Government Boosts LNG Use with 100% FDI, New Stations, and Policy Reforms

India is accelerating its shift towards a gas-based economy by promoting the use of Liquefied Natural Gas (LNG) through a series of strategic initiatives. These include policy reforms, infrastructure expansion, and regulatory amendments to enhance the availability and usage of LNG across key sectors.

The demand for natural gas in India is met through both domestic production and LNG imports. To facilitate this, the government has permitted 100% Foreign Direct Investment (FDI) under the automatic route for establishing LNG infrastructure, including terminals. LNG imports have also been placed under the Open General Licensing (OGL) category, simplifying procurement.

As of now, eight LNG regasification terminals are operational in India, with a combined capacity of 52.7 million metric tonnes per annum (MMTPA).

To promote LNG as a cleaner alternative in the transport sector, the government has launched a nationwide initiative to establish LNG retail stations along major highways—including the Golden Quadrilateral, East-West and North-South corridors, and in key mining clusters. So far, 13 stations have been commissioned by public sector oil companies and 16 by private players.

Further steps to encourage LNG adoption include:

• Recognition of LNG as a transport fuel by the government

• Emission standards notified for LNG vehicles

• Amendments to the Static and Mobile Pressure Vessels (Unfired) Rules, 2025, permitting LNG-fueled vehicles with both spark-ignition and compression-ignition engines to operate in hazardous areas

• LNG mobile dispensing allowed for non-transport sectors like railways, mining, waterways, and testing labs

In addition, the Petroleum and Natural Gas Regulatory Board (PNGRB) in 2020 permitted any entity—irrespective of City Gas Distribution (CGD) authorization—to establish LNG retail outlets for dispensing LNG in liquid form to the transport sector.

This information was shared by Minister of State for Petroleum and Natural Gas, Shri Suresh Gopi, in a written reply in the Lok Sabha today.