by admin_xw3245oj | Apr 16, 2026 | In the news
With the West Asia crisis and oil prices spiking, India needs to look much more at alternative fuels, including electric mobility. The government has accelerated procurement of electric buses, citing explicitly the risk of supply disruptions from the ongoing conflict. This is not a future risk.
India has been here before. In 2008, in 2013, and in 2022, Brent crude crossed $100 to $147 per barrel, triggering inflation, rupee depreciation, and widening fiscal and current account deficits. Each time, the response included excise adjustments, monetary tightening, and fiscal consolidation. These measures absorbed each shock without removing the underlying vulnerability. The pattern is well established. What is different today is that the conditions in technology, economics, and policy momentum now exist for India to make a structural choice and move decisively towards energy security.
India imports more than 85% of its crude oil, with a significant share sourced from or transiting through West Asia. India spent $137 billion importing crude oil in FY2024-25, according to data published by the Petroleum Planning and Analysis Cell, ministry of petroleum and natural gas. That figure, equivalent to approximately ₹11.5 lakh crore, represents the annual cost of an energy dependence.
A barrel of crude priced at $80 cost India approximately ₹6,720 when the rupee stood at ₹84 to the dollar. At today’s rate of ₹94, the same barrel costs ₹7,520 — an increase of approximately 12% from currency movement alone, before any change in the global oil price. India imports approximately 4.8 million barrels per day, or 1.75 billion barrels over a full year. At ₹800 more per barrel, currency depreciation is already adding approximately ₹1.40 lakh crore to India’s annual oil import bill.
The transport sector consumes approximately 70% of India’s petroleum products. Within that, two-wheelers account for an estimated 30–35% of India’s total petrol demand — the single largest driver of fuel consumption in the country. According to the ministry of road transport and highways Annual Report 2023-24, there are approximately 260 million registered two-wheelers on India’s roads, growing by roughly 20 million units every year. Each one is a 10–15 year oil import commitment.
The scale becomes clear when you look at individual vehicles. On average, a petrol two-wheeler consumes roughly 2,500 litres over its operational life — approximately ₹2.5 lakh in fuel costs alone at today’s prices, often two to three times the original purchase price of the vehicle. Every litre burned is a dollar of imported crude. Petrol has not got cheaper over any sustained period in India’s history, and the structural forces of rupee depreciation, global demand growth, and supply volatility consistently point in one direction. An electric two-wheeler carries none of this compounding exposure.
No other vehicle segment offers the combination of scale, feasibility, and speed. An electric scooter requires a 2–4 kWh battery, compared with 40–70 kWh for an electric passenger car. The economics already work for urban commuters, charging is done at home overnight on a standard socket.
Three-wheelers deserve equal strategic attention. Auto-rickshaws and cargo three-wheelers are the backbone of last-mile connectivity across India — in cities, in district towns, and in rural areas. They operate long hours, cover high daily distances, and consume fuel disproportionate to their numbers. India sells over 700,000 three-wheelers annually, and operators are acutely price-sensitive, making them naturally motivated to switch when the economics are right. Electric three-wheelers are commercially available, proven, and increasingly cost-competitive. The segment requires financing access and policy continuity, not new technology.
Two concerns are frequently raised about the pace of electrification. The first is that Electric Vehicles (EV) shift dependency from oil to coal. India added more renewable energy capacity last year than in any previous year, and the SHANTI Act, passed by Parliament in December 2025, targets 100 gigawatts of nuclear capacity by 2047. An EV charged on India’s grid today already produces fewer lifecycle emissions than the same vehicle would have five years ago — because the grid itself is cleaner. That improvement is structural and ongoing.
The second concern — that EVs replace oil dependency with dependency on imported battery cells and rare earth magnets — does not hold up to scrutiny. Oil dependency is recurring and permanent. India imports crude every single day for the entire operational life of every petrol vehicle, with no prospect of a domestic alternative. Cell and magnet dependency is a one-time input per vehicle, and the critical materials in EV batteries can be recovered and recycled at efficiencies of 90–99%, meaning the same materials serve multiple vehicle lives. Globally, Japan, Australia, France, the United States, and Brazil are actively building non-China rare earth supply chains. The dependency is real but transitional.
India’s own policy trajectory reflects the direction of travel. Clean technology passenger vehicles grew at more than double the pace of the overall automobile industry in FY2026, with their share of total sales rising to 29%, up from 9% five years earlier, according to SIAM data. The government’s decision to accelerate electric bus procurement in response to the West Asia crisis demonstrates that the connection between EV adoption and energy security is understood at the policy level. The data on two and three-wheelers makes an equally compelling case. Delhi’s draft EV Policy 2026, released on April 11, makes the same argument. It proposes banning new ICE two-wheeler registrations from April 2028 and three-wheelers from January 2027 — citing that two-wheelers alone constitute 67% of the capital’s vehicle stock. What Delhi is proposing as a city-level air quality measure is, at the national scale, an energy security imperative.
India has absorbed oil price shocks before — in 2008, in 2013, in 2022. Each time the response was calibrated to manage the impact. Each time the structural exposure remained. The current moment is not categorically different in origin, but it is different in the options available. The technology exists, the economics are compelling, and the scale of the opportunity in two and three-wheelers is unmatched by any other intervention available to policymakers today.
by admin_xw3245oj | Mar 11, 2026 | In the news
Restaurants, hotels and eateries are running out of cooking gas. Indian Hotel & Restaurant Association (AHAR) says 20% of establishments in Mumbai have shut due to disrupted commercial LPG supply, warning that closures could reach 50% if the shortage continues. In Delhi-NCR, commercial cylinders are reportedly selling on the black market for up to ₹1,500.
The crunch, of course, stems from the US-Israel war against Iran and the ensuing conflict in West Asia that has disrupted tanker movement through the Hormuz Strait, route for 85-90% of India’s LPG imports. Domestic LPG prices have risen by ₹60 in a week, pushing a 14.2 kg cylinder in Delhi to ₹913, the highest since August 2023.
With 62% of domestic LPG demand met through imports, this disruption was always a matter of when, not if. The crisis in commercial kitchens, however, is only the visible tip of the iceberg. India’s cooking fuel vulnerability runs far deeper.
India has made progress under Pradhan Mantri Ujjwala Yojana (PMUY), connecting 32.99 cr households to LPG, including 10.33 cr subsidised connections. Yet, universal clean cooking remains elusive. About 500 mn people – nearly 40% of the population – rely on biomass fuels. Household air pollution from these fuels contributes to an estimated 1.2 mn premature deaths annually. Even within LPG-connected households, the ₹913-a-cylinder price – ₹613 for PMUY beneficiaries – pushes low-income households back to firewood and dung, particularly in rural areas where these fuels are available.
To sustain LPG usage among the poorest, GoI has committed ₹12,000 cr in PMUY subsidies for 2025-26, and sanctioned an additional ₹30,000 cr in compensation to IOCL, BPCL and HPCL for under-recoveries on domestic LPG sales. This is the fiscal cost of a system structurally dependent on imported fuel.
While India scrambles to secure LPG supply, its ethanol distilleries are operating below full capacity. India’s ethanol production capacity has grown to 1,822 cr litres, supported by about 500 distilleries nationwide. The E20 blending programme requires 1,016 cr litres annually, leaving a substantial surplus available for other applications.
Critically, cooking applications don’t require anhydrous fuel-grade ethanol at 99.9% purity. 90-95% purity suffices, which lowers both production costs and the barrier to scaling. Diverting about 250 cr litres toward cooking would serve nearly 20 mn households without compromising E20 blending targets. The infrastructure to produce, store and move ethanol across India already exists.
Ethanol burns cleanly, producing primarily CO2 and water vapour, with zero PM2.5, and negligible toxic emissions compared to biomass. Centre for Science and Environment estimates that household cooking emissions in India exceed 350 mn tonnes of CO2 annually, surpassing the entire transport sector. Ethanol clean cooking directly addresses this at scale.
India’s 4.5 mn street food vendors represent a compelling entry point for ethanol cooking deployment. These vendors operate in public spaces where LPG use is often restricted due to explosion risk. Ethanol stoves carry no such risk. Transitioning 1.1-1.3 mn urban vendors from biomass or kerosene to ethanol could reduce 3-4 mn tonnes of CO2 annually, while materially improving occupational health and food safety outcomes.
The technology is ready, and its effectiveness is not untested. HPCL and IIT Guwahati have developed an ethanol-fuelled cookstove, and HPCL has announced plans for ethanol ATMs at retail outlets to enable household refills. A pilot in the Sundarbans tested ethanol stoves among households entirely dependent on forest wood, demonstrating viability in resource-constrained, off-grid environments. States are in active conversations about district-level pilots, with existing inter-state ethanol logistics. For example, Karnataka alone has an installed capacity of 270 cr litres, providing a ready supply chain.
UN’s Food and Agriculture Organisation’s (FAO) Global Bioenergy Partnership (GBEP) has documented bioethanol clean-cooking programmes. Validated pilots in Ethiopia and Mozambique – both resource-constrained with high biomass dependence – have demonstrated that ethanol cooking is technically viable, socially acceptable and replicable across diverse geographies. India, with its far larger distillery base, superior logistics infrastructure and existing policy frameworks, is better positioned than any of these countries to deploy ethanol cooking at national scale.
India’s ethanol ecosystem has matured. But the policy framework has not kept pace. Two specific steps are needed:
- GoI should designate bioethanol as an approved cooking fuel under PMUY, enabling its integration into the existing subsidy and distribution architecture.
- 3 state-level pilots should be commissioned, drawing on existing distillery capacity, oil marketing companies (OMC) distribution networks, and stove technology validated at scale.
The fiscal arithmetic is unambiguous. Sustaining LPG import dependence at 62% costs over ₹42,000 cr annually in subsidies and under-recoveries. It leaves India structurally exposed to geopolitical shocks, as the current West Asian crisis has demonstrated. Bioethanol cooking is not a replacement for LPG. It is a domestically produced, import-independent complement that India’s distilleries can supply today.
The capacity exists. The technology exists. The crisis to justify urgency is on every front page this week. What is needed now is a policy decision.
by admin_xw3245oj | Dec 31, 2025 | BLOG
New Delhi, 6 February 2026
By Tannaz Ahmed and Tushar Gandhi
NITI Aayog’s Trade Watch Quarterly for Q1 FY26 (April–June 2026)[1] offers a detailed snapshot of India’s trade performance at a time of moderate global recovery. While the report carries a thematic focus on automotive exports, a key insight lies in its assessment of India’s Free Trade Agreements (FTAs) and their evolving impact on trade outcomes.
Rather than revisiting the case for FTAs in principle, the quarterly examines how existing agreements are performing in practice, raising important questions about sequencing, competitiveness, and alignment with domestic production capacity.
Trade Context and FTA Exposure
In Q1 FY26, India’s total merchandise and services trade reached USD 439 billion, registering 3.5% year-on-year growth. Services exports continued to anchor overall trade performance, expanding by 10% and generating a USD 48 billion surplus, which partially offset pressures on the merchandise trade balance.
Within this broader trade context, the report notes a widening trade deficit with FTA partners, drawing attention to the evolving balance between imports and exports under existing preferential trade arrangements.
Rising Trade Deficit with FTA Partners
A key finding of the quarterly is a 59.2% year-on-year increase in India’s trade deficit with FTA partners during April–June. The widening gap reflects import growth outpacing exports, indicating that preferential market access has translated unevenly into export outcomes across sectors.
The report highlights uneven performance across FTA partner regions, including parts of ASEAN, where export growth has lagged relative to import expansion. These patterns underscore the need to examine how sectoral competitiveness and production capabilities interact with preferential trade frameworks, rather than attributing outcomes solely to the presence of FTAs.
FTAs and Structural Competitiveness
Rather than framing the FTA deficit as a short-term imbalance, the Trade Watch Quarterly places it within a broader structural context:
- Import growth from FTA partners is concentrated in intermediate and capital goods, consistent with India’s participation in global value chains.
- Export underperformance highlights the need to assess domestic competitiveness and export readiness across sectors.
This framing suggests that FTA trade outcomes draw attention to factors influencing production and export readiness, rather than market access alone.
Sectoral Signals from FTA Trade
The report highlights notable shifts in export composition that interact with FTA outcomes. Electronics exports grew 47% year-on-year, accounting for over 11% of total exports, underscoring India’s expanding role in technology-intensive value chains.
In contrast, traditional export drivers such as petroleum products saw relative decline. This divergence indicates that FTA benefits are more likely to result in sectors where India is integrated into global production networks, rather than in legacy commodity-driven exports.
Automotive Focus as an FTA Case Study
Although the report’s thematic section focuses on automotive exports, its relevance to FTAs is broader. The analysis points to India’s strong performance in auto components and select vehicle categories, alongside underexploited potential in passenger vehicles within the USD 2.2 trillion global automotive market.
From an FTA perspective, the automotive chapter illustrates how preferential access alone is insufficient without parallel improvements in competitiveness, standards alignment, and integration into global value chains. FTAs, in this sense, function as enablers but only where domestic capabilities are aligned with global standards.
Policy Implications for Future FTAs
The Trade Watch Quarterly implicitly calls for a recalibration of India’s FTA strategy, shifting the focus from coverage to performance. Key policy signals include:
- The need to sequence FTAs alongside industrial and supply-chain policies, rather than treating them as standalone trade instruments.
- Greater emphasis on tariff rationalisation and two-way trade, ensuring that imports support competitiveness rather than displacing domestic production.
- Aligning FTA outcomes with broader manufacturing and services competitiveness.
The report also underscores the importance of execution capacity, both at the policy and firm levels, in determining whether FTAs translate into sustainable export gains.
What the Quarterly Does Not Address
While the report provides a granular assessment of FTA-related trade outcomes, it does not delve into renegotiation timelines, safeguard mechanisms, or investment chapters within FTAs. Its focus remains on trade performance rather than treaty design, leaving open questions about how future agreements will incorporate lessons from current deficits.
Overall Assessment
The Q1 FY26 Trade Watch Quarterly presents a nuanced view of India’s FTA experience. The sharp rise in the trade deficit with FTA partners serves as a warning against assuming automatic gains from preferential access, while sectoral successes highlight where FTAs can work when backed by competitiveness and scale.
For policymakers and stakeholders, the message is clear: FTAs must be embedded within a broader strategy of production upgrading, value-chain integration, and execution discipline. As India continues to negotiate and recalibrate its trade agreements, the effectiveness of FTAs will depend less on their number and more on how well they align with domestic capabilities and long-term trade objectives.
[1] Trade Watch Quarterly for Q1 FY26 (April–June 2026)
by admin_xw3245oj | Dec 19, 2025 | In the news
India’s Parliament concluded its Winter Session on 19 December, after sitting for 15 days between 1 and 19 December. Ten government bills were introduced, of which eight were passed by both Houses across sectors including energy, insurance, rural employment and public finance.
While the overall legislative volume was limited, the session focussed on addressing policy frameworks that needed reworking of institutional structures, to achieve their higher potentials.
Two legislations — the SHANTI Bill and the VB-G RAM-G Bill — were particularly significant, not because they introduce entirely new policy areas, but because they reset the design of existing frameworks that have shaped investment and programme delivery.
SHANTI Bill: Updating India’s Civil Nuclear Framework
The Sustainable Harnessing and Advancement of Nuclear Energy for Transforming India (SHANTI) Bill, 2025 marked a legislative shift in India’s civil nuclear architecture since the sector was opened to international cooperation in the late 2000s.
The Bill provides a basis for private and joint-venture participation across segments such as reactor construction, operations, maintenance and supporting infrastructure. At the same time, it retains government control over regulation, safety and licensing, reflecting the strategic nature of the sector.
Importantly, the legislation recognises the importance of private sector participation to support India’s nuclear expansion ambitions. Provisions related to long-term power offtake arrangements and clearer allocation of operational responsibility are intended to improve project viability and attract non-public capital.
The Bill also aims to increase the role of state governments, particularly in areas such as land acquisition, local clearances and grid integration — reinforcing the importance of centre–state coordination in large energy projects.
VB-G RAM-G Bill: A Redesign of Rural Employment Policy
The VB-G RAM-G Bill, 2025, which replaces the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), represents the first redesign of India’s rural employment guarantee framework since the programme’s inception. The new bill aims to modernise rural employment, whereby it will integrate job allocation with digital governance platforms, improve efficiency, transparency, and alignment with national infrastructure projects, potentially creating a digitally connected rural workforce.
However, the scheme also raises some concerns where marginalized workers without access to smartphones, Aadhaar-linked bank accounts, or digital literacy could be excluded, undermining the scheme’s inclusivity.
While the Bill raises the guaranteed employment ceiling to 125 days, its more consequential change lies in how employment is structured and delivered. States are given greater flexibility to define permissible works, enabling closer alignment with local infrastructure needs, climate adaptation priorities and asset creation goals.
The legislation also places stronger emphasis on digital attendance, work verification and outcome-based monitoring, shifting the programme toward a more execution-driven model. This increases the administrative role of state governments, while also placing greater accountability on implementation capacity at local levels.
Insurance Sector Reform: Improving Capital Availability
Parliament also approved amendments raising the FDI cap in insurance to 100 percent. While incremental, the change aims at improving capital availability, product depth and coverage expansion, particularly in under-served segments such as health and risk insurance.
In addition to the headline reforms, the Parliament also cleared a set of legislations that underpin fiscal management, taxation and regulatory housekeeping. The Appropriation (No. 4) Bill, 2025 authorised withdrawals from the Consolidated Fund of India to meet ongoing government expenditure, ensuring continuity of programmes. The Manipur Goods and Services Tax (Second Amendment) Bill, 2025 aligned the state’s GST framework with decisions of the GST Council, focusing on classification clarity and compliance simplification. Amendments to the Central Excise law sought to rationalise duty structures and reduce interpretational disputes, with the stated objective of improving transparency and easing compliance for industry. The Parliament also passed the Health Security se National Security Cess Bill, 2025, creating a dedicated cess to support public health preparedness and national security expenditure. The Repealing and Amending Bill, 2025 removed obsolete statutes and corrected inconsistencies across existing laws, continuing the process of legislative clean-up.
What the Session Did Not Address
Equally notable were the areas that remained outside the session’s legislative agenda. There were no major reforms in digital regulation, competition law or climate legislation. This selective approach reinforces the view that current policy efforts are focused on execution and restructuring, rather than introducing new laws.
Overall Assessment
The Winter Session reflects a measured policy approach, revisiting legacy frameworks which needed reworking rather than incremental changes.
For stakeholders involved in infrastructure delivery, long-term investment, programme implementation and regulatory compliance, the session provides early signals on where policy attention is likely to remain concentrated. As these laws move into the rule-making and implementation phase, outcomes will depend on centre–state coordination, administrative capacity and regulatory clarity rather than legislative intent alone.
by admin_xw3245oj | Oct 16, 2025 | In the news
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