As global energy markets face disruptions due to the Iran conflict, India is rapidly reshaping its oil strategy not just to reduce imports, but to emerge as a major refining and petrochemical export hub.
At the center of this shift is the $20 billion deepwater drilling push led by Oil and Natural Gas Corporation (ONGC). Under “Mission Samudra Manthan,” India plans to drill around 100 wells annually, aiming to boost domestic crude production and reduce its $150 billion oil import burden.
India currently imports crude oil worth nearly $120 billion but exports refined petroleum products worth about $50 billion. This gap highlights a key issue: India operates largely at the lower end of the value chain by importing raw crude instead of producing it domestically. The new strategy seeks to change that by linking domestic oil production directly with refining and petrochemical manufacturing.
With plans to expand refining capacity beyond 250 million tonnes, India aims to convert locally produced crude into high-value products such as fuels, plastics, and specialty chemicals. Major refining hubs like Jamnagar Refinery one of the world’s largest along with upcoming projects like the Ratnagiri refinery and other greenfield plants, are expected to play a central role in this transformation.
Domestic crude supply can significantly reduce refining costs by 15–20%, improving profit margins and making Indian exports more competitive globally. The government estimates that refined and petrochemical exports could reach $70 billion by 2030, with further growth driven by downstream industries.
A major focus area is petrochemicals, where India still depends heavily on imports around $25 billion annually. By using domestic crude and naphtha as feedstock, integrated complexes such as those run by Chennai Petroleum Corporation Limited and Hindustan Petroleum Corporation Limited (HPCL) aim to produce high-value products like polymers, synthetic fibres, and engineering plastics.
Industry projections suggest strong export potential: polymers alone could generate up to $15 billion, synthetic fibres around $8 billion, and engineering plastics about $12 billion. These sectors are critical for industries ranging from packaging to automobiles and electronics.
The ongoing Iran conflict has further highlighted the risks of relying on imported oil, especially through the Strait of Hormuz, where freight costs have surged by nearly 40%. In contrast, domestically produced crude significantly reduces transportation costs and supply risks.
To support exploration and production, India is collaborating with global energy majors such as BP and TotalEnergies. These partnerships bring advanced technology and expertise, particularly for deepwater and ultra-deepwater drilling in regions like the Krishna-Godavari Basin and the Andaman Islands.
The economic impact of this integrated energy push is expected to be significant. Refining activities alone could generate around 300,000 jobs, while petrochemicals may add another 500,000. Downstream industries such as plastics and manufacturing could create up to 1 million additional jobs.
Export infrastructure is also being strengthened, with ports like Mundra Port, Kandla Port, and Chennai Port emerging as key hubs for chemical and refined product exports.
Policy reforms are playing a crucial role. Under the Open Acreage Licensing Policy, the government has opened vast offshore areas for exploration, including previously restricted zones such as the Kerala-Konkan coast and Andaman region. These areas hold the potential for major oil discoveries that could further boost domestic output.
With global energy systems under stress and multilateral trade frameworks weakening, India’s strategy focuses on building long-term resilience through domestic production and value addition. By moving up the value chain from crude importer to refined and petrochemical exporter India is positioning itself as a major player in global energy trade.
If successful, this transformation could not only reduce India’s dependence on imports but also turn the country into a $100 billion export powerhouse in the coming decade.