India stands at a defining crossroads in its energy journey — where the race for growth meets the responsibility of sustainability. Sanjay Desai, Independent Board Advisor / Mentor, traces this pivotal transformation — where hydrocarbons sustain the present, ethanol bridges the transition, and electric mobility powered by renewables builds the future. This is not just a shift in fuels but a redesign of India’s energy backbone, integrating agriculture, manufacturing, and logistics into a single, resilient ecosystem. The change ahead is strategic and systemic. It’s about replacing volatility with agility, carbon with circularity, and imports with innovation. As we move ahead, India’s real energy power will come not from what it burns, but from what it builds — intelligent, adaptive, and future-ready supply chains that redefine sustainability and self-reliance.
Sanjay Desai
India stands at a critical inflection point in its energy journey. As the world’s third-largest consumer of energy, the nation’s appetite continues to surge — but so does its exposure to global uncertainty. In FY 2023–24, more than 85% of India’s crude oil was imported, leaving its economy vulnerable to price swings, geopolitical tensions, and logistical disruptions across international supply routes. The crude import bill, at nearly $130 billion, is a stark reminder of the need to fortify domestic resilience within the country’s energy ecosystem.
As India’s economy accelerates, the twin challenge intensifies: meeting the growing fuel demand while cutting dependence on imports and carbon-heavy sources. Achieving this delicate balance is not just about securing energy; it demands a redesign of the entire fuel supply chain — from exploration and refining to storage, transportation, and last-mile distribution.
Recognizing this, the Government of India has adopted a multi-pronged strategy to rewire the nation’s energy backbone. The approach integrates hydrocarbons with renewables, strengthens infrastructure, and embeds sustainability as a supply chain principle rather than an afterthought. The objectives are clear:
Enhance energy security through diversification and digitalization,
Reduce the crude import bill by boosting domestic production and alternative fuels, and
Align the energy value chain with India’s 2030 Sustainable Development Goals and 2070 net-zero vision.
But what does this strategy look like in practice?
Over the next five years, India’s fuel supply chains will evolve along three transformational pathways — each demanding deep collaboration across public and private networks. Together, these pathways will determine how effectively India can balance Affordability, Sustainability, and Reliability — the Three Pillars of its Energy Future.
HYDROCARBON FUELS: THE CURRENT SUPPLY CHAIN BACKBONE
Crude oil, natural gas, and coal continue to anchor India’s energy mix — powering industries, vehicles, and households alike.
Supply: India imports the majority of its crude oil, refining it domestically into petrol, diesel, and jet fuel. Natural gas is both locally produced and imported through LNG terminals to meet industrial and residential demand.
Supply Chain Ecosystem Impact: Hydrocarbons offer reliability and scale, but the ecosystem that supports them — spanning port logistics, pipelines, refineries, storage facilities, and last mile distribution — remains deeply carbon-intensive. This dependency not only contributes to urban air pollution and greenhouse gas emissions but also heightens long-term climate risks.
Value Creation: While hydrocarbons cannot be phased out overnight, India is investing strategically to make them cleaner and more efficient. Upgrading refinery technologies, expanding the national gas grid, and building strategic petroleum reserves are helping to reinforce supply resilience while buying time to scale greener alternatives.
ETHANOL-BLENDED FUEL: THE IMMEDIATE TRANSITION PATH
As India moves toward a low-carbon future, ethanol has emerged as the most practical bridge fuel — one that connects the agricultural and energy economies.
Supply: Produced from sugarcane, corn, and agricultural residues, ethanol is blended with petrol to reduce hydrocarbon dependence. India achieved 17–18% ethanol blending in 2025, a milestone that can potentially save $3.5–3.75 billion in crude imports by FY 2025–26 if sustained.
Supply Chain Ecosystem Impact: Ethanol’s integration creates a symbiotic network linking farmers, distilleries, refineries, and fuel distributors. Surplus crops and biomass feed refineries that produce ethanol, while fuel companies expand infrastructure for blending and storage. The result: cleaner combustion, lower emissions, and new income streams for rural communities.
Value Creation: Every 1% increase in ethanol blending saves nearly $1 billion in crude imports. Achieving the 20% blending target could translate into multi-billion-dollar savings annually, while strengthening India’s ESG and SDG alignment. Ethanol thus acts as both an energy transition tool and a socioeconomic enabler — reducing import vulnerability while empowering the rural economy.
ELECTRIC VEHICLES & RENEWABLES: THE LONG DURATION TRANSITION
Electric mobility and renewable energy represent India’s most ambitious supply chain transformation — one that redefines the future of energy and transport together.
Supply: EVs run on electricity ideally generated from solar and wind sources, directly cutting greenhouse gas emissions. India is rapidly expanding its domestic capacity for lithium-ion battery manufacturing, EV charging infrastructure, and grid modernization. Flagship initiatives like FAME II and Production Linked Incentives (PLI) are driving this industrial build-out.
Supply Chain Ecosystem Impact: Transitioning to EVs and renewables requires a complete redesign of logistics and resource networks — from securing critical minerals and building battery recycling systems to managing grid stability and renewable energy integration. Together, these efforts reduce oil dependency and urban pollution, while creating new industrial clusters for clean mobility and power.
Value Creation: Although EV adoption currently accounts for less than 2% of total vehicles, India’s 2030 targets aim for 25–30% of new vehicle sales to be electric, led by two-wheelers and commercial fleets. This push is catalysing a new generation of supply chains that are sustainable, resilient, and innovation driven, marking the shift from fuel dependence to energy independence.
ALTERNATIVE AND EMERGING FUELS: EXPANDING THE ENERGY HORIZON
Beyond the three foundational pillars, India is also developing parallel supply chains for green hydrogen, compressed biogas (CBG), and second-generation biofuels — each representing a strategic step toward long-term decarbonization. Green hydrogen, in particular, holds immense promise as a zero-emission industrial and transport fuel. It can replace fossil fuels in sectors such as steel, fertilizers, and heavy mobility, where electrification is challenging.
However, high production costs and infrastructure gaps currently constrain its scalability. Building a reliable supply chain for hydrogen — from electrolyzer manufacturing and renewable power sourcing to storage and transport — will be critical to realizing its potential.
Meanwhile, compressed biogas and advanced biofuels are emerging as pragmatic alternatives that connect agriculture, waste management, and industry. Produced from organic waste, crop residues, and municipal biomass, CBG strengthens the rural economy while improving waste utilization. These fuels expand the resilience of India’s energy portfolio, reduce methane emissions, and create a diversified ecosystem that enhances both energy security and circular economy outcomes.
Together, these emerging fuels complement India’s ethanol and EV strategies, ensuring that the country’s fuel supply chains evolve with multiple low-carbon options rather than a single dependence pathway. They also enhance India’s strategic positioning in the global energy transition, offering scalable models that other developing economies can emulate.
THE ESG AND SDG LENS: ALIGNING GROWTH WITH RESPONSIBILITY
From an ESG perspective, India’s evolving fuel landscape is as much about inclusive growth as it is about carbon reduction. Ethanol and EV adoption are already reshaping the country’s environmental footprint — directly reducing greenhouse gas emissions while building new linkages between farmers, industries, and consumers.
These policy measures — including the National Biofuel Policy, the FAME II scheme, and renewable energy incentives — are firmly aligned with global sustainability goals:
SDG 7: Affordable and Clean Energy
SDG 9: Industry, Innovation, and Infrastructure
SDG 13: Climate Action
This alignment ensures that India’s energy supply chain ecosystem is not just greener, but also globally competitive and investment-ready. The integration of ESG principles into policy design and industrial practice is transforming how value is created and measured — shifting rom volume-driven growth to impact driven transformation.
The transition is not only environmental — it’s profoundly economic. Reducing fossil fuel imports can free up tens of billions of dollars annually, strengthening India’s trade balance and the rupee’s stability. At the same time, cleaner fuels and efficient logistics systems reduce public health costs linked to air pollution, enhance workforce productivity, and improve the overall quality of urban life.
FUELLING THE FUTURE: BUILDING INDIA’S RESILIENT ENERGY SUPPLY CHAINS
India’s fuel transition is entering a decisive decade — one that will redefine not only how the nation powers itself, but how it builds resilience, competitiveness, and sustainability into its economic fabric. Hydrocarbons will remain the backbone of supply for some time, yet the real transformation lies in how India redesigns its energy supply chains to integrate ethanol at scale, accelerate EV adoption, and embed renewables across the grid. This shift is not merely about energy choices; it is about re-engineering the entire value network that sustains growth.
If executed with discipline, this three pillar strategy — supported by emerging fuels such as green hydrogen, compressed biogas, and advanced biofuels — can fundamentally reshape India’s energy ecosystem. It can reduce the crude import bill by tens of billions, curb urban pollution, and unlock new industries across agriculture, manufacturing, and logistics. The benefits will be economic, environmental, and social: a stronger trade balance, cleaner air, healthier citizens, and a future-ready supply chain network that underpins India’s industrial competitiveness.
However, the success of this transition will depend on how efficiently India manages its evolving fuel supply chains — using digital tracking, predictive analytics, circular systems, and decentralized production hubs. Efficiency, transparency, and carbon intelligence will become the new metrics of progress. Each link in the chain — from exploration and refining to storage, transport, and distribution — must now be optimized not just for cost, but for carbon, circularity, and climate resilience.
Public and private sectors alike are rising to the challenge. Oil marketing companies are investing in green refineries and EV charging networks; logistics firms are shifting to low emission fleets; and Indian startups are pioneering battery technology, hydrogen electrolyzers, and waste-to-fuel solutions.
These collective efforts mark the dawn of a new energy supply chain era — one defined by innovation and collaboration rather than dependence and disruption. As India advances toward its 2070 net-zero vision, the question is no longer whether the fuel supply chain can evolve, but how fast it can adapt. Because in the energy systems of tomorrow, the true measure of power will not be the fuels we burn — but the resilient, intelligent, and sustainable ecosystems we build.
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