New Delhi [India], August 6 (ANI): India's overall dependence on imported primary energy has eased modestly to around 42 per cent in FY25 from 47 per cent in FY17, but crude oil imports continue to meet nearly 90 per cent of the country's domestic demand, highlighting the country's continued reliance on imported oil despite progress in diversifying its energy mix, according to a joint report by the Confederation of Indian Industry (CII) and EY.

The report, 'India's Energy Security in a Volatile World: Independence, Efficiency and Resilience,' launched at the 7th International Energy Conference and Exhibition in New Delhi on Thursday, said the improvement in overall import dependence has been driven largely by lower coal import reliance supported by higher domestic production, even as crude oil remains India's biggest energy import.

'Consequently, overall primary energy import dependence has reduced modestly from 47% to around 42% between FY17 and FY25, indicating gradual diversification of the energy system despite persistent dependence on imported oil,' the report said.

According to the report, crude oil imports currently meet around 90 per cent of India's domestic demand, while natural gas import dependence has increased to around 50 per cent as consumption has outpaced domestic production. In contrast, coal import dependence has declined to around 18 per cent due to higher domestic output.

The report noted that India's energy transition is steadily reshaping the country's energy landscape, with electricity playing a larger role in final energy consumption and renewable energy capacity expanding rapidly. However, it said strengthening energy security would depend not only on adding clean energy capacity but also on reducing structural import dependence across the energy value chain.

It also highlighted that the Middle East continues to remain central to India's energy security despite greater diversification of crude oil sourcing following the Russia-Ukraine conflict.

Historically, the Middle East supplied 61-65 per cent of India's crude oil imports between FY18 and FY22. While Eurasia's share rose sharply from 2.8 per cent in FY22 to 35.7 per cent in FY25, the Middle East still accounted for around 47-49 per cent of India's crude oil imports in FY25, remaining the country's largest source of supply.

For liquefied natural gas (LNG), the report said the Middle East supplied 62.9 per cent of India's imports in FY26, indicating that regional concentration remains significant despite gradual diversification. It added that alongside expanding renewable energy and electrification, continued progress in energy efficiency, domestic energy production and broader fuel diversification would be key to strengthening India's long-term energy security.

The report said India's energy transition is changing the nature of energy security rather than eliminating import dependence. As the country moves towards its Viksit Bharat 2047 vision, long-term resilience will depend on balancing clean energy expansion with domestic production, diversified supply chains and a more resilient energy ecosystem. (ANI)