Energy Dependency Ratio
Formula
EDR = (Net Energy Imports / Total Primary Energy Consumption) × 100
- Net Energy Imports – Total energy imports minus total energy exports (in quadrillion BTU)
- Total Primary Energy Consumption – Domestic consumption from all sources
Why It Matters
A high Energy Dependency Ratio signals structural vulnerability to supply disruptions, commodity price shocks, and geopolitical energy weaponisation. For a country with EDR > 50%, a 30% rise in global oil prices translates directly into an approximate 15% deterioration in terms of trade — with second-order effects on current account, inflation, and monetary policy optionality. EDR is particularly critical for assessing India's external balance sensitivity to oil price cycles and the OPEC+ cartel decisions.
Institutional Use
The IEA, European Commission, and World Bank embed EDR in energy security scoring models. For India-focused macro analysis, this metric is tracked by RBI's Monetary Policy Committee as an input to imported inflation forecasts. Sovereign credit analysts at JPMorgan and GS treat high EDR as a negative structural factor in EM ratings.