Vedanta Chairman Anil Agarwal has urged the government to divest 50% of its stake in petroleum, natural gas, and metals sectors to employees of government companies who should be given a shareholding along with a promise of no retrenchment, in order to ramp up domestic petroleum production in India, after the closure of the Strait of Hormuz petroleum shipping lane, due to the ongoing war on Iran.
Tweeting from his official X account, the Vedanta Chairman stated, “A major geopolitical shock in a resource-rich region, like the ongoing conflict in Iran, makes India vulnerable because of its huge import dependence on natural resources which lie below the ground”.
“Existing assets, most of which are owned by the government, should be utilised fully. At least 50% stake can be divested to proven people. Employees will get shareholding and a promise of no retrenchment. India cannot wait. The world is more unsettled and uncertain than it has been at any time in my memory. There are no permanent friends or partners in today’s geopolitics. Self-reliance is more than a desirable aspiration. It is an immediate economic and strategic imperative,” Agarwal stated.
“We need to immediately declare this sector a national priority, cut cumbersome processes and facilitate rapid increase in domestic production. We have such a progressive government and so this can happen. Some risk has to be taken and we should take it. It will deliver massive returns in terms of jobs too. Young people are entering this sector in a big way and there are talented Indians abroad who can return to India,” Agarwal stated.
“Today, 90% of our crude oil is imported. This fuels our transport, while 66% of our liquefied petroleum gas (LPG) is imported. We use it in our homes to cook. So is 50% of liquefied natural gas (LNG), which goes into low emission public transport vehicles. Oil and gas are the biggest items in our import bill, which is around $176 billion per year, and any sharp rise in prices has an adverse effect on macroeconomic indicators like current account deficit, value of the rupee, fiscal deficit and inflation. The common man ultimately has to pay the price,” Agarwal stated.
“Interestingly, our second highest import is gold, around $65 billion a year, the demand and price of which also soars in times of uncertainty. Oil, gas and gold account for almost 30% of our total imports,” Agarwal stated.
“The government should exempt the sector from time-consuming regulations, including public hearings. The latter has already been done for critical minerals but needs to be done across the board for all processes and minerals. Environment clearances need to be on a self-certification basis. Once a company commits to the government’s rulebook, there should be no further process, except auditing at a later date,” Vedanta Chairman Anil Agarwal stated.