India is facing an unprecedented challenge in the energy sector where it has to respond to the rapidly increasing energy demand, widespread environmental issues, lack of access to electricity by some 400 million people, increasing reliance on oil imports, and an increasing scrutiny and political pressure from the international com-munity regarding the impact of India’s energy consumption on the global climate change. This paper examines the implications of a business-as-usual (BAU) scenario of energy growth in India in regard to two major issues: the security of supply and the climate change. It then considers various measures of energy efficiency and energy diversification to arrive at policies which would enable the country to move towards a more sustainable scenario. Under this sustainable scenario India will maximise the use of clean energy resources, minimise inefficiencies in the energy supply-demand chain, and reduce its dependence on imported oil. At the same time, the sustainable scenario would result in a slower growth in CO2 emissions. The benefit of carbon saving to the global environment supports a package of cooperation between India and the international community, which would enable India to access and afford the most advanced energy technologies as they become available.
