With high rates of economic growth and over 15 percent of the world’s population, India has become a significant consumer of energy resources. In 2006, India was the sixth largest oil consumer in the world. The global financial crisis and credit crunch have slowed India’s significant economic growth particularly in the manufacturing sector, and GDP growth rates have declined from 9.3 percent in 2007 to 5.3 percent in the fourth quarter of 2008. Despite a recent slowing economy, India’s energy demand continues to increase. In terms of end-use, energy demand in the transport sector is expected to be particularly high, as vehicle ownership, particularly of four-wheel vehicles, is forecast to increase rapidly once the global economic crisis abates and domestic spending levels resume.

India lacks sufficient domestic energy resources and must import much of its growing energy requirements. India is not only experiencing an electricity shortage but is also increasingly dependent on oil imports to meet demand. In addition to pursuing domestic oil and gas exploration and production projects, India is also stepping up its natural gas imports, particularly through imports of liquefied natural gas. The country’s ability to secure a reliable supply of energy resources at affordable prices will be one of the most important factors in shaping its future energy demand.

Coal accounts for more than half of India’s total energy consumption followed by oil, which comprises 31 percent of total energy consumption. Natural gas and hydroelectric power account for 8 and 6 percent of consumption, respectively. Although nuclear power comprises a very small percentage of total energy consumption at this time, it is expected to increase in light of recent international civil nuclear energy cooperation deals. According to the Indian government, 30 percent of India’s total energy needs are met through imports.