For more than a century, access to oil and gas have shaped economic power, industrial growth and geopolitical influence. Nations with large fossil-fuel reserves enjoyed strategic advantages, while import-dependent countries remained vulnerable to global price shocks and supply disruptions. That situation may now be changing.
A coalition of 112 companies, including Nestle, Uber and Ikea, earlier this week, urged governments to place electrification at the centre of economic policy, arguing that replacing fossil-fuel-based technologies with electric alternatives can strengthen energy security, reduce costs and support long-term growth.
What exactly is electrification?
What exactly is electrification?
Electrification refers to replacing technologies powered by coal, oil, diesel, petrol and natural gas with electricity-powered alternatives.
The shift is already visible across sectors.
Petrol and diesel vehicles are being replaced by electric vehicles. Industries are increasingly deploying electric machinery. Homes are switching from fossil-fuel-based heating and cooking systems to electric alternatives. Railways across the world are expanding electrified networks.
The goal is to reduce dependence on fossil fuels and run more of the economy on electricity.
Is electricity becoming the new oil?
Is electricity becoming the new oil?
Coal powered the Industrial Revolution. Oil powered the automobile age and global trade. Experts believe that electricity could power the next phase of economic development.
Fossil fuels have historically been central to national finances and geopolitical power. According to Dr Faruk G Patel, Founder and CMD of KPI Green Energy, the contribution of fossil fuels to Indian government revenues was estimated at nearly ₹9 trillion in FY24, accounting for around 16 per cent of total revenues.
“The transition underway is now beginning to reprice that power,” Patel told Business Standard.
Aditya Solanki, Sustainability Officer at Enso Group, said the world is witnessing a structural shift in which economic influence is being shaped by control over clean power, batteries, smart grids and digital energy systems.
“Rather than completely replacing fossil fuels, electrification is emerging as a second pillar of strategic influence alongside oil and gas. Unlike petro-politics, which was governed by geological endowment, electro-politics is driven by manufacturing scale, technological IP, and capital efficiency, creating an entirely new class of energy superpowers,” he said.
Patel offered a similar assessment.
“The nations that build the panels, the batteries and the grid infrastructure of this era will hold the same strategic cards that oil producers held in the last.”
Why India should pay attention
Why India should pay attention
India’s net import bill for crude oil and petroleum products rose to $116.4 billion in FY25 from $108.6 billion in FY24, highlighting the economy’s continued dependence on imported energy.
Experts argue that electrification offers a potential pathway to reduce that vulnerability.
According to Patel, the International Energy Agency (IEA) estimates that India’s oil import bill could be $1.4 trillion lower between 2019 and 2040 under a cleaner energy pathway, savings that could offset the additional investments required for the energy transition.
Solanki believes India’s biggest opportunity lies in simultaneously scaling up renewable energy and domestic manufacturing.
“India has an opportunity to create a self-reinforcing cycle in which low-cost renewable electricity powers globally competitive manufacturing, while industrial growth drives further demand for clean energy infrastructure,” he said.
Patel noted that government incentives have already helped accelerate domestic manufacturing. The production-linked incentive (PLI) scheme for high-efficiency solar photovoltaic modules has attracted investments worth ₹52,900 crore and generated more than 44,400 jobs as of September 2025.
Oil dependence could become mineral dependence
Oil dependence could become mineral dependence
Electrification promises greater energy security, but it does not eliminate dependence.
A growing concern is that economies could replace dependence on imported oil with dependence on critical minerals such as lithium, cobalt, nickel and rare earth elements.
India currently relies almost entirely on imports for lithium, cobalt and nickel, making supply-chain security a key challenge for the energy transition.
Solanki argued that the nature of this dependence would be fundamentally different.
“Oil dependence is a flow dependency requiring continuous imports every day, whereas critical mineral dependence is largely a stock dependency requiring upfront inputs to build infrastructure that can operate for decades,” he explained.
Patel pointed out that the government has already launched initiatives to address the challenge. India has allocated $3.94 billion under the National Critical Mineral Mission between 2024 and 2031 to secure supplies and strengthen domestic value chains.
Grid: The real challenge
Grid: The real challenge
While discussions around electrification often focus on electric vehicles and renewable energy, experts argue that the real challenge is infrastructure.
India’s power system has demonstrated growing resilience. In April 2026, the national grid successfully met a record peak demand of 256.11 GW without shortages, reflecting improvements in generation and transmission capacity.
“The challenge is no longer simply generating electricity; it is building a highly flexible, digital and storage-enabled grid capable of delivering reliable power at all times,” Solanki said.
The government has outlined an ambitious expansion plan. Under the National Electricity Plan, India aims to invest around ₹9.15 trillion to expand the transmission network to 648,000 circuit kilometres by 2032.
Patel said the transition would require generation, transmission, storage and end-use infrastructure to evolve together. He also pointed to the Union Budget 2026-27, which increased allocations for the Ministry of New and Renewable Energy by over 40 per cent to ₹44,614 crore.
“I do not see a problem; I see the next frontier that India will conquer, just as it has conquered the ones before,” Patel added.
