All of us in India are aware that we are living in complex and rapidly changing times. The World of Globalisation, multi-national defence power pacts, Rule of Law covering Trade and national sovereignty issues – is now being crumpled and tossed into the waste bin. Power is the new Work dynamic.
At this time, India is at an amazing crossroads point in its existence as a sovereign nation. 15-20 years back, this issue of our opinion would not have mattered, so far as India is concerned. The World would have moved on with pitiful but uncaring glances towards us. Today, neither the World nor India has the luxury of ignoring the 5th largest economy in the World by GDP, a growing market for goods and services, a young population with education and capabilities, an infrastructure boom within and an annual rate of growth between 6.5-8.0% and expected to sustain within this range at least for the next 15-20 years.
Clearly, the importance of India as a growing market power is attracting attention and also concern. Both the USA-led axis of nations and the China-Russia-led axis (both unofficial and both in a state of flux and development) would like to have India firmly by their side. India is well aware of this, and it is aware that aligning with one over the other has a major disadvantage. Sitting in the lap of either is unhelpful.
Correspondingly, we need to keep good relations with both.
India has attempted to negotiate these tough economic times by maintaining trade contact lifelines with nations like Russia, the EU bloc, the UK, Australia, etc (Free Trade and Technology sharing agreements). The USA FTA is taking longer and irritating the USA Leadership. However, these may not be enough to protect us from a possible energy choke or force us into reliance on crude oil from a restricted market of countries supplying Oil.
Our Key import categories (highest downwards) for years 2024-26 are estimated to be (Imports in 2024 estimated to be USD 698 billion):
- Mineral Fuels and Oils (crude & products – the largest import category at 27% of import value and approximately 85% of our energy needs);
- Gold & Precious stones/pearls – driven by high demand for jewellery as a personal investment. In my personal view, since this is not consumed but stays with individuals, this is a buffer asset of the country, not valued in National assets ownership, but a very significant plus to National Wealth.
- Electronics and Machinery;
- Organic Chemicals and Plastics;
- Coal & Coke.
The first and last bullets above are for energy security and show our vulnerability. Against that, we have tremendously competent Human Resources and supporting structures like IITs / IIMs / Engineering colleges / medical colleges / Professional Accounts Institutes, etc. These Institutes are bringing quality manpower into the Indian economy. Sadly, for too long have the best from our IITs / Medical & Engineering colleges enriched Western nations like the USA, Canada, the UK, Australia and even Europe. We need to make concrete plans for retaining these quality professionals. No better time than now, when suddenly nations are souring on immigrants and are equating diamonds and rocks on the same parameters.
We need to have timelines fixed for reducing our very high dependence on imported oil through the process of alternative energy resources and much better usage of the resources that we import (thereby reducing the quantity imported). Just as we had the Food Revolution (which released us from food imports) and permitted food self-sufficiency and White Revolution (for dairy milk products), we need to build an Energy Revolution.
We are aware that the USA is eyeing the Indian agriculture market for its dairy, corn and pulses output. We need to work simultaneously on 2 tracks:
- Subsidise healthy agriculture processed products for the poor section of society through identifiers like income levels, education, point of residence, etc. A healthy population is a productive population which yields better output. In fact, the Food Revolution ensured the availability of grains. Version 2 of the Food Revolution has to get into the processing of vegetables, fruits, grains, and pulses so that there is much less wastage of basic materials, and we can open our markets to agricultural imports. That would ease some pressure on India. We also need to open our agricultural output to exports. Permission for exports cannot be quantitative, and an On/Off switch. Domestic prices will rise and fall. We need to take it in our stride. Agriculture cannot be fully protected but must bloom as an economic activity.
- However, our Energy sector really needs fresh thinking from our end. We have IITs and Chemicals & Mechanical Engineering Colleges. Why cannot we look at alternatives to reduce our crude oil imports?
For example, blending petrol with Ethanol. We are informed that 20% blending has been achieved. Why not try 50%? Yes, there may be issues with pollution, car engine deterioration, etc. However, we have the brains to make solutions happen. Similar is longer-lasting and better asphalt output. Energy consumption and pollution go together. Why not address this major problem? Economic growth cannot come with a threat to life and well-being.
We need to establish a working relationship between Industry (manufacturing corporates), Academia (IITs / Engineering colleges) and Government (Centre and States), so that we sincerely look at reducing our crude oil imports through focus on alternative energy sourcing and much more efficient & less polluting energy output. India is blessed with solar and hydro power. How effectively have we used these resources? Currently, our biggest failing is the absence of cohesion of understanding and achievement of desired intents between Industry and Academia. This needs to be set right – Academia and Industry must work together and not in separate silos.
Yes, this will be a tough climb and a long haul. However, all key stakeholders (Govt / Industry / Academia and lastly consumer) of the proposed Energy Revolution have to define commitment parameters and timelines for completion. There must be significant benefits for early target achievement and penalties for falling behind.
The increasing energy need as we grow (because of demography & policies) cannot be allowed to be our Achilles heel due to imports. Unless we have Energy sufficiency under our control and are not dependent on other nations’ crude oil and coal exports, we will not be a self-reliant (Atmanirbhar) nation and will always be subject to pressures.
Disclaimer
Views expressed above are the author’s own.
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