Government Pushes LNG Adoption with 100% FDI, Expanded Stations, and Policy Overhaul

The Government is actively promoting LNG usage through comprehensive policy reforms and infrastructure development, according to Minister of State for Petroleum and Natural Gas Shri Suresh Gopi's Lok Sabha reply on August 7, 2025. The initiatives aim to support India's transition towards a gas-based economy through enhanced LNG availability and accessibility.

100% FDI Under Automatic Route for LNG Infrastructure

Government permits 100% Foreign Direct Investment under the automatic route for LNG infrastructure establishment including terminals, alongside Open General Licensing category for LNG imports. Currently, 8 LNG regasification terminals operate with combined capacity of approximately 52.7 Million Metric Tonnes Per Annum, providing a substantial infrastructure foundation for India's growing natural gas demand.

29 LNG Retail Stations Operational Across India

The Government drives LNG station establishment across Golden Quadrilateral, National Highways, East-West Highway, North-South Highway, and major mining clusters. 13 LNG retail stations have been commissioned by state-owned oil and gas companies, whilst 16 additional stations owned by private entities are operational, totalling 29 functional retail outlets nationwide.

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LNG Recognised as Transport Fuel with Emission Standards

The government has officially recognised LNG as transport fuel with notified emission standards for LNG vehicles. Policy reforms include amending Static and Mobile Pressure Vessels Rules 2025 to allow LNG-fuelled vehicles with spark ignition or compression ignition engines to operate in hazardous areas, expanding operational flexibility.

PNGRB Enables Independent LNG Retail Outlet Establishment

Petroleum and Natural Gas Regulatory Board issued 2020 notification allowing entities to establish LNG retail outlets irrespective of City Gas Distribution authorisation. This regulation applies specifically to LNG stations dispensing liquid LNG to the transport sector, facilitating easier market entry for retail infrastructure development.

Conclusion

The government's comprehensive LNG promotion strategy through 100% FDI under automatic route, 29 operational retail stations, and transport fuel recognition demonstrates commitment to gas-based economy development. With 8 terminals providing 52.7 MMTPA capacity and expanded operational permissions for hazardous areas, India's LNG infrastructure foundation strengthens to meet growing natural gas demand across transport and industrial sectors.

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