The Union Cabinet has approved the ₹84,084-crore Samudra Manthan scheme, India’s biggest push yet to find new oil and gas reserves beneath the sea. The programme aims to reverse years of declining domestic production and reduce the country’s growing dependence on imported crude oil. Named after the mythical Samudra Manthan, or the churning of the ocean, the scheme takes its cue from Prime Minister Narendra Modi’s Independence Day speech in 2025, where he called for a modern-day effort to unlock India’s offshore energy resources.
At its core, the programme is about finding more oil and gas within India’s waters. If successful, it could strengthen the country’s energy security and reduce its exposure to volatile global oil markets.
The scheme has four main components. The government will spend ₹28,534 crore on modern seismic surveys to map potential oil and gas reserves beneath the seabed. Another ₹43,200 crore has been earmarked for drilling 60 deepwater exploration wells, with the Centre bearing up to 50% of eligible drilling costs, subject to a cap of ₹675 crore per well. It will also invest ₹10,000 crore in common offshore infrastructure and ₹2,000 crore to develop manufacturing and service hubs for the oil and gas sector.
Why now?
The timing is not accidental.
India’s appetite for energy has grown rapidly over the past decade. But domestic crude oil production has moved in the opposite direction.
The country’s crude oil import dependency has grown from 78.5 percent in 2014-15 to 88.7 percent in 2025-26, says the government.
One of the most significant reasons is that the country’s biggest oil producers are growing old. For instance, Mumbai High, which used to be the backbone of Indian oil production, is one of the many offshore producers of oil that have been working for decades and whose peak time is behind them. On the other hand, aging onshore producers in Assam and elsewhere face natural decline despite technological improvements in oil extraction.
On top of that, the demand keeps growing. India is currently the world’s third-largest oil consumer, and the International Energy Agency expects its oil imports to keep growing in the future due to rising demand outpacing local production.
That leaves India heavily exposed to global oil prices and geopolitical disruptions. Any conflict in major oil-producing regions or disruption to shipping routes can quickly raise the country’s import bill.
Why is offshore exploration so difficult?
Oil drilling operations under the water are much more costly than oil drilling operations in the land.
Initial surveys through sound waves are undertaken by the company to detect the presence of rock structures with hydrocarbons. However, this does not guarantee success as a good rock structure may also be dry.
Drilling operations for deepwater exploration normally costs $80 million to $150 million per well. Studies reveal that only one in four wells drilled in frontier regions is commercially successful.
That is why it is common for governments to co-exist in the risks of exploration activities. Without funding, some companies will not be willing to engage in the drilling operations in frontier offshore regions due to huge costs involved.
The move by the centre to offer some financial assistance in drilling is intended to encourage drilling in such risky regions.
What does the government hope to achieve?
This program is expected to result in a surplus of 600 million metric tons of oil equivalent (MMTOE) in terms of addition to the hydrocarbon reserve of India. In addition, the program seeks to enhance the domestic production of oil and gas from its current level of 62 MMTOE to 80 MMTOE per annum and the country’s hydrocarbon reserve from 1.6 billion tons of oil equivalent to 2.2 billion tons.
Assuming that these discoveries become commercially viable, it would help India save nearly ₹1 lakh crore worth of crude oil import every year.
Nonetheless, these are only long-term plans and not guaranteed results since offshore exploration involves an element of uncertainty. Even successful discoveries may take a few years before achieving commercial production.
The bigger picture
Samudra Manthan is not just an exploration program but indicates a change in the way the Indian government views energy security.
India, in recent times, has been busy creating new exploration blocks and changing licensing policies to encourage investment in the sector. What makes this new program different is the fact that it actually finances seismic surveying and shares risk and costs related to drilling and creating offshore facilities.
The rationale behind this is quite simple. India will never be able to reduce its reliance on imported oil completely in the near future. However, it can at least increase the probability of discovering more of its own natural resources through exploring sectors that private players might find too risky to explore on their own.
The success or failure of the Samudra Manthan will depend upon the discovery of commercially viable resources lying under the Indian waters.
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Prabhat Gupta is Senior Copy Editor of Business Segment. He has worked across broadcast and digital newsrooms, editing and producing stories on politics, business, regulation and current affairs. His work has included writing on global markets and regulatory developments, along with long-form editorial content on business and governance.
He holds a master’s degree in Political Science from the University of Delhi and qualified UGC-NET in the subject, bringing an academic grounding to public affairs and policy coverage.
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