India's $240B Energy Crisis Demands a Shift to EVs and Solar Power

India faces rising energy costs as global oil and gas prices remain unstable. The country already imports most of its oil and gas, leaving its economy vulnerable to price spikes. A shift to electric vehicles (EVs) and solar power could cut these expenses significantly while reducing dependence on foreign fuel. India currently imports around 90% of its oil and over half of its liquefied petroleum gas (LPG). In the last financial year, energy imports cost the country $162 billion, contributing to a trade deficit of $119.3 billion. If prices stay high, the import bill could climb to $240 billion by 2027.

A full switch to electric vehicles would save India over 120 billion litres of diesel and 62 billion litres of petrol each year. This change would also cut crude oil imports by 180 million tonnes annually—equivalent to $180-200 billion at today’s prices. Such a move could ease inflation, lower subsidies, and reduce the fiscal deficit.

On solar power, India now has an installed capacity of 154 GW, capable of generating 300 billion units (BU) of electricity yearly. China, in comparison, has 1,200 GW installed, with a potential output of 2,400 BU. While India aims for 500 GW of solar power by 2030, experts suggest the target could be more ambitious.

The recent closure of the Hormuz Strait has shown how easily supply routes can be disrupted. Similar blockages in the future would further strain India’s energy security, making renewable sources and EVs a more reliable alternative. Shifting to electric transport and expanding solar power could drastically reduce India’s reliance on imported fuel. The savings in oil costs alone would reach hundreds of billions of dollars each year. With global energy markets remaining unstable, these changes would also help stabilise the country’s economy.