New Delhi: India’s heavy reliance on imported oil and gas has left the country strategically exposed, Vedanta Group chairman Anil Agarwal said on Monday, calling for a sharp expansion in domestic exploration activity. “India is vulnerable because we import 90 percent of our oil and gas,” Agarwal said, warning that the country is surrounded by sea on three sides that “can be blockaded in hostile times.” With India set to remain the world’s fastest-growing oil and gas market for at least the next two decades, he said domestic production is no longer optional but critical.
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Agarwal said India’s energy security challenge is not rooted in lack of resources but in inadequate exploration. He pointed to the country’s estimated hydrocarbon endowment of 300 billion barrels equivalent, which he said is “more than 30 times Guyana’s potential.”
India also has strong human capital in the sector. “Across the world, 10 percent of experts in this industry are Indians,” Agarwal said, arguing that the key constraint is the scale of exploration activity. “Exploration is the core of this business,” he added, citing the United States as an example where opening exploration to entrepreneurs transformed the country from an importer into a self-sufficient producer.
Drawing on his experience in the sector, Agarwal said India can produce hydrocarbons domestically at far lower cost. According to him, domestic production can be achieved at half the cost of imports, while the oil and gas sector has already “contributed USD 40 billion to the exchequer” and delivered 1.3 billion barrels through Cairn.
Despite this, he said the sector lacks policy support. “This sector has no government protection or incentive like PLI,” Agarwal said, contrasting it with other strategic industries.
Agarwal identified regulatory uncertainty as a major deterrent to large-scale investment in exploration. “Today, there are hardly 20 active licences in India when there should be 2,000,” he said.
He cautioned that global investors are discouraged by the fear of “processes, notices, court cases and taking away the licenses.” To underline how quickly confidence can erode, Agarwal recalled that “one incident” at Bharatpur’s bird sanctuary caused birds to stop returning, drawing a parallel with investor behaviour.
Agarwal said global energy dynamics have not favoured India’s emergence as a producer. “The world doesn’t want India to produce. It only wants India to be a market,” he said.
However, he argued that India’s own history offers a counterpoint. Referring to the country’s transition to food self-sufficiency, Agarwal said, “It all happened because the government created a movement,” adding that a similar push is now required for energy.
With the government signalling support for growth and investment, Agarwal said Vedanta has set a target to increase production five times. At a national level, he said, “for India, production must grow 10 times to meet future needs.”
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He outlined a vision of broad-based participation in exploration, with “thousands of drilling rigs operating across the country,” and startups and small entrepreneurs investing around Rs 5 crore each.
Summing up his message, Agarwal said, “This is the right time to shift from heavy regulation to facilitation.” While the road to energy independence may be long, he added, “our potential is extraordinary.”
