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FDI Policy for Petroleum and Natural Gas Sector 2013

The oil and gas sector is among the six core industries in India and plays a major role in influencing decision making for all the other important sections of the economy.

India’s economic growth is closely related to energy demand; therefore the need for oil and gas is projected to grow more, thereby making the sector quite conducive for investment.

The Government of India has adopted several policies to fulfil the increasing demand.

The government has allowed 100 per cent Foreign Direct Investment (FDI) in many segments of the sector, including natural gas, petroleum products, and refineries, among others.

The present policy specifies different FDI routes and % of FDI Equity of different activities of this sector.


% of FDI Cap/Equity Entry Route
  • Exploration activities of oil and natural gas fields
  • infrastructure related to marketing of petroleum products and natural gas
  • marketing of natural gas and petroleum products
  • petroleum product pipelines
  • natural gas/pipelines
  • LNG Regasification infrastructure
  • market study and formulation and petroleum refining in private sector
  • subject to the existing sectoral policy and regulatory framework in the oil marketing sector and the policy of the Government on private participation in exploration of oil and the discovered fields of natural oil companies
100% Automatic
Petroleum refining by the Public Sector Undertaking (PSU), without any disinvestment or dilution of domestic equity in the existing PSUs. 49% Automatic

Regulations in Petroleum & Natural Gas Sector

  • Oil Field (Regulation and Development) Act, 1948 and Petroleum and Natural Gas Rules 1959.
  • New Exploration Licensing Policy(NELP).
  • Coal Bed Methane(CBM) Policy.

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