India must identify key chokepoints, mitigate both supply & price risks: EAC-PM Chairman S Mahendra Dev

The Economic Advisory Council to the Prime Minister (EAC-PM) articulated the need for India to systematically identify and mitigate key economic chokepoints ...

What Happened

The Economic Advisory Council to the Prime Minister (EAC-PM) articulated the need for India to systematically identify and mitigate key economic chokepoints exposed by the ongoing West Asia conflict.
Critical vulnerability areas identified include: energy imports (crude oil, LNG, LPG), agriculture and fertiliser inputs (sulphur, phosphates), and mineral resources.
Specific recommendations include: diversifying energy and commodity supply sources, accelerating renewable energy adoption, building strategic reserves for critical commodities, and investing in alternative trade route infrastructure.
Approximately 65.8% of India's sulphur imports originate from West Asian suppliers — sulphur is a critical feedstock for phosphatic and sulphur-based fertilisers, with supply disruptions directly transmitting into food inflation.
Despite these external pressures, the EAC-PM characterised India's macroeconomic fundamentals as resilient, with inflation remaining manageable.

Static Topic Bridges

Economic Advisory Council to the Prime Minister (EAC-PM)

The EAC-PM is a non-constitutional, non-permanent advisory body constituted by the Prime Minister's Office to provide independent economic analysis and policy recommendations. It does not have a fixed mandate or tenure under any statute.

The EAC-PM advises the PM on economic issues of national and international significance.
It is distinct from the Finance Ministry, NITI Aayog, and RBI — it operates independently without executive authority.
Prof. S. Mahendra Dev (an agricultural economist) has served as EAC-PM Chairman.
Previous notable chairs include Dr. C. Rangarajan (also former RBI Governor) and Dr. Bibek Debroy.
The council can commission studies and publish white papers/working papers on economic policy themes.
It is reconstituted by each new government and may be dissolved or re-formed at the PM's discretion.

Connection to this news: EAC-PM's advocacy for systematic chokepoint identification carries advisory (non-binding) weight but signals high-level political attention to supply chain vulnerabilities exposed by the Iran war.

Strategic Petroleum Reserves (SPR) and Energy Security

India is the world's third-largest oil consumer and the second-largest LPG consumer. Its energy import dependence (approximately 87% for crude oil) makes it highly vulnerable to geopolitical disruptions in oil-producing regions.

India's Strategic Petroleum Reserves are managed by Indian Strategic Petroleum Reserves Ltd. (ISPRL), a wholly-owned subsidiary of Oil Industry Development Board (OIDB).
India currently has underground rock cavern storage at three locations: Visakhapatnam (1.33 million tonnes/MT), Mangaluru (1.5 MT), and Padur, Karnataka (2.5 MT) — total SPR capacity: ~5.33 MT.
This translates to approximately 9.5 days of forward consumption cover in strategic reserves, supplemented by commercial stocks for a combined ~30-day buffer.
By comparison, the IEA mandates member countries to maintain 90 days of oil import cover; India is not an IEA member (it has Association status since 2017) but has committed to building SPR capacity.
India's proposed Phase II SPR expansion includes two new underground cavern sites (Chandikhol in Odisha, Padur expansion) to add ~6.5 MT.

Connection to this news: The EAC-PM's recommendation to build strategic reserves directly responds to India's vulnerability during the 2026 Hormuz blockade — where India's ~30-day total buffer was considered insufficient for a prolonged disruption.

Maritime Chokepoints: Hormuz, Malacca, and India's Trade Routes

A maritime chokepoint is a narrow navigational passage through which significant volumes of international trade transit. Control or disruption of chokepoints can rapidly disrupt global supply chains and commodity prices.

Strait of Hormuz: 33 km wide at its narrowest; ~20% of global oil trade and ~17% of global LNG trade passes through it; ~50% of India's crude oil imports transit here.
Strait of Malacca: Connects the Indian Ocean and the South China Sea; critical for India-ASEAN-East Asia trade.
Bab-el-Mandeb: Red Sea entry point; disrupted by Houthi attacks since late 2023, forcing vessels to route around Africa.
India's trade routes pass through multiple chokepoints: Hormuz (energy), Malacca (trade with East Asia), Bab-el-Mandeb (Europe trade).
India has been investing in alternative connectivity: Chabahar port (Iran) for access to Central Asia bypassing Pakistan, IMEC (India-Middle East-Europe Corridor), and rail links through Iran-Afghanistan-Central Asia corridors.

Connection to this news: The EAC-PM's chokepoint analysis covers both energy (Hormuz) and trade route security — underscoring the multi-dimensional nature of India's supply chain vulnerabilities.

Fertiliser Imports and Agriculture Supply Chain Vulnerability

India's agricultural sector is critically dependent on imported fertiliser inputs. Disruption in West Asia affects not only oil prices but also the supply of sulphur (feedstock for single superphosphate and di-ammonium phosphate fertilisers) and other petrochemical derivatives used in agriculture.

India imports ~65.8% of its sulphur needs from West Asian suppliers (Saudi Arabia, UAE, Kuwait).
Sulphur is a primary feedstock for phosphatic fertilisers (SSP — Single Super Phosphate, DAP — Di-Ammonium Phosphate).
India is the world's second-largest consumer of fertilisers; the government heavily subsidises fertiliser prices to farmers.
Fertiliser subsidy in the Union Budget has been in the ₹1.5–2 lakh crore range annually in recent years.
Supply disruption → input cost increase → either larger fiscal burden on subsidy or higher farmer input costs → food inflation transmission.

Connection to this news: The EAC-PM's call to diversify supply sources encompasses not just energy but fertiliser raw materials — a less visible but equally critical economic chokepoint with direct food security implications.

India's Renewable Energy Push as Strategic Energy Security

India's accelerated transition to renewable energy (solar, wind, green hydrogen) is increasingly framed not just as a climate commitment but as a strategic energy security imperative — reducing dependence on imported fossil fuels whose supply chains pass through vulnerable maritime chokepoints.

India's renewable energy installed capacity crossed 200 GW (as of late 2024), with solar capacity exceeding 90 GW.
India's target: 500 GW of non-fossil fuel installed capacity by 2030 (updated NDC target submitted to UNFCCC).
Green Hydrogen Mission: Target of producing 5 million metric tonnes per annum (MMTPA) of green hydrogen by 2030.
Every 10% increase in domestic renewable generation reduces oil import dependence and BoP pressure.
The EAC-PM characterised India's green industrial push as a "strategic necessity" in the context of West Asia energy shocks.

Connection to this news: The EAC-PM's recommendation to accelerate renewable energy adoption is part of the structural response to economic chokepoints — long-term domestic energy sufficiency as a hedge against geopolitical supply disruption.

Key Facts & Data

EAC-PM Chairman: Prof. S. Mahendra Dev (agricultural economist)
EAC-PM nature: Advisory, non-constitutional, non-statutory; reconstituted by PM
India's crude oil import dependence: ~87% of total consumption
Hormuz dependency: ~50% of India's crude oil imports transit Strait of Hormuz
LPG import dependence: 60% of demand; most transited via Hormuz
India's sulphur import from West Asia: ~65.8% (critical for phosphatic fertilisers)
India's SPR capacity: ~5.33 MT (Vizag 1.33 + Mangaluru 1.5 + Padur 2.5) = ~9.5 days cover (strategic); ~30 days total with commercial stocks
IEA recommended SPR cover: 90 days (IEA member countries standard)
India's IEA status: Association member (since 2017, not full member)
India's NDC renewable energy target: 500 GW non-fossil installed capacity by 2030
Green Hydrogen Mission target: 5 MMTPA by 2030
India's renewable installed capacity (late 2024): 200 GW+; solar: 90 GW+
Key maritime chokepoints for India: Strait of Hormuz, Strait of Malacca, Bab-el-Mandeb