India has approved a major amendment to its oil and gas regulations to boost domestic exploration and reduce its heavy reliance on energy imports. The approval of the Oilfields Amendment Bill 2024 by the Lok Sabha on March 12th 2025, marks a pivotal moment in India’s energy sector by modernising the country’s legal framework for hydrocarbon exploration and production.
The bill aims to strengthen India’s energy security by attracting investment in oil and gas exploration. Currently, the country is highly dependent on foreign suppliers, with India importing nearly 90% of its crude oil and 50% of its natural gas. Therefore, the intentions of the new legislation is to encourage domestic production and reduce this international dependence, protecting its national economy from external shocks.
The goal is to improve the energy sector through several key objectives. Firstly, the bill simplifies red tape by replacing “mining leases” with “petroleum leases,” to streamline the process for oil and gas exploration companies. The move is intended to reduce bureaucratic delays and accelerate project approvals, to propel investment forward. Secondly, the bill also introduces measures to ensure legal and regulatory stability, further making India a more attractive destination for global investors.
India’s Oil Minister, Hardeep Singh Puri, has hailed the bill’s passing as a “historic day” for their endeavour towards greater energy security. According to Puri, the amendments are vital to meet India’s growing energy demand, which has notably surged by 10% from 5 million barrels per day to 5.5 million in recent years and is projected to reach a further 6.5-7 million in upcoming years.
However, whilst it is common knowledge that fossil fuels impact global warming negatively, the Indian government has argued that while global pressure to transition away from fossil fuels is increasing, emerging nations like India have the right to utilise conventional energy sources to sustain economic growth. Puri emphasised that a lack of domestic oil exploration is partly a result of limited investment – something which the new bill aims to rectify.
Industry leaders have largely responded positively to the reforms. Arvinder Singh Sahney, the chairman of Indian Oil Corporation, has stressed that the legislation could help unlock the country’s untapped hydrocarbon potential. The government also aims to broker partnerships with international companies to advance exploration, such as those displayed in recent agreements with Brazil’s Petrobras and ongoing energy trade discussions with the US.
However, despite the positive outlook, some experts and opposition parties have raised concerns about the bill: For example, there are worries that the shift from mining leases to petroleum leases could impact states' taxation rights, leading to legal disputes between state governments and the central government. Furthermore, many critics argue that increasing private sector participation might weaken environmental regulations, as companies may prioritise profit over sustainability, worsening the current global climate crisis.
In total, the road ahead looks bright for India, as the Indian government is positioning the bill as a game-changer for energy security. By offering policy stability, reducing bureaucratic hurdles, and attracting foreign investments, the legislation is expected to surge exploration and production activities. Furthermore, it aligns with India's broader energy security strategy, including the introduction of the 10th Open Acreage Licensing Policy (OALP) bidding round, which concentrates largely on offshore exploration.
As India seeks to balance economic growth with energy security and sustainability, the success of this legislation will rest on its implementation and the reaction from domestic and international investors alike. While concerns remain over environmental impact and revenue-sharing disputes, the new framework could provide India with the much-needed boost in domestic hydrocarbon production, reducing its reliance on foreign oil and gas imports in the years to come.
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