India's heavy reliance on energy imports poses significant risks, as net oil and gas imports have increased by 15 percent to $79.3 billion for FY25 until October.

CLSA, a financial services firm based in Hong Kong, has shifted its focus from China to India, increasing its allocation to India by 20 percent. However, the firm has expressed concerns about India's vulnerability to fluctuations in energy prices. With a large percentage of oil, natural gas, and coal needs being imported, India is highly sensitive to global energy prices. CLSA's Alex Redman has highlighted worries about potential risk premiums in oil prices and the possibility of supply disruptions due to geopolitical tensions, particularly between Iran and Israel. One mitigating factor is the ten percent discount applied to around 40 percent of oil imports from Russia, which provides some relief amidst these concerns.