UAE and Saudi Arabia Show Strong Interest in India's Refining Sector, Minister Says

The United Arab Emirates and Saudi Arabia have expressed significant interest in investing in India's oil refining sector, Indian Oil Minister Hardeep Singh Puri said on Thursday. The potential capital inflows align with plans by the world's third-largest oil importer and consumer to substantially increase its domestic processing capacity.

India's Expansion Plans

Speaking at an event, Puri detailed India's strategy to boost its refining capacity from the current level of approximately 5.4 million barrels per day (bpd) to a target range of 6.2 million to 6.4 million bpd. This expansion is set to be achieved through a combination of building new refineries and upgrading existing facilities.

The minister highlighted the substantial capital expenditure required for such projects. He estimated the cost of constructing a single new refinery to be between ₹780 billion and ₹800 billion (approximately $8.13 billion to $8.34 billion).

Securing Downstream Market Access

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Puri explained that the primary motivation for foreign producers to invest is the opportunity to tap into India's vast and expanding energy market. "No company is willing to come and invest in a refinery unless they are also able to share your expanding downstream market," he stated.

Confirming the commitment from the Gulf nations, the minister added, "So, they are very, very serious about these investments." For major crude exporters like Saudi Arabia and the UAE, securing stakes in downstream assets in key growth regions is a strategic priority to ensure long-term demand for their oil.

Market Context

This potential investment underscores a deepening energy partnership between India and major Middle Eastern producers. For India, attracting foreign capital is critical to funding its ambitious energy infrastructure goals and enhancing its energy security. For investors, it offers a foothold in one of the world's fastest-growing major economies.