29-Jun-2022: Cabinet approves Deregulation of Sale of Domestically Produced Crude Oil

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has approved ‘Deregulation of Sale of Domestically Produced Crude Oil’, whereby Government has decided to cease allocation of crude oil and condensate w.e.f. 01.10.2022. This will ensure marketing freedom for all Exploration and Production (E&P) operators. The condition in the Production Sharing Contracts (PSCs) to sell crude oil to Government or its Nominee or Government Companies shall accordingly be waived off. All E&P companies will now be free to sell crude oil from their fields in domestic market. Government revenues like Royalty, cess, etc. will continue to be calculated on uniform basis across all Contracts.  As earlier, exports will not be permissible.

This decision will further spur economic activities, incentivize making investments in upstream oil and gas sector and builds on a series of targeted transformative reforms rolled out since 2014. The policies relating to production, infrastructure and marketing of oil and gas have been made more transparent with a focus on ease of doing business and facilitating more operational flexibility to operators/industry.

Background: Government has carried out several progressive reforms in Exploration and Production (E&P) Sector in last eight years such as pricing and marketing freedom for gas, discovery of gas price through competitive e-bidding process, introduction of Revenue Sharing Contracts under Hydrocarbon Exploration Licensing Policy (HELP), etc. A large number of blocks have since been allotted through several bidding rounds. As a result of these efforts, allocation of acreage has almost doubled as compared to area awarded before 2014. Since February 2019, reforms have focussed on production maximization with no revenue sharing for difficult basins other than windfall gain.

20-May-2022: Government  lifts “Export Prohibition” on Bamboo Charcoal for Higher Profitability of Bamboo Industry

Government has lifted the “export prohibition” on bamboo charcoal, a move that would facilitate optimum utilization of raw bamboo and higher profitability in the Indian bamboo industry. Khadi and Village Industries Commission (KVIC), which is supporting thousands of bamboo-based industries in the country, was persistently requesting the Government to lift the export restriction on bamboo charcoal. Chairman KVIC Shri Vinai Kumar Saxena had written to the Minister of Commerce and Industries, Shri Piyush Goyal, seeking to lift the export restriction on bamboo charcoal for the larger benefit of the bamboo industry.

“All the bamboo charcoal made from bamboo obtained from legal sources are permitted for export subject to proper documentation/certificate of origin proving that the bamboo used for making charcoal has been obtained from legal sources,'' read the notification issued by the Directorate General of Foreign Trade (DGFT).

Chairman KVIC, Shri Saxena thanked Minister of Commerce and Industries, Shri Piyush Goyal for the policy amendment saying the decision would reduce the high input cost of raw bamboo and make the bamboo-based industries, mostly in the remote rural areas, financially profitable. “Bamboo charcoal has a huge demand in the international market and lifting of export prohibition by the government will enable the Indian bamboo industry to tap this opportunity and exploit the huge global demand. This will also ensure optimum utilisation of bamboo waste and thus contribute to the Prime Minister’s vision of Waste to Wealth,” he said.

Notably, the Indian bamboo industry, at present, is grappling with extremely high input cost owing to inadequate utilization of bamboo. In India, bamboo is mostly used in manufacturing of Agarbatti wherein, a maximum of 16% is used for manufacturing of bamboo sticks while the remaining 84% of bamboo is a complete waste. As a result, the Bamboo input cost for Round Bamboo Sticks is in the range of Rs 25,000 to Rs 40,000 per MT as against the average Bamboo cost of Rs 4,000 to Rs 5,000 per MT.

However, export of bamboo charcoal would ensure complete utilization of the bamboo waste and thus make the bamboo business more profitable. Bamboo charcoal for barbeque, soil nutrition and as a raw material for manufacturing activated charcoal, has great potential in international markets like the USA, Japan, Korea, Belgium, Germany, Italy, France and the UK.

Earlier, in order to create more employment in bamboo-based industries, particularly in Agarbatti industry, KVIC, in 2019, had requested the Central Government for policy changes in import on raw Agarbatti and import duty on round bamboo sticks that were heavily imported from Vietnam and China. Subsequently, in September 2019, the Ministry of Commerce “restricted” the import of raw Agarbatti and in June 2020, the Ministry of Finance increased the import duty on round bamboo sticks.