FDI in petroleum sector permitted across the Hydrocarbon value chain

The Government of India permits Foreign Direct Investment (FDI) across the hydrocarbon value chain covering the upstream, downstream and midstream sectors. The present FDI policy for petroleum & natural gas sector allows 100% automatic route for exploration and production, refining by the private companies (for public sector companies 49% on automatic route without any divestment or dilution of domestic equity in the existing PSUs), marketing of petroleum products, pipelines, storage and LNG regasification infrastructure and all related services, subject to existing sectoral policy and regulatory framework in the oil and gas sector.

Exploration and Production of oil and gas are capital intensive and high risk activities requiring use of expensive stat-of-the-art technologies and best management practices. Accordingly, the Government is encouraging participation of the private sector, including foreign companies in exploration, production and transportation network for petroleum and natural gas, in order to supplement the domestic investment as well as the efforts of the national oil companies in meeting the rising demand of oil and gas and reducing import dependence.

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