Modi's Energy Diplomacy: Transforming India's Position in Global Hydrocarbon Markets

Abstract

India's emergence as the world's third-largest energy consumer and its status as a net importer of approximately 85 percent of its crude oil requirements place energy security at the very heart of its foreign policy imperatives. However, the present prime minister, Narendra Modi, has adopted a highly proactive and strategically oriented policy approach to energy diplomacy that is very different from that of earlier governments which had relied on a more relationship-based policy. It highlights the various facets of Modi's energy diplomacy in the global hydrocarbon markets, including the diversification of crude oil import sources, leveraging India's buying power in a changing energy market, acquisition of overseas hydrocarbon assets, energy diplomacy of discounted Russian crude oil imports since 2022, India's engagement with OPEC+ countries, development of strategic petroleum reserves and at the same time, energy diplomacy of renewable energy as a complement to hydrocarbon diplomacy. The paper presents evidence from official policy pronouncements, IEA data and scholarly literature to demonstrate how the Modi government has strategically shifted the Indian energy paradigm from a passive price taker to one that is far more assertive in shaping global energy geopolitics. Yet, structural weaknesses, such as smaller refining capacity for non-Middle Eastern grades, reliance on the USD for oil trading and the dichotomy between fossil fuel reliance and climate pledges, remain to throttle India's energy strategic autonomy.