Monday, 19 May, 2025
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New Delhi’s recoverable energy reserves—651.8 million tonnes of crude oil and 1,138.6 billion cubic meters of natural gas—are concentrated primarily in its vast sedimentary basin, signalling significant potential for growth in domestic energy production.
India’s upstream oil and gas sector produces $25 billion in annual output. But behind that figure lies a deeper malaise. Analysts say the problems are scattered—uninspiring geology, inconsistent policy direction, and a punishing fiscal regime. The consequences go beyond economics. Energy security is a precondition for New Delhi’s $10 trillion GDP ambition. Yet the data signals fragility. The country imports nearly 90 per cent of its crude, half its natural gas, and more than 60 per cent of its LPG—leaving it acutely vulnerable to price shocks, geopolitical disruptions, and global supply chain shifts.
Cosmetic reforms won’t suffice. India must arrest the decline in domestic output, revive exploration with real incentives, and streamline regulation. Crucially, the government must stop treating hydrocarbons as a sunset industry. In a world navigating energy transitions, domestic oil and gas production must be seen not as an environmental liability, but as a strategic necessity. Without that recalibration, India’s growth story rests on an import-heavy foundation—strategically brittle and economically precarious.
India’s upstream energy ambitions continue to underwhelm. The latest round under the Open Acreage Licensing Policy (OALP)—meant to revolutionise exploration by letting firms pick their own blocks—garnered interest from just one global major: BP. Its bid for a block in the Saurashtra Basin, in partnership with Reliance Industries and ONGC, was the lone signal of foreign interest in the ninth round.
On March 12, the Lok Sabha passed the Oilfields (Regulation and Development) Amendment Bill, 2024, marking a crucial milestone in the modernisation of oil and gas sector. The Bill seeks to address a long-standing grievance among global oil majors: regulatory unpredictability. By promising greater stability in operational tenure and lease conditions, the Bill offers a welcome shift toward contractual consistency—a key demand from companies increasingly wary of fluctuating policy landscape.
More importantly, it preserves the state’s authority over lease approvals and royalty collection, while maintaining a sector-neutral stance with no apparent bias toward public or private players. This balanced approach is an encouraging signal of intent.
Experts are of the view that through these amendments, the Centre aims to attract investment into the oil and gas sector while also ensuring stability and long-term security in the country’s energy production. This move reflects a broader strategy to renovate the industry and reduce dependence on external sources.
India holds 651.8 million tonnes of recoverable crude oil reserves and 1,138.6 billion cubic meters of recoverable natural gas reserves, largely concentrated within its expansive sedimentary basin. These substantial reserves offer a tremendous opportunity for the country to boost domestic production and reduce its dependence on energy imports—a crucial step towards strengthening energy security.
At present, New Delhi imports crude oil from 39 countries and is in the process of purchasing from a 40th, showcasing the diverse sources of oil. This highlights the urgent need for growth in domestic production and greater energy diversification to mitigate the vulnerabilities tied to such heavy import reliance.
Worth mentioning here is that India’s import strategy will be key in shaping its economic trajectory. The crude oil imports rose 4.2 per cent to $161 billion in FY24-25, even as average prices trended lower. Russia maintained its position as the top supplier, leveraging discounted crude amid rising OPEC prices.
