India sees E&P, LNG, clean energy as key investment opportunities for Japan: minister

India's growing upstream, LNG, shipping and hydrogen sectors present ample opportunities for Japanese companies to collaborate, an Indian government statement said Nov. 17, quoting petroleum minister Hardeep Singh Puri, who emphasized that such partnerships would be a step toward energy stability in the region.

"At a time when India is opening up over $500 billion in investment opportunities across E&P, LNG, city gas distribution, hydrogen, shipping and new fuels, India and Japan perfectly complement each other," Puri told a round table event with leading Japanese industry representatives in Tokyo.

India's scale, growing energy demand and infrastructure expansion under the current government, paired with Japan's technological expertise, provide a foundation for regional energy stability, he added.

Puri highlighted that during Prime Minister Narendra Modi's visit to Japan in August, the two countries adopted the India-Japan Joint Vision for the next decade. Building on the 2022-26 target of Yen 5 trillion in public and private investment from Japan to India, a new goal of Yen 10 trillion ($68 billion) in private investment has been set for the near future.

Policy changes

India's policy landscape has undergone significant transformation through measures such as 100% foreign direct investment in the energy sector, transparent bidding and year-round exploration licensing, Puri said, adding that these changes have helped create a predictable and investor-friendly environment.

The opening up of new sedimentary basins for exploration and the government's push for investor-friendly policies -- such as the Open Acreage Licensing Policy and the Oilfields (Regulation and Development) Act -- are laying the groundwork for growth.

According to S&P Global Energy analysts, efforts are underway to increase investments in exploration activities in Category II and Category III basins, which contain contingent and prospective resources requiring active exploration and monetization, particularly in frontier areas such as deepwater and ultra-deepwater.

Should the reforms proposed in the ORD Act be integrated into the OALP in ongoing and future bidding rounds, there is a possibility of increased interest from global oil majors, which could significantly enhance exploration efforts, the analysts said.

India's six major oil and gas public sector undertakings generated revenues of about $315 billion in fiscal year 2024-25 (April-March), accounting for nearly 8% of the country's gross domestic product, Puri said.

"Such scale demonstrates India's role as a global energy anchor and a reliable partner for Japanese investors and technology leaders," Puri added.

The minister said that India, as the world's third-largest oil consumer, would account for nearly 30% of incremental global energy demand over the next two decades.

Robust gas story

India's expanding natural gas infrastructure -- which includes an investment outlay of about $72 billion -- would be a major area of synergy with Japan's technological strength, especially in integrating gas with future energy solutions such as hydrogen, Puri said.

India is the world's fourth-largest LNG importer. India's Petroleum and Natural Gas Regulatory Board recently issued the "Vision 2040 -- Natural Gas Infrastructure in India" report, outlining a strategic blueprint to transform the country's natural gas sector while also recognizing gas as a "compelling proposition" to meet its surging energy demand and growing commitment to sustainability.

Under the base case scenario, India's natural gas demand is projected to grow from about 260 million cu m/day to 300 million cu m/d by 2030 and to between 365 million cu m/d and 500 million cu m/d by 2040, it shared earlier this month.

Meanwhile, an analytics report by Energy in September indicated that India is expected to become the second-largest LNG importer by the early 2030s, trailing only China, and is forecast to surpass 70 million metric tons/year by the end of the 2030s. India's LNG imports stood at about 27 million mt/y in 2024, according to data from Platts, part of Energy.

Puri's visit to Japan followed immediately after his trip to South Korea, where he highlighted opportunities for collaboration with South Korean companies to domestically construct crude and LNG carriers, as rising energy demand drives the need to expand its shipping infrastructure.