India's dependence on fossil fuels
Coal production had been the focus of the government to meet energy demands of the world’s second largest population. In 2021, primary energy consumption in the country was dominated by coal. According to the Central Electricity Authority, renewable sources of energy were expected to generate half of the country’s power by 2030, the other half however, was still expected to be generated through coal.Natural gas and crude oil had been equally important fossil fuels along with coal. Natural gas could lead the way for a gradual transition from high carbon-intensive sources as the country aims to cut emissions. The installed natural gas capacity in India was over 24 thousand megawatts as of February 2022. Unlike coal, the power sector was not the leading consumer for natural gas within the nation - it was the heavy industries instead. Due to its abundant availability as well as its economic benefits, the natural gas sector had been an attractive investment area for the Indian government as well as foreign players. In 2020, the petroleum and natural gas sector had FDI inflows of around 59 billion U.S. dollars.
In 2013, net crude oil and petroleum product imports made India the fourth largest consumer and net importer of oil related products. The transportation industry was one the major drivers for this demand. Despite having an onshore production volume of over 16 million metric tons in 2020, the crude oil import volume into the country increased by just 0.2 percent that year. The government aimed to cut the oil imports dependence by more than 60 percent by the year 2022. However, falling domestic production due to ageing fields and foreign competition, the policies and initiatives had been struggling to give satisfactory results.
