India approves legislation to boost oil and gas exploration

India has passed legislation intended to encourage oil and gas exploration to help meet its energy needs, a move that highlights the difficulty of persuading the world’s most populous nation to phase out fossil fuels.

India’s dependence on imported crude oil has been rising due to increasing energy demand and lagging domestic production, with imports accounting for almost 90 per cent of consumption between April and December 2024. Oil minister Hardeep Singh Puri said the new legislation, which was passed by the parliament’s upper house in December, would make it easier for companies to explore for oil and gas by ensuring policy stability, allowing international arbitration and extending lease periods.

The “far-reaching” amendments would “further strengthen and propel India’s energy sector”, the oil minister said. India is the world’s third-largest carbon polluter after the US and China, according to the International Energy Agency, and has faced increasing pressure from abroad to move faster to reduce emissions. However, Indian officials say developed nations are responsible for historical emissions and countries such as India are morally justified to use whatever energy source is readily available to catch up economically.

“By virtue of the fact that we are going to rely on conventional energy for some time, we need to step up our exploration and production activities,” Puri said, adding that India currently consumed 5.5mn barrels of crude oil a day, up from 5mn three-and-a-half years ago. “If we continue to grow at the rate at which we are, we will go up to 6.5mn-7.0mn barrels per day,” he said.