point to consider is that coal should be classified and allocated based on its value. The best coals, such as Steel Grade I and II and Washery I to IV coals, which are suitable for making coke, should be reserved for steelmaking. Coals such as G1 to G6, which have been washed and are suitable for electricity generation, should be used in high-efficiency power plants. Other coals, such as G7 to G17 and those with ash content, should be used to make gas or for other special processes, such as Integrated Gasification Combined Cycle (IGCC), Circulating Fluidized Bed Technology (CFBC), and Coal to Chemical (CTC), and for power generation right at the mine, with advanced systems to control emissions. Beneficiation (washing) mandates apply to all coal above G8 or allocated to distant power plants. This hierarchy is already implicit in grading systems but requires statutory enforcement and allocation linkage.

2. Geography, Poverty, Governance Deficit, and Regional Development. The coal areas in Jharkhand, Odisha, Chhattisgarh, and parts of West Bengal and Madhya Pradesh face many problems. These coal districts experience multiple forms of poverty; the systems in place are weak, and there has been significant conflict in the past. When coal is extracted and shipped away, conditions worsen. This is what people call the “resource curse”. It means that the people in these coal districts do not receive the money they should from the coal. Instead, the money goes elsewhere. The coal districts do not get to use the coal to make things and create jobs for the people. Mine-mouth clusters (pithead power + gasification + ICL/CTC + slag valorization + shared utilities) convert extraction sites into industrial growth poles, formalising employment, improving HDI, and reducing incentives for insurgency through economic inclusion. Just-transition funds and community equity stakes (5–10% of project SPV) should be mandatory for new clusters.

3. Transport, Supply-Chain Inefficiency, and Leakage. We should generate power and heat at the coal-extraction site and use them for industry, sending any surplus power to other locations via the grid. Coal should be converted into products that can be transported through pipes, such as gas, methanol, ammonia, synthetic crude and DME, at the mine site. A group like the Coal Logistics Rationalisation Board could be established to regulate prices, so that it costs more to send coal more than 500 kilometres unless it has been upgraded and can be tracked. We should use tags and a special kind of computer system called blockchain to track the coal from the mine to where it is used, and have special paths for trains that can carry containers and tankers rather than just open cars.

4. Import Vulnerability and Strategic Exposure. 85–89% dependence on oil imports is very risky, as crises such as supply disruptions, price spikes and currency depreciation can occur. For India, dependence on oil imports will continue to be a challenge. CTL/CTC can deliver 10–15% substitution by 2035 under an aggressive but feasible rollout (3–5 large clusters + supporting gasification). This is partial but strategically significant—equivalent to 35–50 Mt crude/year, reducing current account pressure and building sovereign synthetic fuel reserves (defence, aviation, strategic petroleum reserves integration). Producing fertilisers such as ammonia and urea, along with petrochemical feedstocks such as methanol and naphtha, helps reduce the need to import them. This is beneficial for agriculture and for making plastics. By producing these things ourselves, we are less dependent on other countries for fertilisers such as ammonia and urea and for petrochemical feedstocks such as methanol and naphtha.

5. Climate Pressure, Policy Fragmentation, and the Sustainability Test. The government has a problem with fragmentation. This means that no single ministry is in charge of the project from start to finish. This causes delays in projects that need to be done. That is why we need a National Mission for the following:

• The ability to use carbon capture and storage, which is also called CCUS readiness.
• The ability to use biomass as a fuel, also called biomass-feeding pathways.
• Regular project reviews every five years.
• Future plans for hydrogen and renewable energy beyond 2040 and 2050.
• Have stringent rules to ensure pollution control, responsible water use, land restoration after the project is over, and support for the community around the project.

Conclusion

The 2026 fertiliser crisis is a symptom of a deeper design flaw: a system that treats fertiliser security as a pure consumption subsidy rather than a production and conversion challenge. The sustainable coal policy framework reframes the problem. By prioritising high-ash domestic coal for gasification and for the co-production of ammonia and urea in integrated mine-mouth clusters, India can simultaneously address energy security, petroleum import substitution, regional development, and — over time — the fiscal sustainability of the fertiliser promise itself.

India’s coal debate is not about mining tonnage or power megawatts alone. It is about national resilience, industrial geography, strategic imports, environmental stewardship, state capability, and social justice. The ten-point analysis in the prompt paper, validated and expanded by the attached technical resources and international benchmarks, shows that India has both the resource scale (389.42 Bt) and the technological pathways (ICL + CCUS + co-production) to convert a portion of this endowment into synthetic fuels, chemicals, and energy-security assets—but only if policy shifts decisively from maximising raw-coal volume to sustainable value-chain transformation.

We have the opportunity to act now and make a difference. The evidence is clear. The policy architecture is ready. What remains is decisive implementation at the ministry level.

Authors Brief Bio:

Dr Saptarshi Basu is a Policy Research & Maritime Engineering Specialist.

Dr Bhaskar Bhandarkar is the former Chairman of the MRDB Institution of India and the Vice President of the Institute of Marine Engineers India.

Shri Manish Sahu is the COO of Kreeti Technologies Pvt. Ltd. He is an expert in Alternative Fuels & Circular Economy.

Shri Gopal Singh is the former Chairman-cum-Managing Director (CMD) of Coal India Limited (CIL).