Global experts and think tank welcome the decision of the union government to raise the price of domestic natural gas from the current $4.2 per mmbtu to $8.4 per mmbtu.
IHS, a global provider of economic information and analysis, which has studied the Indian gas sector, says India will gain a lot from market-linked gas prices.
Investment in upstream energy production would get a boost from the decision and it would enhance energy security by making more fuel available for domestic needs, experts feel.
Experts argue that India's decision as well as a similar move by China, are necessary steps. Gas prices were once very high in the US, giving the incentive to try new technologies, which helped herald the shale gas revolution, which has raised supplies and cut prices, experts argue.
The possible rise in domestic production of gas will have a positive impact on the Indian economy and government receipts, as well as for the exploration companies, IHS feels.
By keeping the gas price low, Indian domestic production is expected to have declined, Tim Hemsted, Managing Director, upstream consulting at IHS said.