India’s Energy Future Cannot Sail Through Hormuz Forever

Pipelines rarely make headlines. They run underground, carry no passengers, and do their work invisibly. Yet globally, they remain the backbone of energy transportation. In the US, pipelines carry 70% of crude oil and petroleum products, compared to 97% in Canada. In India, historically, about half of crude oil has been transported through pipelines, though that share has been rising in recent years.

But when a conflict flares in West Asia and freight rates spike overnight, the question of how India moves its energy from port to pump suddenly becomes very consequential. The country sources about 51% of its natural gas from abroad, and about 60% of its LPG. Of that LPG, 90% comes through the Strait of Hormuz. When tensions flare in the region, as they have repeatedly over the past two years, freight costs rise, insurers reprice risk, and the delivered cost of energy in India moves before any physical supply has been touched. The pipeline question is, in part, a question about how much of that exposure India wants to carry indefinitely.

In 2015, India had roughly 15,000 km of natural gas pipeline, most of it in the west and north. PNGRB has since authorised about 34,273 km, of which about 80%, or 27,427 km, is now operational as of December 2025, with about 8,489 km under construction. That is a meaningful expansion by any measure, though the starting point was low enough that the network is still catching up to where demand actually sits today.

Authorised petroleum and petroleum product pipelines stand at about 15,148 km, with about 66%, or 10,029 km, operational. Domestic PNG connections have grown six-fold in a decade to about 16.7 million as of March 2026, from just 2.5 million in 2014. That last figure is where the real story sits: millions of households that once relied on cylinders now have gas coming through a pipe in the wall. Schemes such as the Pradhan Mantri Urja Ganga Project and Pradhan Mantri Ujjwala Yojana have also encouraged households to move away from traditional cooking fuels and adopt LPG.

Domestic Gaps
The 'One Nation, One Gas Grid' initiative is pushing this further as India’s natural gas consumption is projected to grow 1.6x to 300 mmscmd by 2030 from the current levels. Major pipeline approvals, financial support for projects in low-demand regions, a unified tariff structure, LNG terminal development, and the SATAT initiative’s push towards bio-CNG are all part of this broader effort. PNGRB has now authorised city gas distribution across 307 geographical areas, covering virtually the entire country.

India's gas pipeline network operates at roughly 50% capacity. Natural gas sits at just 7% of India's total energy mix. Globally, that figure is 23-25%^[1], and natural gas met 17% of the total growth in world energy demand in 2025^[2]. India's lag here is not primarily an infrastructure story. Import costs are high, regional distribution has not filled out evenly, and last-mile connections have lagged well behind what the trunk network can now reach.

Cross-Border Ambitions
Beyond its borders, India's pipeline record is considerably thinner. The country still moves the overwhelming bulk of its energy imports by sea, and while that works well enough in stable times, it offers very little flexibility when those sea lanes come under pressure. China's experience with the Kazakhstan-China Oil Pipeline is instructive here: a single overland link diversified its import base and gave it a degree of insulation from maritime disruptions that India does not currently have.

India has tried. The Turkmenistan-Afghanistan-Pakistan-India, or TAPI, pipeline has been in various stages of negotiation and planning since the 1990s. The Iran-Pakistan-India pipeline goes back further still, and carries even more diplomatic baggage. Both projects have stalled for multiple reasons: Afghanistan's instability, Pakistan's domestic politics, sanctions exposure on the Iranian side, and the difficulty of securing financing when the transit risk is genuinely hard to price.

The India-Bangladesh pipeline functions because the two countries share a border without a history of direct conflict and because the route involves no third-party transit state. TAPI and IPI are different propositions altogether. That does not make them impossible, but it does mean ambition alone will not move them forward. The diplomatic scaffolding must come first, and with more patience than either project has historically received.

Pipelines will not shrink India's import bill, but they can blunt the economic impact when disruptions hit. A better-connected domestic grid allows inland fuel distribution to continue even when coastal logistics come under strain. It also creates more flexibility for switching between gas and liquid fuels during periods of volatility.

The harder work lies ahead: faster cross-border project execution, genuine reform of the land acquisition and right-of-way processes that have historically stretched timelines, and a push to raise the network's utilisation from 50% to something approaching its actual capacity. None of this is especially glamorous policy. But the next time a tanker is diverted away from the Strait of Hormuz, India will be in a far stronger position if the pipes are already in the ground.

(*Views are personal)