Amid escalating tensions in the Middle East and fears of disruptions to global oil supplies following the closure of the Strait of Hormuz, Anil Agarwal, Chairman of Vedanta Limited, has urged India to prioritise domestic production of oil, gas and minerals, warning that the country’s heavy reliance on imports leaves it vulnerable to geopolitical shocks.
In a post on the social media platform X, Agarwal highlighted how conflicts in resource-rich regions such as Iran pose significant risks for India, given its strong dependence on overseas energy supplies.
“Today, 90% of our oil is imported. This fuels our transport. Around 66% of our LPG is imported and used in homes for cooking, while nearly 50% of LNG is imported to power low-emission public transport vehicles,” Agarwal said.
His remarks come at a time when global energy markets have been shaken by geopolitical tensions in the Middle East, particularly concerns around the closure of the strategically critical Strait of Hormuz, one of the world’s most important oil shipping routes. Market analysts warn that prolonged supply disruptions could push crude oil prices into the three-digit range, placing additional pressure on importing nations.
According to Agarwal, oil and gas collectively represent the largest component of India’s import bill, amounting to nearly $176 billion annually. He cautioned that sharp increases in energy prices could significantly impact key macroeconomic indicators, including the current account deficit, the value of the rupee, fiscal deficit and inflation.
“The common man ultimately has to bear the burden of higher prices,” Agarwal noted.
He also pointed out that gold, India’s second-largest import at approximately $65 billion annually, tends to surge during periods of global uncertainty. Together, imports of oil, gas and gold account for nearly 30% of India’s total imports, further underscoring the country’s vulnerability to global market fluctuations.
To address these challenges, Agarwal called for comprehensive reforms and urged the government to declare the natural resources sector a national priority. He advocated for faster project approvals and suggested exempting the sector from lengthy regulatory procedures, including public hearings, to accelerate development.
“Government should consider self-certification for environmental clearances, followed by periodic audits, to ensure compliance while enabling faster progress,” he said.
Additionally, Agarwal recommended that the government consider divesting up to 50% stakes in state-owned natural resource assets to experienced operators, while ensuring that there are no job losses and that employees are offered shareholding opportunities.
Emphasising the importance of strengthening domestic capabilities, Agarwal concluded, “Self-reliance is more than a desirable aspiration. It is an immediate economic and strategic imperative.”
His call underscores the growing urgency for India to accelerate domestic resource development and strengthen energy security in an increasingly volatile global environment.
