India’s refining rise: From oil importer to global fuel supplier

India’s transformation into a major refining power represents one of the most significant developments in the global downstream energy landscape over the past three decades. For decades, the country’s energy story was defined by dependence: a rapidly growing economy with limited domestic crude production and heavy reliance on imports. Today, that narrative is changing. India is emerging as one of the world’s most important processors and exporters of refined petroleum products.

Just three decades ago, India’s refining sector was largely inward-looking, focused primarily on meeting domestic shortages rather than competing in global markets. The transformation began with economic liberalisation in the 1990s and accelerated with the development of large, export-oriented refineries such as the Jamnagar complex. Since then, India has evolved from a country that was periodically dependent on imported refined fuels to supplement domestic supply into one of the world’s largest exporters of petroleum products, supplying markets across Asia, Africa, Europe, and the Middle East.

The scale of this transformation is considerable. India currently has approximately 258 million tonnes per annum (MMTPA) of refining capacity, equivalent to around 5.2 million barrels per day (bpd). This makes India the world’s third-largest refining hub after the United States and China. Government and industry plans envisage expanding refining capacity to approximately 300 MMTPA by the end of the decade, although several major projects remain subject to investment decisions, financing, and implementation timelines. Even with these uncertainties, India’s refining footprint is expected to continue expanding, strengthening its position in global fuel markets.

The importance of India’s refining sector is not measured only by domestic consumption. It is increasingly reflected in its export performance. According to data from the Petroleum Planning & Analysis Cell (PPAC), India exported approximately 64.7 million tonnes of petroleum products in FY2024–25, equivalent to more than one million barrels per day. The country ships gasoline, diesel, aviation turbine fuel, fuel oil, and petrochemical feedstocks to markets across Asia, Africa, Europe, and the Middle East. Maritime intelligence firm Kpler reported that India’s fuel exports reached a record 1.28 million bpd in 2025.

The significance of India’s refining sector becomes even clearer when exports are measured relative to total production rather than simply to installed capacity. Indian refineries typically operate at utilisation rates of around 100-105 per cent of nameplate capacity through operational optimisation, producing approximately 250-270 million tonnes of petroleum products annually. Of this output, roughly one-quarter — around 64-65 million tonnes — is exported. This makes India one of the world’s most export-oriented major refining centres.

This export orientation gives India a distinctive position in global energy markets. The United States exports larger absolute volumes of refined products, but its enormous domestic market absorbs much of its refining output. China has built one of the world’s largest refining systems, but refined product exports are managed through State-controlled quota mechanisms and are closely linked to domestic industrial policy. India occupies a different position: it combines a massive and rapidly growing domestic market with a refining sector capable of consistently supplying international consumers.

India’s competitiveness has also been strengthened by changes in global crude markets. Following Russia’s invasion of Ukraine in 2022, Indian refiners substantially increased purchases of discounted Russian crude. While operating within prevailing international sanctions frameworks governing maritime trade and price restrictions, Indian refiners benefited from access to lower-cost feedstock, improving refinery margins and enhancing the competitiveness of exported petroleum products. This helped India expand its role as a supplier of diesel, gasoline, aviation fuel, and other products during a period of significant disruption in global energy markets.

India’s export capability changes its role in the global energy system. Unlike traditional oil powers that derive influence from controlling crude reserves, India’s influence increasingly comes from its ability to transform crude sourced from multiple countries into products required by global consumers. Indian refiners can process crude from the Middle East, Russia, Africa, and the Americas, allowing them to optimise procurement according to price, quality, and market conditions.

A key source of India’s competitive advantage is not only scale but also technological sophistication. Many Indian refineries rank among the most complex in the world, with high refining complexity that allows them to process a wide range of crude grades, including heavier and more challenging feedstocks. This flexibility enables refiners to maximise production of higher-value products such as transportation fuels, petrochemical feedstocks, and speciality products. In a volatile global oil market, the ability to adapt crude inputs and optimise output has become a major strategic advantage.

This creates a distinct competitive position. The United States remains the world’s largest refining power, supported by abundant domestic crude production, extensive pipeline networks, and deeply integrated energy infrastructure. China has built one of the world’s largest refining systems through sustained state-backed investment in refining and petrochemicals. Gulf producers, including Saudi Arabia and the United Arab Emirates, are also moving further downstream, investing in large export-oriented refineries to capture more value from their hydrocarbon resources.

India’s model is different. The country has emerged as a global-scale refining power without being a major crude producer while simultaneously developing one of the world’s most export-oriented downstream sectors. Its competitive advantage lies in the combination of a vast domestic market, strategic geography, sophisticated refining capabilities, high operational utilisation, modern port infrastructure, and the ability to connect suppliers and consumers across multiple regions.

The Jamnagar refining complex operated by Reliance Industries exemplifies this transformation. With a refining capacity of approximately 1.24 million barrels per day, it is the world’s largest refining complex and has played a central role in establishing India as a major exporter of transportation fuels and petrochemical products.

It is also significant that successive US administrations have generally accepted India’s expanding role as a supplier of refined petroleum products to global markets, including Europe, even as India increased purchases of Russian crude after 2022. Under prevailing sanctions frameworks, refined products processed in India continued to reach international markets, providing European consumers with an additional source of fuel supplies at a time when energy security had become a central concern. For the United States, India’s emergence as a major refining hub has broadly aligned with wider strategic objectives by increasing flexibility in global energy markets and reinforcing India’s role as a key partner in the Indo-Pacific.

The episode underscores a broader shift in global energy power. Influence is no longer determined solely by control over crude oil reserves; it increasingly rests with countries that possess the infrastructure and capability to process, store, and redistribute energy at scale.

The India–UAE crude storage partnership further demonstrates how major producers increasingly view India not only as a consumer market but also as a strategic energy platform. By placing crude inventories in India, producers gain closer access to Asian demand centres, while India gains greater supply flexibility, improved energy security, and deeper strategic relationships with major producers.

The combination of refining capacity, strategic petroleum storage, ports, and export infrastructure creates a new form of energy influence. This strategic value becomes even clearer during periods of geopolitical disruption, particularly around the Strait of Hormuz. Any disruption to Gulf shipping routes would affect not only crude availability but also refined product flows across Asia. Countries with flexible refining systems, diversified crude sourcing, and sophisticated logistics networks are better positioned to manage volatility.

India’s expanding refining footprint provides precisely that flexibility. The country can diversify crude sourcing, adjust refinery operations, and continue supplying both domestic and international markets. Its role as a major exporter of refined products gives India influence well beyond its own borders, particularly among energy-importing economies across South Asia, Africa, and the wider Indo-Pacific.

This represents a fundamental shift in India’s global energy position. The country is moving from being a vulnerable buyer of crude to becoming an increasingly important participant in the global energy value chain. Producers are seeking deeper access to India’s market, while consumers are increasingly relying on India’s refining capacity.

The future of energy influence will not be determined solely by who controls the largest oil reserves. It will also be shaped by who controls the infrastructure that transforms raw resources into the fuels, chemicals, and products that modern economies require. India has spent three decades building that infrastructure — and continues to expand it. In doing so, it is emerging not simply as one of the world’s largest oil consumers, but as one of the world’s most consequential refining and fuel-exporting powers.

Rupak Chattopadhyay has served as President and CEO of the Forum of Federations since 2011; Views presented are personal.