New Delhi, Sept. 7 -- India's spectacular 7.8 per cent real GDP growth in Q1 FY27 deserves to be viewed against the extraordinary circumstances in which it was achieved. The quarter was marked by a severe West Asian conflict, disruption around the Strait of Hormuz, volatile crude prices and fears of an energy supply shock cascading across economies. Yet factories ran, trucks moved, airlines flew, restaurants and hotels remained open and households continued to receive fuel. Energy security was not the sole reason for India's growth, but it was a critical shock absorber that prevented an external geopolitical crisis from becoming an internal economic crisis.
Concerted acquisition diversification as a strategy
India imports nearly 90 per cent of its crude requirement, with roughly 45 per cent of imports transiting Hormuz before the crisis. Yet within days of the disruption, India substantially altered its sourcing map. By March 2026, around 70 per cent of crude imports were arriving through routes outside Hormuz, against about 55 per cent earlier. India was sourcing crude from 40 countries, compared with 27 in 2006-07. Russian purchases rose sharply as Middle Eastern supplies declined, while additional cargoes were secured from the UAE, Venezuela and other producers. By May, crude imports had rebounded to 5.27 million barrels per day, while some Indian refineries were operating above 100 per cent of nominal capacity.
This was not crisis management improvised in March, but the payoff from a decade-long strategy of widening sourcing across Russia, Africa, Latin America, the United States and other producers, alongside developing refining capabilities for diverse crude grades. For an import-dependent economy, energy security does not necessarily mean eliminating imports; it means ensuring that no geography, supplier or shipping route can hold the economy hostage.
The LPG test
The second test was closer to home. India imports about 60 per cent of its LPG consumption, with approximately 90 per cent of those imports normally arriving through Hormuz. On March 8, the government directed refineries and petrochemical complexes to maximise LPG production by diverting propane, butane, propylene and butenes into the LPG pool. Domestic production subsequently increased by 25-28 per cent, while cargoes were secured from the United States, Norway, Canada, Algeria and Russia.
Protecting supplies mattered beyond household kitchens. Commercial LPG supports restaurants, hotels, dhabas, canteens and food processors, meaning shortages could quickly have translated into higher food costs, closures and employment disruption. Commercial supplies were therefore prioritised even as the transition towards piped natural gas (PNG) was accelerated.
Turning crisis into reform
Under the Natural Gas Control Order issued in March, domestic PNG and CNG for transport received 100 per cent supply protection, while alternative LNG procurement was activated. City-gas companies were asked to prioritise PNG connections for hotels, restaurants and canteens. By May 21, about 7.64 lakh PNG connections had been gasified since March, with infrastructure created for another 2.81 lakh. India did not merely seek to survive the shock; it used the crisis to accelerate a more resilient energy architecture.
Strategic storage is the next layer. India is moving towards an integrated "Strategic Fuel System", with a proposed $42-billion decade-long programme to add 28 million tonnes of crude, 9 MT of LNG and 4 MT of LPG storage. Expanding reserves at home and through international partnerships would provide another buffer against geopolitical disruptions.
The next frontier: Atmanirbharta
Resilience, however, cannot be the final objective. India must reduce its underlying import vulnerability, making Prime Minister Narendra Modi's emphasis on energy Atmanirbharta strategically important. ONGC and Oil India are undertaking ultra-deepwater exploration in the Andaman basin, with drilling targeting depths of up to 5,000 metres. A recent well yielded traces of light crude and condensate and evidence of an active petroleum system, although commercial accumulations have not yet been established. The Andaman story must therefore be approached with optimism, but without prematurely declaring an oil bonanza.
The 7.8 per cent GDP figure consequently represents more than headline growth. Consumption remained robust, manufacturing expanded, services stayed buoyant and investment strengthened while the global energy system was under extraordinary stress. Energy security did not create all these growth drivers. But it protected them.
Diversified imports, high refinery utilisation, stronger domestic LPG production, strategic reserves, greater gas penetration and deeper exploration are components of the same architecture. The Hormuz crisis demonstrated that India could absorb an extraordinary external shock without surrendering its growth momentum. The challenge now is to move from resilience towards greater self-reliance. If diversified sourcing can be combined with domestic exploration, deeper reserves and new discoveries, energy security can become not merely a shield against crises but an enabler of India's economic rise.
Views expressed are personal. T Sinha is a national spokesperson of the BJP, and D Deepak is a seasoned energy professional
Published by HT Digital Content Services with permission from Millennium Post.