Prime Minister Manmohan Singh's recent visit to Brazil has set the stage for a new era in South-South cooperation across three continents: Asia, South America and Africa. The visit is significant as the Indian Prime Minister chose to participate in the India-Brazil-South Africa (IBSA) summit and the Non Aligned Movement (NAM) summit in Havana instead of the United Nations General Assembly between 19-27 September 2006. This was the first summit of the IBSA initiative, launched three years ago as a forum for South-South cooperation and India's commitment to the IBSA reflects its strategic thinking on the diversification of energy sources.

Energy security was an important issue for India at the IBSA summit. The Indian economy has grown at a steady pace in the recent past. Gross domestic product (GDP) and energy consumption are correlated; hence, energy needs will continue to rise as the Indian economy grows at seven-eight per cent. It is estimated that India's oil import dependence will increase substantially. Most oil imports are likely to be from the politically unstable Middle East. Hence, prudence demands that India look for alternate sources of energy. India is exploring the possibility of importing natural gas from Russia, Myanmar, Bangladesh, Vietnam and Iran.

India has also been diversifying its energy sources by investing in oil assets outside the country. It currently imports nearly three-fourths of its crude oil needs, mostly from the Middle East. Current attention on India's energy security is fueled by the threat of terrorism and instability in oil exporting nations, fears of a scramble for supplies, geopolitical rivalries, and national requirements for energy to power economic growth. The change in Indian thinking on energy can be understood from the draft energy policy, which examines relevant issues from the viewpoint of energy requirement and supply options, and seeks to ensure energy security. The report is an attempt by India to take a macro view of plausible energy scenarios in future.

The Prime Minister's visit to the IBSA summit reflects this new line of thinking. Brazil has an advantage of being a producer of an alternate fuel - ethanol, the utilization of which could help secure India's energy needs - and advantages also in the areas of agricultural technology, offshore drilling techniques and aerospace. Reliance Industries Limited (RIL) is setting up a global scale ethanol facility in Brazil. India has to import up to 30 per cent of its requirement of industrial alcohol or ethanol. Therefore, blending ethanol with petrol will be cost effective and help reduce dependence on expensive petro-products. ONGC Videsh Ltd (OVL) has invested $ 400 million in a southeastern oilfield in Brazil.

South Africa by virtue of its large uranium reserves can be a leading source of uranium for India as it develops nuclear energy. South Africa has an estimated 354,000 tonnes of recoverable uranium ores, accounting for 11 per cent of the world's reserves. Though, South Africa is a net importer of oil and gas, it has a well-developed synthetic fuel industry supported by abundant coal resources. Sasol, is one of the world's largest coal liquefaction plant. Coal, on the other hand, is the most important and abundant fossil fuel in India, and meets 55 per cent of India's energy needs. Coal liquefaction technology from South Africa can be used to reduce the mining and operation costs in India.

The Prime Minister met the Iranian President Mahmoud Ahmedinejad on 15 September 2006 on the sidelines of the NAM Summit at Havana. This meeting came after some bitterness had crept into India-Iran relations since India voted against Iran in the International Atomic Energy Agency (IAEA) in September 2005. India is making efforts to rebuild its relationship with Iran to establish a gas pipeline from southern Iran to India via Pakistan. India and Iran also held talks to work jointly in different parts of the world including Central Asia, Africa, Latin America, across economic spheres of transportation, trade and industry, and energy, in particular. The Prime Minister also met the Venezuelan President Hugo Chavez and discussed the potential for investment in Indian energy and infrastructure sectors, as also the possibilities of investment by Venezuela, a major oil producer, in India's infrastructure

The new strategy of diversifying energy sources will help India ensure adequate energy supplies. India is taking steps to reduce its vulnerabilities by new investments in exploration, development and pipeline projects, new supply arrangements and new technologies. The shift in India's energy policy priorities augurs well for it to attain the estimated GDP growth of 10 per cent.