As Prime Minister Narendra Modi boarded his aircraft Friday morning for a five-nation diplomatic tour stretching from the Persian Gulf to Northern Europe, Indian motorists woke up to a familiar and politically painful message: fuel prices had gone up again.
The increase in petrol and diesel prices by about Rs 3 a litre, modest in real terms, but symbolically a pointer, captured the central anxiety now shaping India’s foreign policy. Despite India’s rise as a geopolitical power, the nation which depends on imports for 85 per cent of its crude requirements, remains acutely vulnerable to the oldest pressure point in modern politics – energy pricing and availability.
The Prime Minister’s trip to the United Arab Emirates, the Netherlands, Sweden, Norway and Italy is officially framed as a broad strategic outreach touching trade, technology, defence cooperation and climate transition. However, underneath the carefully balanced diplomatic agenda lies a more urgent mission — search for energy security in an increasingly unstable world, framed by wars in the Persian Gulf and in the Ukraine.
“While the PM’s trip to UAE is also about standing by a close friend when its infrastructure has been hit, it’s also about securing crude and LNG supplies and using alternative routes bypassing the Gulf of Hormuz to get them,” said Pinak R Chakravarty former Secretary (Economic Relations) in the Ministry of External Affairs.
The war involving Iran and the widening instability across West Asia have sent tremors through global oil markets and revived fears over the Strait of Hormuz, the narrow maritime artery through which nearly a fifth of the world’s oil supply passes.
Chakravarty pointed out that the BRICS foreign Ministers meeting on Thursday and Friday in New Delhi, where Russian foreign minister Sergey Lavrov was present as was Iranian FM Abbas Aragchi, “also gave us an opportunity to strengthen energy ties. In today’s context energy diplomacy is the primary currency.”
Even without a full-scale regional war, analysts had already projected global oil prices to average between USD 95 -105 a barrel this year, as of Friday, Brent crude was selling at USD 107.54 a barrel. India’s own crude basket, which the Reserve Bank of India had optimistically estimated at around USD 85, climbed to more than USD 114 a barrel last month.
That gap between what was expected and the harsh reality has become more than an accounting problem, it has become every nation’s strategic vulnerability.
Last month, New Delhi cut excise duties on petrol and diesel by Rs 10 a litre to shield consumers from immediate pain. But government officials privately acknowledge that such relief cannot continue indefinitely. State-owned oil marketing companies are already estimated to have accumulated notional losses approaching 1 lakh crore rupees over ten months of volatile energy prices.
“The politico-economic implications are significant. Inflation threatens consumer demand, and is transmitted to impact growth rates. Higher import bills also strain foreign exchange reserves,” pointed out Dr Biswahit Dhar, former WTO Chair at the Indian Institute of Foreign Trade. India’s forex reserves shrank USD 7.8 billion to USD 690.683 as of May 1, this year.
Rising fuel bills risks undermining the government’s broader economic narrative at a moment when India is presenting itself as the world’s fastest-growing major economy.
Against that backdrop, the first stop of Modi’s tour — at the United Arab Emirates — emerges as the most consequential.
Indian officials have worked on agreements on enhanced liquefied petroleum gas supplies and strategic petroleum storage cooperation with ADNOC, the Emirati energy giant.
Discussions are also expected to examine alternative logistical routes through Fujairah, outside the Strait of Hormuz chokepoint, reducing vulnerability should maritime tensions intensify. “It’s imperative that we have alternate routes to secure energy and the Fujairah one is the most logical,” pointed out Chakravarty.
India’s dependence on Gulf energy remains, even as New Delhi publicly champions renewable energy and green transition strategies. The UAE is not merely a supplier; it is India’s third-largest trading counterpart and home to nearly 4.5 million Indians whose remittances form another invisible pillar of the relationship.
There is also a geopolitical opportunity embedded in the crisis. Abu Dhabi’s gradual distancing from the rigid production politics of OPEC has raised expectations that the Emirates may pursue more flexible energy arrangements with major Asian consumers like India and China.
If the UAE leg reflects India’s short-term anxieties, the European portion of the trip reveals how New Delhi increasingly thinks about long-term resilience. In the Netherlands, the discussions are expected to revolve around semiconductors, green hydrogen and technological innovation. In Norway and Sweden, renewable energy, Arctic cooperation and sustainability dominate the agenda. Italy brings conversations on industrial supply chains and clean-energy partnerships.
“Together, the European stops reflect an emerging Indian strategy: insulating the economy from future oil shocks not merely by diversifying suppliers, but by diversifying the energy mix … however one must realise these are long term goals and will not yield results in the short term when rising energy prices will continue to bite,” said Dhar.
Jayanta Roy Chowdhury
