The Energy Challenge of India

India consumes much more energy than it produces. It has important coal reserves equal to 175 years of production at the current pace of consumption. In absolute value, Indian coal reserves are twice lower than Chinese reserves. In the short term, India will sustain its development with its coal reserves. However, as production increases to meet consumption, it should only have 50 years of production left by 2035. The country would then face a new energy challenge.

Besides coal, India does not have reserves of oil or natural gas. This will limit its development. The country is essentially dependent on oil, with around 80% of its oil consumption imported, mostly from the Middle East. This is one of the highest

Primary energy consumption in India (© OECD/IEA, WEO 2012)

Fig. 4.9 Primary energy consumption in India (© OECD/IEA, WEO 2012)

Energy imports from India (BP 2009, 2014; © OECD/IEA, WEO 2012)

Fig. 4.10 Energy imports from India (BP 2009, 2014; © OECD/IEA, WEO 2012)

dependency ratios of the world. India thus highly depends on its neighbors and on the rest of the world to keep up with growth. Its long-term growth will only be sustained if it maintains long-term stable partnerships with a number of regional powers, in particular the Middle East. As India will likely take a higher share of the oil exports from the region in the coming years, its political and economic ties are expected to progressively become stronger (Fig. 4.10).

 
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