FDI Policy for Petroleum Sector

100% wholly owned subsidiary (WOS) is permitted for the purpose of market study and formulation.
100% wholly owned subsidiary is permitted for investment/Financing.


A. Petroleum Products Marketing:

Upto 100% through automatic route for setting up infrastructure relating to marketing in P&NG Sector
Upto 100 through automatic route for laying of Natural Gas/LNG pipelines, market study & formulation and
investment financing in P&NG Sector*
Upto 100% through automatic route for cash & carry wholesale trading and export trading
(*subject to sectoral regulations issued by MOP&NG)

Authorization to Market Transport Fuels

Marketing of transport fuels permitted to private Indian and foreign companies investing or proposing to
invest, over 10 years from authorization, Rs.2000 crore in exploration & production, refining, common carrier
pipelines for NG/LPG/Petroleum Products or terminals for crude oil/LNG resulting into additionality/new
capacity. Proposed investment entails bank guarantee for Rs. 500 crore. Marketing companies required to meet
Marketing Service obligations as well as Retail Service obligations.

Marketing of PDS kerosene and Domestic LPG-Marketing of subsidized PDS kerosene and Domestic LPG to
be undertaken only by Public Sector Undertakings. Now parallel marketing of kerosene also to be carried out
by PSU oil companies. Restrictions exist on use of PDS kerosene and Domestic LPG


B. Pipelines:

In case of Natural Gas / LNG Pipeline, 100per cent FDI is permitted under the non-automatic route.
100per cent FDI is permitted under the automatic route for Petroleum Product Pipeline Sector

C. Refining

In case of private Indian companies, FDI up to 100 per cent is permitted under the automatic route.FDI in sector
i.e. gas refineries has been allowed via the automatic route. In case of PSU oil refineries, FDI will be allowed up
to 49 per cent under automatic route as against previous routing of the investment through FIPB.

D. Exploration & Production

Under the exploration policy, FDI up to 100% is allowed for small fields through competitive bidding; up to
60% for unincorporated JV; and up to 51% for incorporated JV with a No Objection Certificate for medium size
fields.


Automatic Route

FDI up to 100 per cent is allowed under the automatic route in all activities/sectors except where the provisions
of the consolidated FDI Policy on 'Entry Routes for Investment' are attracted. FDI in sectors /activities to the
extent permitted under the automatic route does not require any prior approval either of the Government or the
Reserve Bank of India.

Government Route

FDI in activities not covered under the automatic route requires prior approval of the Government which is
considered by the FIPB, Department of Economic Affairs, Ministry of Finance.
Government Route

FDI in activities not covered under the automatic route requires prior approval of the Government which is
considered by the FIPB, Department of Economic Affairs, Ministry of Finance.