India Launches $8.8B Push for Offshore Oil & Gas Exploration

India Targets Energy Self-Sufficiency With New Offshore Scheme

The Indian government has unveiled an $8.8 billion incentive package aimed at accelerating private-sector offshore oil and gas exploration, as it seeks to cut its 90% dependence on imported crude. According to a report by The Maritime Executive, India also imports roughly half of its natural gas needs, and the ongoing closure of the Strait of Hormuz has sharpened concerns over the country’s exposure to disruptions in Middle East supply routes.

The initiative, branded Samudra Manthan and driven by Prime Minister Narendra Modi’s government, centers on a National Offshore Exploration Scheme that will cover half the cost of every deep-sea well drilled, up to a cap of $70 million per well. Notably, the plan also opens up maritime areas previously restricted on national security grounds, widening the map for exploration companies.

A Wider Search Area

Under the scheme, exploration is expected to extend across India’s Exclusive Economic Zone — spanning the Arabian Sea in the west, the Bay of Bengal in the east, and waters around the Andaman Islands near Myanmar. The government anticipates that increased offshore activity will generate work for multiple Indian ports and create opportunities for domestic suppliers and sub-contractors, while reducing reliance on global supply chains.

The source text also notes a possible knock-on effect: while the announcement did not explicitly frame it this way, boosting domestic production could reduce India’s need for Russian oil, which has become increasingly difficult for Indian refiners to process given ongoing US sanctions pressure.

Courting Foreign Majors — With Baggage

A key aim of Samudra Manthan is to attract foreign oil majors from the United States, Europe, and Japan, many of whom have historically stayed on the sidelines due to India’s foreign direct investment restrictions and regulatory complexity. The plan also has to contend with reputational scars from past disputes. Cairn Energy (now Capricorn Energy), which discovered the large Mangala oil field in Rajasthan back in 2004, later found itself embroiled in a lengthy legal fight with the Indian government over a retroactive capital gains tax claim. The dispute was eventually resolved in Cairn’s favor, with the Permanent Court of Arbitration in The Hague awarding the company $1.7 billion in costs and damages.

The report also points to a potential silver lining for Indian firms: with the UK government moving to restrict further North Sea exploration in response to the Hormuz crisis, there could be spare capacity, expertise, and equipment available for Indian operators to draw on.

What It Means for the Offshore Sector

India currently holds an estimated 1.6 billion tons of hydrocarbon resources, and the government’s target under Samudra Manthan is to expand that figure to 2.2 billion metric tons.

For ship owners, offshore support operators, and technical managers, a genuine ramp-up in Indian deep-sea drilling activity would translate into real demand for support vessels, subsea installation tonnage, and associated port infrastructure across three coastlines. New drilling campaigns in previously restricted zones also raise practical questions around vessel readiness — condition surveys, engine room inspections, and pre-charter assessments become more important when older or repositioned offshore support vessels are pressed into service on short notice to meet a sudden surge in exploration contracts. Given the legal and regulatory friction that has historically slowed foreign participation in Indian energy projects, operators considering entry into this market would be well advised to pair commercial due diligence with independent technical verification of any assets or vessels being deployed, particularly where contracts move quickly to capture subsidy windows. Whether the $70 million per-well cap and 50% cost-sharing structure will be enough to overcome the sector’s legacy trust issues remains an open question, but the scale of the incentive signals that New Delhi views maritime energy security as an urgent strategic priority rather than a long-term aspiration.

Reviewed by Ibrahim Halil Ceylan, Marine Surveyor at Apeks Marine.