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Which parliamentary panel raised the concern?
The concern appears in the Committee on Public Undertakings’ Twenty-First Report (2025-26), Review of Performance of Petroleum and Natural Gas Sector CPSUs. Chaired by Baijayant Panda, the committee presented the report to the Lok Sabha and laid it in the Rajya Sabha on 11 December 2025. Its statement about oil imports is the committee’s assessment, not a new independent calculation of India’s current import share.
This report is distinct from the Standing Committee on Petroleum and Natural Gas’ report on crude-oil import policy, submitted on 20 December 2023. That earlier report put import dependence at about 87% in FY 2022-23 and also called for diversification.
Why does import dependence create risk?
The 2025 committee report says nearly 89% of India’s crude-oil requirements are imported. It identifies conflict in oil-producing regions, sanctions, civil unrest, and disruptions to transport routes such as the Suez Canal and Red Sea as threats to reliable supply and prices.
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Concentration matters because a disruption affecting a major supplier or route can make replacement barrels harder or more expensive to secure. But sourcing from more countries cannot insulate India from every shock: suppliers may face overlapping political risks, shipments can still depend on shared maritime chokepoints, and crude prices respond to global conditions as well as Indian buying decisions.
Where does India source crude, and what is changing?
The committee’s account of Ministry evidence says Indian Oil Corporation (IOCL) receives a large share of its crude from the Middle East and Russia and is seeking additional sources in Africa and the Americas. It describes a mix of term, spot, and optional term contracts. This records sourcing activity; it does not establish that the recommended diversification is complete.
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Supplier rankings depend on the period and data source. PRS Legislative Research says Russia, Iraq, and Saudi Arabia were India’s top crude suppliers in FY 2023-24, and identifies Russia as the largest supplier that year using provisional data. Its later analysis says Russia remained the largest supplier in the period it discusses, while its share fell from about one-third to less than one-quarter after reported sanctions disruptions beginning in November 2025. PRS attributes that later shift to cited news reporting; it is not a measurement made by the parliamentary committee.
Import-dependence figures also vary by report and period. PRS’s 2024-25 petroleum analysis reports 87.4% for FY 2022-23 and 88.6% for FY 2023-24, citing Petroleum Planning and Analysis Cell figures. Those historical figures should not be treated as interchangeable with the 2025 committee’s rounded “nearly 89%” statement.
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What does the committee want the government to do?
- Diversify sources and contracts: Expand the range of supplier countries and contractual arrangements rather than relying heavily on a narrow set of sources or terms.
- Strengthen strategic petroleum reserves: Build the country’s capacity to draw on stored crude when imports are disrupted. The report makes this recommendation but the cited material does not quantify the added capacity or its expected effect.
- Develop alternative import routes: Reduce exposure to disruption along key shipping corridors by pursuing other routes.
- Institutionalize risk management: Use hedging and flexible term contracts as part of a more formal approach to managing price and supply risks.
- Coordinate support for overseas assets: The committee calls for the petroleum ministry, the Ministry of External Affairs, and other agencies to address diplomatic, investment, taxation, and regulatory obstacles faced by public-sector companies in oil-producing countries.
How do the resilience measures differ?
| Measure | What it can address | What it does not establish |
|---|---|---|
| Broader supplier base | Concentration in particular countries or regions. | Protection from global price movements, sanctions affecting multiple suppliers, or shared shipping disruptions. |
| Flexible contracts and hedging | Some contractual and price exposure, depending on the terms and risk-management strategy. | A guaranteed supply of crude or a stated savings amount; the report provides no quantified impact. |
| Strategic reserves | A buffer that can be released during a supply interruption. | Permanent replacement for imports or protection against every duration and scale of disruption. |
| Alternative routes | Exposure to a particular route or chokepoint. | Immunity from disruption elsewhere in the shipping network. |
| Domestic production and fuel substitution | Potentially reduce demand for imported crude, depending on the scale and type of replacement. | Evidence that crude-import dependence has already declined by a specified amount. |
How does wider energy policy fit in?
The Ministry of Petroleum and Natural Gas said in December 2024 that its approach included domestic production, natural gas, alternate and renewable fuels, EV-charging infrastructure, refinery improvements, efficiency, ethanol blending, and diversification of crude imports. The statement lists measures but does not quantify each measure’s contribution to reducing crude imports.
The ministry’s 2024 year-end review also reported expanded crude sourcing during FY 2023-24. It separately reported long-term LNG supply agreements between IOCL and GAIL and ADNOC for approximately 2.7 million metric tonnes of LNG annually. LNG is natural gas, not crude oil, so those agreements should not be counted as crude-oil supply diversification.
The distinction is important: adding suppliers changes where crude is bought; using other fuels or lowering consumption can affect how much crude is needed. Neither a list of policies nor an announced agreement, by itself, demonstrates a measured reduction in import dependence.
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