India cuts energy import dependence to 42%, oil imports still meet 90% of demand: CII-EY

India's dependence on imported primary energy has declined to around 42% in FY25 from 47% in FY17, driven largely by lower coal imports due to higher domestic production. However, crude oil imports continue to meet nearly 90% of domestic demand, underlining the country's continued reliance on imported oil, 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," was released at the 7th International Energy Conference and Exhibition in New Delhi on Thursday.

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"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.

It noted that while crude oil imports account for around 90% of India's domestic demand, dependence on imported natural gas has increased to about 50% as consumption has outpaced domestic production. In contrast, coal import dependence has fallen to around 18%, aided by higher domestic output.

The report said India's energy transition is steadily reshaping the country's energy landscape, with electricity accounting for a growing share of final energy consumption and renewable energy capacity expanding rapidly. However, it stressed that strengthening energy security will require not only adding clean energy capacity but also reducing structural import dependence across the energy value chain.

Despite efforts to diversify crude oil sourcing following the Russia-Ukraine conflict, the Middle East remains India's largest source of crude imports, accounting for around 47-49% of shipments in FY25, compared with 61-65% between FY18 and FY22. Meanwhile, Eurasia's share rose sharply from 2.8% in FY22 to 35.7% in FY25.

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The report also highlighted that the Middle East supplied 62.9% of India's liquefied natural gas (LNG) 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 will be critical 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, adding that achieving the Viksit Bharat 2047 vision will require balancing clean energy expansion with higher domestic production, diversified supply chains and a more resilient energy ecosystem.