Delayed clearances and permission by Indian Ministry of Defence took another foreign investment away from the country.
BHP Billiton Limited, one of the world’s largest miners, surrendered its 9 oil and gas exploratory fields in India which it had won at government auctions. The delay in permission for clearance of exploration of blocks results BHP to give up on their explorations.
The company was awarded 9 exploration blocks during 2008-2010 under India’s new exploration licensing policy. The policy had rules according to which potential hydrocarbon resources are developed in Asia’s third largest economy. BHP’s move will affect India’s oil and gas sector. Indian government had plans to bring in foreign investment bodies to increase domestic production and lessen its imports. This in turn could have helped the country to meet the increasing demand of the fuel in the domestic market in future.
The exploration blocks given up by BHP contained six blocks having major stakes of GVK Power and Infrastructure Limited. BHP Billiton has one exploration still left in India, the MB-DWN-2010/1 deepwater field in Mumbai. It has a production-sharing contract signed with the government along with UK’s BG Group.
Exaggerated restrictive regulations on foreign investment resulted Walmart, the world’s largest retailer by sales, discard their Joint Venture WITH Bharti Retailers, one of India’s biggest retailers.
POSCO, a South Korea based firm, has also discarded its USD 5.3 billion steel plant project from India because of clearance delays. ArcelorMittal, a Luxembourg-based steelmaker, also confirmed to take back its plans of building steel plants in the country because of the same reasons.
India is the fourth largest energy-consuming nation in the world following US, China and Russia. India imports around 80% of its crude oil and 25% of its natural gas requirements from global market. The Petroleum Ministry has plans to go for re-auction of the blocks and will exclude the lands waiting for clearances to avoid further such situations in front to the foreign investors.
Indian Government should try and resolve the hindrances coming in the way of FDIs in our country. Government might be working hard to resolve these issues but the outcomes are not so effective. Instead, FDIs with a plan to invest in India are returning back with complaints of delay in clearance of explorations.