India's Biogas Bet Gets A Push, But Feedstock, State Policy Hurdles Remain

By Shubhangi Bhatia

What? 

Eight years after India first invited private investors to build compressed biogas (CBG) plants, the sector has plenty of registrations and very little gas produced.

The Rs 23,731 crore GOBARdhan scheme is the government's attempt to change that. It mandates buyers and sets a price for CBG, whereas the earlier policy offered purchase agreements that did not translate into steady offtake.

As of August 6, 2026, government data shows 1,908 CBG plants registered across the country. Only 217 of them, about 11%, have been commissioned, and together they produce roughly 0.4 million standard cubic metres a day.

“There has been a significant gap with respect to the number of operational plants to registered plants,” Shobhit Srivastava, programme officer at the Centre for Science and Environment, told The Core.

Why? 

India imports about half of the natural gas it consumes, a dependence that raises energy security concerns, especially given the ongoing West Asia crisis. CBG offers a way to reduce that dependence.

Produced by the anaerobic digestion of organic materials such as cattle dung, agricultural residue, food waste and municipal waste, it has properties comparable to those of CNG and can be used as its substitute.

CBG can be injected into city gas and natural gas pipelines. It also yields organic fertiliser, cuts methane emissions and has the potential to create rural jobs.

Developers had trouble securing feedstock, raising finance, finding assured buyers, meeting quality norms, moving the gas and keeping plants running near capacity.

“CBG projects need heavy upfront spending and take a long time to pay back, so policy stability matters just as much,” Dr KR Kaushik, former deputy director general of the Association of City Gas Distribution Entities, told The Core.

Why Does It Matter? 

The GOBARdhan scheme aims to work on both supply and demand. On supply, it offers capital assistance, credit guarantee support, and pipeline infrastructure. It also sets an administered price of Rs 2,110 per million British thermal unit, or about Rs 105 per kg of CBG.

On the demand side, city gas distributors are bound by a blending obligation. The obligation now rises to 3% in FY27, 4% in FY28 and 5% from FY29.

But whether the government can achieve its target of a tenfold expansion in CBG production still depends on feedstock aggregation, state-level regulations, and on-ground execution, where the scheme helps only partially.

“Beyond the plant, aggregation logistics remain very much a local-level problem,” Srivastava

With price and demand now locked in, the test for CBG has moved from the policy table to the on-ground execution.

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5.5%

That’s the new repo rate set by the Reserve Bank of India (RBI), after its Monetary Policy Committee unanimously raised the benchmark interest rate by 25 basis points on Wednesday.

The RBI also shifted its policy stance from “neutral” to “calibrated tightening”, signalling that it is prepared to raise rates further if inflationary pressures persist. 

It raised its FY27 inflation forecast to 5.2% from 5%, while upgrading its GDP growth forecast to 7.1% from 6.7%.

Context: Inflation has become a bigger concern for the central bank, with higher oil and commodity prices, supply disruptions and monsoon risks adding to price pressures.

How We Got Here: “The decision ... reflects a precautionary response to an increasingly challenging inflation environment,” said Dipti Deshpande, senior director and principal economist at Crisil. She expects another 25-basis-point hike in December.

Madhavi Arora, chief economist at Emkay Global Financial Services, said the new stance could prepare markets for a “higher-for-longer” interest rate environment. In other words, borrowing costs could stay elevated for longer, making loans such as home and personal loans more expensive.

Deepak Agrawal, CIO-Debt at Kotak Mahindra AMC, expects another 25-50 basis points of tightening in this cycle.

IATA Backs MoCA Intervention

The International Air Transport Association (IATA) has welcomed the Ministry of Civil Aviation’s intervention in the redevelopment of Mumbai airport’s Terminal 1, after the ministry asked MIAL to defer its current transition proposal and re-engage with airlines.

Flashpoint: IATA said in a statement that any reduction in airport capacity should be backed by a transparent demand-capacity assessment, meaningful consultation and sufficient time to develop workable transition arrangements.

Context: The development comes amid concerns over MIAL’s plan to shift or reduce international flights as it prepares to begin phased T1 redevelopment from January 2027. IATA said the latest intervention offers an opportunity to reassess capacity requirements, examine alternatives, and agree on a transition plan that minimises disruption to airlines, passengers, and Mumbai’s international connectivity.

Titan Jewellery Demand Slows

Titan shares fell 3.8% on Wednesday, their biggest intraday decline since May 11, after the company's September-quarter update showed a sharp slowdown in jewellery growth, as reported by Reuters.

Background: Titan's jewellery business grew 21% year on year in the second quarter of FY27, down from 39% growth in the previous quarter.

Watches grew 30%, while the eyecare business grew 28%.

The slowdown comes as gold prices remain elevated, a trend that has previously affected demand for higher-carat jewellery.

High gold prices have also raised concerns around jewellery demand, with brokerages flagging the potential for consumers to defer purchases or reduce volumes.

However, analysts have largely viewed the latest update as a temporary moderation rather than a structural weakness in Titan's consumer businesses.

The Shift: Analysts attributed the slowdown largely to a shift in the festive calendar and a high base from a year earlier, reported by Reuters.

Festival-related purchases that typically improve sales were pushed to later in the year, delaying some consumer spending and softening demand toward the end of the September quarter.

India Turns to Venezuelan Oil

India’s Venezuelan oil imports are set to more than double to about 465,000 barrels a day in October, their highest level in nearly seven years, as steep discounts draw refiners including Reliance Industries. The increase comes as Russian crude becomes costlier and Indian refiners cut purchases amid the risk of further US sanctions, according to Bloomberg.

Highlight: All Venezuelan cargoes currently headed for India list Sikka as their destination, serving Reliance’s Jamnagar refinery, which is equipped to process the country’s heavy, high-sulfur Merey crude. Venezuela’s Merey crude is trading at a discount to Russian Urals, helping offset higher shipping costs despite its heavier, high-sulfur composition.

By The Numbers: Kpler expects actual October imports closer to 350,000 barrels a day, as some cargoes may arrive later. Venezuela has become increasingly important to India’s crude diversification since purchases resumed in February. According to Reuters, in March, Reliance Industries bought at least 6 million barrels of Russian oil.

SEBI Vs Jane Street

SEBI is pressing Jane Street to respond to allegations that the US trading firm manipulated the Bank Nifty, after the firm sought access to more documents from the regulator’s investigation, Bloomberg reported.

The Lead: The Securities and Exchange Board of India (SEBI) told the Securities Appellate Tribunal on Wednesday that it had shared the trade data underpinning its allegations, including the timing, quantity and pricing of trades, along with more than 10 GB of documents. Jane Street has sought additional records, including communications between SEBI and the NSE, arguing that it needs them to defend itself.

Setup: SEBI alleges that Jane Street manipulated the Bank Nifty by buying stocks while taking large positions in derivatives, then profiting when the index moved. It estimated the firm made Rs 4,844 crore in unlawful gains. Jane Street denies the allegations, saying its trades were legitimate index arbitrage. Its lawyers argue that the data does not show that its trades consistently moved the Bank Nifty in its favour.

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