India's Energy Procurement Diversification Amidst Trade Volatility

For India, energy isn’t just fuel for factories and transport. It’s the lifeblood of economic growth. Approximately 90 percent of the country’s crude oil and gas requirements are imported from abroad. Such strong reliance makes it vulnerable when global markets wobble — be it because of sanctions, tariffs, wars, or supply disruptions. India is today redefining how it buys energy to stay protected, stable, and affordable in a world of shifting trade winds.  

Recent headlines stirred debate when U.S. President Donald Trump claimed India has agreed to stop buying Russian oil as part of a new trade deal. India’s Foreign Secretary quickly shot that down, saying India will maintain multiple sources of energy supply and base import decisions on national interest and market conditions.  

The government sees diversification as essential, not optional. Commerce and Industry Minister Piyush Goyal told lawmakers that energy security for India’s 1.4 billion people is the “supreme priority” and that the nation will diversify energy sourcing in tune with global market realities.  

Why Diversification Matters Now 

India’s energy growth story is huge. It is the world’s third-largest oil importer and consumer with massive demand from industry, transport, and power. But that demand can’t be met by a single supplier without exposing the economy to risk.  

Trade volatility is real. Russian sanctions, U.S. tariff pressure, shifting OPEC production, and geopolitical flashpoints in chokepoints like the Red Sea are all price and availability influencing factors. Such incidents can shake prices overnight and damage consumers and businesses back home. 

Risk is dispersed through diversification. India currently imports oil and gas products in almost 40 countries, compared to significantly fewer only a few years ago, combining supplies from the Middle East, Africa, the Americas, and now growing volumes from the United States.  

Gyanesh Chaudhary, Chairman & Managing Director at Vikram Solar, said, “For Indian manufacturers and solution providers across solar, energy equipment, advanced materials, and power infrastructure, the deal creates a powerful runway to scale exports, deepen value addition, and integrate more meaningfully into global supply chains. It strengthens India’s position not just as an energy consumer, but as a reliable energy exporter and technology partner to the world’s largest economy.” 

Also Read: What's Driving LNG Adoption in India’s Commercial Transport

How India Is Redrawing Its Energy Map 

The diversification strategy has several layers: 

Broadening supplier base: 

Rather than relying on one region, India is buying crude from more places and balancing purchases. Recent data shows Russian oil’s share in India’s total crude basket pulling back from past peaks as imports from other regions rise.  

“Diversification of the renewable energy portfolio, including solar, wind, and green hydrogen, is essential to meet India’s rising energy demand.” — Subrahmanyam Pulipaka, CEO, NSEFI. 

Strategic commerce relationships: 

The interim trade deal with the U.S. has reignited discussion about energy cooperation. While India hasn’t formally stopped buying Russian oil, trade sources say imports are already declining and purchases from U.S. crude have surged, buoyed by discounts and strategic choice.  

Government autonomy: 

Goyal emphasized that India’s oil imports, including crude and LNG, are decided by buyers based on commercial merits — not dictated by trade agreements. This ensures India retains agency over its energy policy.  

R.P. Gupta, Chairman & Managing Director, Solar Energy Corporation of India (SECI) said, “India’s energy transition must be built on affordability and security. Competitive bidding and diversified sourcing help us achieve both.” 

Balancing Trade Pressures and Energy Needs 

Trade tensions add complexity. U.S. actions linking tariffs with Russian oil purchases sparked global headlines, with some calling it a punitive measure. Analysts argue these tensions reflect broader strategic competition, while India insists its decisions are rooted in protecting energy reliability and cost.  

India’s approach is to balance commercial pragmatism with diplomatic finesse. It continues to import Russian crude, but at the same time, also ramps up imports from the U.S. and other markets. This mix keeps prices stable for consumers and industry, and prevents over-reliance on any one stream. 

TotalEnergies CEO, Patrick Pouyanne, “We can succeed in a changing energy market because we offer both renewable power and oil and gas to help countries meet their economic goals.” 

Srivatsan Iyer — Global CEO, Hero Future Energies said, “Tariff stabilisation in round-the-clock (RTC) and firm and dispatchable renewable energy bids, growing corporate demand and new business models are shaping project strategies.” — Srivatsan Iyer, Global CEO, Hero Future Energies. 

Also Read: The Role of FTWZs in India's Export Growth Strategy

Looking Ahead: A More Resilient Energy Future 

The diversification initiative in India is concerned with stability and flexibility. In a world where trade volatility can disrupt supply overnight, having more sources — and more kinds of energy — shields the economy from shocks. 

The policy is multi-layered: maintain diverse oil sources, secure LNG and gas contracts, invest in renewables, and deepen strategic energy ties globally. That’s a far cry from yesterday’s one-track dependence. 

Amit Jain, CEO of ENGIE India, stresses that meeting India’s future energy needs requires growing both renewable infrastructure and the skilled talent to build and operate it — a key part of making diversified energy sustainable. 

What’s clear is this — India is not reacting randomly to global noise. It is crafting a long-term energy roadmap that steps beyond volatility, anchors energy security, and builds resilience into the heart of its economic engine. 

FAQs

1. Why is India trying to buy energy from more countries?

India buys most of its oil and a lot of its gas from other nations. If it depends too much on just one or two suppliers, it can face problems when prices rise or political tensions increase. By buying from many countries, India reduces risk. If supply from one place slows down, it can turn to another. This keeps fuel available and helps control sudden price spikes.

2. How do global trade tensions affect India’s energy supply?

When countries fight trade wars, impose sanctions, or face conflicts, oil and gas markets react fast. Prices can jump overnight. Shipping routes can get blocked. Since India imports most of its energy, these global issues can make fuel more expensive at home. That affects transport costs, factory output, and even food prices. Diversifying suppliers helps soften the blow.

3. Is renewable energy part of this plan?

Yes, very much. Diversification is not only about buying oil from different countries. It also means using more solar, wind, and other clean energy sources at home. India is investing heavily in renewables so it can depend less on imported fuel over time. Oil and gas are still important today, but renewables are a big part of the long-term solution.