While Others Impose Curfews, India Buys Time: Inside Modi Government’s Energy Strategy
The global energy shock triggered by the Middle East conflict and disruption around the Strait of Hormuz has pushed several countries into emergency mode. Governments across regions are scrambling to manage fuel shortages and soaring prices, with curfews, rationing, and restrictions becoming the new normal. Yet in India, daily life continues without visible disruption. Petrol pumps are functioning, supply chains are intact, and there is no immediate sense of crisis. This contrast raises an important question: is India managing the situation better, or simply postponing the inevitable?
Global Panic: Curfews, Lockdowns and Energy Rationing
Across the world, the response has been swift and severe. Egypt has imposed curfews to cut electricity consumption. Pakistan is considering smart lockdowns and reduced working hours to control fuel demand. Sri Lanka has introduced additional public holidays, while Bangladesh has moved toward fuel rationing and institutional shutdowns. These are not precautionary measures. They are signs of systems already under stress, where governments are forced to directly restrict economic activity to conserve energy.
India’s Different Approach: Absorb the Shock, Don’t Transfer It
India has chosen a very different path. Instead of passing the burden directly to consumers, the government has reduced excise duties on fuel, allowing oil marketing companies to absorb part of the global price increase. The intent is clear: keep retail fuel prices stable, avoid triggering inflation, and prevent panic among citizens. This approach ensures that economic activity continues uninterrupted, unlike countries where rising costs are immediately visible at the consumer level.
The 60-Day Cushion: Strategic Reserves and Supply Diversification
A key factor behind India’s relative stability is its buffer capacity. With approximately 60 days of crude oil supply available through strategic and commercial reserves, India has a built-in cushion against immediate disruptions. More importantly, the country has diversified its sourcing in recent years, increasing imports from Russia, the United States, and other suppliers. As a result, a significant portion of India’s crude imports is less exposed to the risks associated with the Strait of Hormuz, reducing vulnerability at a critical moment.
LPG and Ground-Level Management: Plugging the Gaps
At the consumer level, the government has also moved to secure LPG supplies, arranging around 800,000 metric tonnes of additional cargoes from alternative sources. While this only translates to a limited number of days of national consumption, it provides a crucial buffer when combined with domestic production and ongoing imports. At the same time, enforcement measures such as crackdowns on gas hoarding are ensuring that available supply is not artificially constrained or diverted.
Why India Has Avoided Restrictions So Far
India’s strategy rests on a combination of preparedness and control. Strategic reserves provide breathing room, diversified imports reduce exposure, fiscal measures soften the price shock, and administrative enforcement prevents misuse. Together, these elements allow the government to maintain normal economic activity without resorting to visible restrictions like curfews or lockdowns. In contrast to countries reacting to immediate shortages, India is operating with a degree of calculated stability.
The Hidden Cost: Who Is Actually Paying for This Stability?
However, this stability comes at a cost that is not immediately visible. Oil marketing companies are absorbing losses due to controlled retail prices, while the government is sacrificing tax revenue through excise duty cuts. This effectively shifts the burden from consumers to public finances and corporate balance sheets. While this may be politically and economically sensible in the short term, it raises questions about how long such a model can be sustained.
The Time Window: How Long Can This Strategy Hold?
Based on current estimates, India appears to have a comfortable window of around two to three months where the system can function without major disruptions. If the crisis persists but does not worsen significantly, this period could stretch further, though with increasing financial strain. Beyond that, difficult decisions may become unavoidable, whether in the form of fuel price adjustments, additional subsidies, or demand-side restrictions.
Is This Strategy Sustainable or Just Delaying the Inevitable?
The central question is whether India’s approach represents genuine resilience or merely a postponement of the crisis. Countries that have already imposed restrictions may have acted early to manage prolonged stress, while India is betting on the situation stabilizing before its buffers are exhausted. If the conflict de-escalates, this strategy will appear both efficient and forward-looking. If it drags on, the same pressures now visible elsewhere could eventually surface in India as well.
Conclusion
India has not escaped the global energy crisis, but it has clearly managed its initial impact better than many others. By absorbing the shock rather than transferring it to consumers, the government has bought valuable time. The real test, however, lies ahead. Whether this time is used to strengthen long-term resilience or simply delays a harder reckoning will determine how this strategy is ultimately judged.
