Despite a reduced mandate, the BJP-led NDA is set to form India's new government at the end of the nation's marathon elections, ensuring sustained momentum on all fronts, including green industrialisation and green mobility
On June 4, Indian Prime Minister Narendra Modi declared victory in the general election, stating that the Bharatiya Janata Party-led National Democratic Alliance would form the government for the third consecutive time. This is expected to ensure policy continuity for the energy and commodity sectors, according to an S&P Report.
Modi's speech outlined the new government's unrelenting resolve to promote the environment, green industrialisation, and green mobility. The evolving energy landscape, coupled with the turbulent geopolitical situation and heightened attention on India as a hub for oil demand expansion, presents both challenges and opportunities for the new government. It must strive to ensure affordable energy and energy security while working toward meeting its climate pledge. However, the government is now in a relatively better position to handle those challenges than it was a few years earlier, a positive note amidst the potential hurdles.
With India set to emerge as a major epicentre of oil demand, the government is expected to initiate a series of sustainability-oriented steps. These include prioritising refining and upstream investments expanding oil storage facilities and crude import sources to dilute the impact of growing geopolitical turbulence. These strategies, as suggested by analysts and industry sources, are key indicators of the government's potential response to the evolving energy landscape.
Commodity Insights projects India's oil demand to reach 5.54 million b/d by 2030. The return of the NDA government is expected to drive rapid economic growth, leading to increased fuel demand. The Modi government's focus on clean energy will boost the need for renewable energy and storage solutions, while the transportation sector is witnessing rising demand for electric and hybrid vehicles. As the new government begins its third term, it faces the challenge of ensuring an affordable, reliable, and clean energy supply.
India aims to have natural gas account for 15 percent of the country's primary energy mix by 2030, a target set in 2017 that has seen little progress. India also aims to achieve a 20 percent ethanol blending rate in gasoline by 2025, but concerns about feedstock scarcity have been raised. The government is expected to address the challenges related to utilising second-generation feedstocks, such as agricultural and biomass waste, to ensure a more robust ethanol production supply chain.