India is the world’s fourth-largest energy consumer, falling behind only China, the United States and Russia.1 Its dependence on energy imports is likely to increase even further in the coming years as the government attempts to meet the energy needs of its growing population. India aspires to become a great power, and its status as a nuclear weapons state — along with its tense relationship with its nuclear neighbor, Pakistan — guarantees its place among countries the United States considers important to international security.
As of 2013, India was the fourth-largest energy consumer and fourth-largest net importer of crude oil and petroleum products in the world. Economic growth and modernization, coupled with a population second only to China, continue to increase the country’s dependence on energy imports. India imports 90% of its total petroleum consumption — a number that will grow as its transportation sector expands. For now and into the foreseeable future, though, coal will remain the key source of energy in India.
The U.S. Shale Revolution raised hopes that India could shrink the gap between energy demand and domestic supply by taking advantage of its own shale resources. (India is thought to have about 63 trillion cubic feet of recoverable shale gas reserves.) Indeed, the Indian Petroleum Ministry has set its sights on reducing the country’s energy imports to zero by 2030.2 However, there are a number of formidable above-ground barriers to the realization of this goal. India lacks the infrastructure, investment environment and domestic political setting needed to attract international oil companies and foreign investment. Highly regulated consumer fuel prices and extremely bureaucratic procedures governing foreign investment continue to hinder the private-sector development of India’s energy resources.3 Additionally, like many countries exploring their shale potential, India has seen pushback from environmentalists concerned about the hazards of fracking.
There are many reasons to think of India in the context of U.S. security interests, but few of them have to do with energy. India is a nuclear weapons state that has long-standing border disputes with neighboring China and Pakistan. Internally, India faces threats from insurgencies and domestic terrorism. However, none of these issues are much affected by India’s energy sector or trade.
China’s recent efforts to build up its blue-water navy have increased the friction in its relationship with India, which fears the possibility of a Chinese presence in the Indian Ocean. Since China is pursuing greater naval capabilities at least in part to protect vital sea-lanes — and by extension, the imports China needs to meet its growing consumption demands — it is possible that new oil and gas production technologies could improve Sino-Indian relations by enabling China to increase its domestic energy production and reduce its heavy reliance on energy imports. If that were to happen, it is possible that China would feel less of a need to expand its maritime presence into India’s backyard.
India is the world’s largest democracy, and people hope that it will someday become a great power that will positively contribute to regional security. But that is a charitable outlook. India continues to grapple with many domestic problems, and it is unlikely that recent innovations in energy production technologies will do much to change their energy posture.