Government eyes higher domestic output, reduced import reliance

India will launch a national deepwater exploration mission to boost domestic oil and gas production and cut reliance on imports. The plan was outlined by Prime Minister Narendra Modi in his Independence Day address on Friday.

Nearly 90 per cent of the country’s oil and 50 per cent of its natural gas demand are met through imports, placing a heavy burden on foreign exchange reserves. Officials estimate that a substantial portion of the national budget is diverted to fuel purchases that could otherwise fund social and economic development.

In 2015, the government set a goal of reducing oil and gas import dependence by 10 per cent within seven years. Instead, reliance has increased as domestic output stagnated and consumption rose.

India’s exploration record over the past decade has been weak, with no major discoveries reported. Deepwater exploration remains highly capital-intensive and technologically demanding. At present, only two producing deepwater gas blocks operate in the Krishna-Godavari Basin, one managed by Reliance Industries and the other by Oil and Natural Gas Corporation (ONGC).
Despite multiple policy reforms, foreign participation in Indian exploration has been limited. The government is now seeking to attract international oil and gas companies to upcoming licensing rounds by addressing long-standing investor concerns.

Officials believe the Andaman Sea holds significant potential and could emerge as a major contributor to India’s energy basket if explored systematically.