Raghuram Rajan's warning to India after Hormuz shock: Build bigger oil reserves, diversify faster
GS3Economy · S&T · Environment · Security· Growth, inflation & macro indicators· Mains·
Why in news
Former RBI Governor Raghuram Rajan warned India to build larger strategic oil reserves and diversify import sources to mitigate energy security risks exposed by the Hormuz Strait disruption.
Background
Raghuram Rajan highlighted the vulnerability of India's energy security due to the Hormuz Strait's strategic importance. He recommended a multi-pronged strategy: increasing strategic oil reserves, boosting domestic coal production, and accelerating renewable energy development.
Facts for Prelims
- FactHormuz Strait: A critical maritime chokepoint through which a significant portion of the world's oil supply passes.
- S&TStrategic Petroleum Reserves (SPR): Underground facilities used to store crude oil to ensure energy security during supply disruptions.
- PostRaghuram Rajan: Former Governor of the Reserve Bank of India (RBI).
For Mains
Q. Analyze the vulnerabilities in India's energy security and suggest measures to reduce dependence on volatile maritime chokepoints and external oil imports.
Dimensions to cover in your answer
- Supply chain vulnerability: High reliance on the Hormuz Strait creates a single point of failure for energy imports.
- Fiscal-Energy trade-off: Balancing the immediate need for coal production with long-term decarbonization and renewable energy targets.
- Currency-Trade link: Impact of FDI inflows on rupee stability versus the direct impact of global crude oil price shocks.
Keywords: Energy Security · Strategic Petroleum Reserves · Import Diversification · Maritime Chokepoints · Macroeconomic Stability
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This note is generated automatically from SatyaDheesh's news feed and mapped to the UPSC CSE syllabus. Check facts against the original report or PIB before using them in an answer.