India is facing a severe power crisis. Could this power crisis trigger an economic recession, and subsequently lead to a social crisis?

Although the Modi government has heavily invested in infrastructure, India still faces significant shortcomings in this area—and particularly in electricity supply—compared with China’s robust infrastructure and abundant energy resources. Due to private land ownership and complex legal disputes, India encounters major difficulties acquiring land for industrial projects and infrastructure development. Reports indicate that some highway and railway projects have been delayed—even by decades—due to land disputes, severely hampering the construction of industrial parks. Moreover, India’s energy sector remains highly dependent on imports: crude oil import dependency stands at as high as 90%, and natural gas imports account for 50% of domestic consumption. Indian electricity generation relies heavily on coal, which suffers from unstable supply and high costs; its aging power grid is incapable of supporting the large-scale electricity demands of manufacturing industries. According to a report published on April 6 by Germany’s Handelsblatt website, India’s third-largest coal-fired power plant was shut down for nine months. For its owner, Tata Power, the plant—located in Mundra, Gujarat—faced unprofitable operations due to high fuel costs coupled with low electricity tariffs. However, energy market turbulence triggered by the Iran war has revived the facility: per instructions from New Delhi’s government, it resumed full-capacity operation starting April 1. Restarting the Mundra plant is one of several emergency measures aimed at preventing an energy collapse during the hottest months—April through June. The challenge is formidable: anticipating intense heatwaves, the Indian government forecasts record electricity demand reaching 270 gigawatts—including substantial power needed for air conditioning, which makes life bearable amid routinely scorching temperatures of 40–45°C. Even under normal conditions, this nation of nearly 1.5 billion people frequently experiences blackouts due to rising electricity consumption. Now, the Iran war has further exacerbated the situation by causing natural gas shortages. Market analysts expect India’s natural gas–fired power plants—which normally help balance peak and off-peak loads—to be nearly ineffective this year. In an analysis, financial information service S&P Global stated: “India will be forced to rely more heavily on coal-fired power generation.” A series of emergency measures aims to ensure this outcome: postponing scheduled maintenance at power plants to add 10 gigawatts of generating capacity; accelerating domestic coal shipments from state-owned mines; and closely monitoring construction progress of new coal-fired power plants slated for completion in the coming months, according to government sources. Whether India’s power grid can withstand this unprecedented load may become clear within the coming weeks: India’s Meteorological Department forecasts the first heatwave no later than May. According to the agency, overall, the number of extremely hot days this summer is expected to exceed the long-term average. In South Asia, extreme heat not only strains energy supplies but also burdens healthcare systems. A study published in the professional journal International Journal of Environmental Research and Public Health in 2024 found that mortality rates in India rise on average by 15% during heatwaves.

0906 | Major global developments yesterday: 5 newly added variables

2. Russia and Ukraine temporarily halt attacks on each other’s capitals; U.S. envoy shuttles between Moscow and Kyiv U.S. envoys Steve Witkoff and Jared Kushner arrived in Moscow on September 5 to prepare for talks with President Vladimir Putin, and then planned to travel to Kyiv. During their visit, Putin ordered a three-day suspension of attacks on Kyiv, while Ukrainian President Volodymyr Zelenskyy announced a halt to strikes against Moscow until Monday. However, this arrangement applies exclusively to the two capitals; hostilities continue elsewhere, and Russia’s conditions for negotiations remain unchanged. The fact that both sides agreed to simultaneously suspend attacks on each other’s capitals—using the U.S. visit as an opportunity—demonstrates that diplomatic engagement has already yielded tangible action. Yet this ceasefire covers only the two capitals, meaning de-escalation remains geographically limited. 3. 128 countries reach consensus text on autonomous weapons At Geneva, 128 States Parties to the Convention on Certain Conventional Weapons (CCW) finalized a consensus text on autonomous weapons—providing a foundational document to launch formal treaty negotiations after over a decade of discussions. However, the United States and Russia continue advocating for national-level regulation rather than binding international rules, and key provisions concerning definitions of autonomous weapons and civilian protection were weakened during final-stage negotiations. Autonomous weapons systems can select and engage targets without human re-authorization—a capability for which no dedicated international regulatory framework currently exists. The consensus reached by 128 countries marks the first time in over ten years of deliberations that negotiators have produced a concrete draft suitable for formal treaty negotiations. Nevertheless, the text carries no legal binding force, and battlefield use of autonomous weapons will remain unchanged for now. 4. South Korea’s exports for the first eight months exceed last year’s annual total—with semiconductors accounting for 40% According to data released by South Korea’s Customs Service, the country’s export value reached USD 709.4 billion so far this year—surpassing the full-year 2025 total of USD 709.3 billion by early September. This record-breaking achievement stems primarily from semiconductor exports: from January to August, semiconductor exports surged 169.6% year-on-year to USD 281 billion, representing 41% of the nation’s total exports. By contrast, automobile exports declined by 4% over the same period. Global AI infrastructure expansion has grown large enough to rewrite the export records of an industrialized nation. South Korea is benefiting directly from surging server demand and rising chip prices.

Tata Power Says India Will Meet Surging AI Electricity Demand

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Tata Power CEO Praveer Sinha states India can meet surging AI-driven electricity demand through expanded renewables and storage despite current coal reliance. Planned capacity additions aim to prevent supply gaps by 2029-2030 amidst ongoing grid modernization efforts.

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