India's Energy Import Strategy: Geopolitical Risks and Investment Opportunities in the Indo-Pacific

India's energy landscape in 2025 is a tapestry of contradictions: a nation grappling with a 88.2% import dependency for crude oil and 50.8% for natural gas India’s Energy Import Dependence Hits Record High^[1], yet simultaneously emerging as a global leader in renewable energy and green hydrogen innovation. As the Indo-Pacific becomes a battleground for energy security and geopolitical influence, India's strategies to diversify its energy imports, forge strategic partnerships, and pivot toward clean energy present both risks and opportunities for investors.

The Fragile Foundations of Fossil Fuel Imports

India's reliance on imported fossil fuels remains a critical vulnerability. In FY 2023–24, crude oil accounted for 29.83% of the country's total primary energy supply (TPES), with imports averaging 4.7–5 million barrels per day (MBPD) India’s Crude Oil Imports by Country: Top Suppliers^[2]. The top suppliers—Iraq (20–23%), Saudi Arabia (16–18%), Russia (18–20%), UAE (8–10%), and the U.S. (6–7%)—highlight a diversification effort, yet over 85% of India's oil demand is still met through imports India’s Strategy to Diversify Energy Imports: Ensuring Energy^[3]. This dependency is compounded by geopolitical risks: the Strait of Hormuz and Malacca Strait, critical chokepoints for India's energy shipments, remain exposed to regional tensions, as seen during the June 2025 Israel–Iran standoff India’s Energy Security Strategy 2025: Green Growth^[4].

Russia's emergence as a key supplier (35–40% of crude imports in 2024–25) reflects both economic pragmatism and strategic hedging. Discounted oil from Moscow has offset some costs, but overconcentration in a single supplier—especially one entangled in global sanctions and geopolitical volatility—poses long-term risks Geopolitical Complications and Power Investment: India’s Strategic Challenges and Opportunities^[5].

Renewables and Green Hydrogen: A Path to Energy Independence

India's CLEAN-India pathway aims to counter fossil fuel dependence through renewables and green hydrogen. By 2024, 83% of power sector investments were allocated to clean energy, with solar PV dominating India – World Energy Investment 2025 – Analysis^[6]. The government's 500 GW renewable target by 2030 and $2.4 billion in subsidies for green hydrogen projects underscore this ambition Energy sector trends & outlook for the future | EY - India^[7]. However, challenges persist: unpaid dues of $9 billion by distribution companies and inadequate transmission infrastructure are stifling project viability India’s path towards energy independence and a clean future^[8].

Green hydrogen, in particular, is a geopolitical game-changer. India's partnerships with the Middle East—such as the India-Middle East-Europe Economic Corridor (IMEC)—aim to establish hydrogen export hubs, reducing reliance on traditional suppliers Strengthening India’s Indo-Pacific Strategy^[9]. By 2030, India aims to produce 5 million metric tons of renewable hydrogen annually, a sector projected to attract $100 billion in investments India-Japan $68B Deal Boosts Clean Energy, Tech, and Indo^[10].

Indo-Pacific Partnerships: Balancing Geopolitics and Energy Security

India's Indo-Pacific strategy is a dual-edged sword. On one hand, the U.S.-India partnership is deepening, with the Biden administration lifting nuclear restrictions and collaborating on LNG, nuclear reactors, and renewables US-India Partnership: Advancing critical technologies, energy, and regional security^[11]. The Quad's focus on critical mineral supply chains and clean energy infrastructure further aligns with India's decarbonization goals India’s Indo-Pacific Approach in 2024 and Vision for 2025^[12].

On the other, India's cautious détente with China—despite border clashes—highlights the delicate balancing act. While Chinese solar panels still dominate India's market, the Production Linked Incentives (PLI) scheme is boosting domestic manufacturing, reducing exposure to geopolitical supply shocks Strategic investment risks threatening India's renewable energy^[13]. Japan's $68 billion clean energy and infrastructure partnership, including bullet trains and semiconductor projects, adds another layer of strategic depth Japan in India’s Northeast: Infrastructure, Innovation, Impact^[14].

Investment Risks and Opportunities

For investors, India's energy transition is a high-stakes proposition. Opportunities abound in solar PV manufacturing, green hydrogen infrastructure, and offshore wind projects in the Indo-Pacific. The country's low cost of capital for renewables (though higher than advanced economies) and its sovereign green bond market offer attractive avenues India’s Energy Landscape 2023–24: Growth, Imports, And The^[15].

Yet risks loom large. Offtaker risk—exemplified by DisComs' $9 billion arrears—could deter private investment in renewables Securing India's Energy Future: Challenges and^[16]. Geopolitical volatility, from China's naval expansion in the Indian Ocean to Middle East conflicts, threatens energy corridors and LNG supplies . Additionally, India's slow progress on domestic coal gasification and nuclear energy (despite thorium-based reactor advancements) may delay fossil fuel substitution .

Conclusion: Navigating the Energy Crossroads

India's energy import strategy is a microcosm of the Indo-Pacific's broader geopolitical dynamics. While diversification efforts and clean energy investments are reshaping its energy matrix, the interplay of fossil fuel dependency, geopolitical tensions, and regulatory hurdles will define its trajectory. For investors, the key lies in hedging against volatility while capitalizing on India's long-term vision: energy independence by 2047 and net-zero by 2070.

As the world watches, India's success—or failure—in balancing these forces will not only determine its own energy future but also shape the Indo-Pacific's evolving power dynamics.