India’s energy security faced a critical challenge in 2026 when US and Israeli strikes on Iran blocked the Strait of Hormuz, a key oil transit route. This disruption sharply increased Brent Crude prices from $66 to over $100 per barrel, significantly raising India’s crude import costs and widening its current account deficit, according to yourstory.com.
The Strait of Hormuz, a narrow 33 km waterway connecting the Persian Gulf to global oceans, is vital for India’s crude imports, with 40-50% of its oil passing through this route. India imports about 90% of its crude, valued at $117.5 billion in FY26. The sudden price surge added billions to the import bill, exposing India’s vulnerability to external energy shocks. This event underscored a long-standing issue: India’s dependence on unstable foreign energy supplies threatens its economic ambitions.
This energy crisis has accelerated India’s push towards electrification, particularly electric vehicles (EVs). The EV sector is seen not only as a cleaner alternative but also as a strategic move towards energy autonomy. Trucks, though only 3% of the vehicle fleet, contribute disproportionately to transport emissions, highlighting the urgency of transitioning to electric transport. The shift to EVs aligns with India’s goal to reduce reliance on imported oil and build a more resilient economy.
Looking ahead, India is expected to intensify its electrification mandate, focusing on expanding EV adoption and infrastructure. This strategic pivot aims to mitigate future energy supply risks and support India’s ambition to become a $10 trillion economy. The developments in 2026 mark a decisive moment in India’s energy and transport policy, with significant implications for its industrial and environmental future.