State-run Oil and Natural Gas Corporation (ONGC), India’s largest oil and gas explorer, has begun asking Indian bidders to quote in Indian rupees for procurement tenders, including contracts related to hiring offshore support vessels and other exploration-linked services, according to multiple sources. The move is aimed at reducing foreign exchange outflow as the government pushes public sector firms to adopt measures that conserve dollar reserves.
According to sources, ONGC has made it mandatory for Indian companies participating in procurement tenders to submit bids in rupees rather than U.S. dollars. While bidders can still specify the foreign exchange component involved in imported equipment or services, payments will be made in rupees subject to verification.
“Indian bidders are now required to quote in rupees in all procurement tenders floated by ONGC. If there is a foreign component in the proposal, it has to be disclosed separately, but the quoted currency has to be Indian rupees,” a government source said.
The change is not limited to vessel hiring contracts and has reportedly been extended to other procurement categories as well. However, foreign companies awarded contracts by ONGC will continue to receive payments in U.S. dollars.
Shipping industry executives described the move as a logical step in line with the government’s broader focus on conserving foreign exchange reserves. Industry observers noted that ONGC spends hundreds of millions of dollars annually on hiring drilling rigs and offshore support vessels used for exploration activities.
The development comes at a time when Prime Minister Narendra Modi has urged citizens and industries to reduce unnecessary foreign exchange outflows amid economic pressures arising from the ongoing conflict involving Iran. The Prime Minister recently appealed for judicious use of fuel, avoiding non-essential foreign travel and limiting gold imports to help conserve foreign currency reserves.
According to ET Infra, the shift towards rupee-denominated procurement could also influence other state-owned firms involved in shipping and EXIM logistics to seek rupee-based quotations from Indian entities for ship hiring and logistics contracts.
The global shipping industry has traditionally relied on U.S. dollar-denominated charter contracts because of the international nature of maritime trade. However, Indian policymakers are increasingly encouraging domestic shipping and shipbuilding to reduce dependence on foreign carriers and curb foreign exchange outflows.
At an event in Bhavnagar, Gujarat, in September 2025, Prime Minister Modi highlighted that India pays nearly Rs 6 lakh crore (around USD 75 billion) annually to foreign shipping companies as freight because only about 5 percent of the country’s export-import cargo is transported on Indian-owned ships.
The government views this dependence on foreign carriers as both an economic and strategic concern. As part of efforts to strengthen maritime self-reliance, some shipbuilding tenders floated by Shipping Corporation of India have already sought rupee-denominated fixed-price offers from domestic shipyards.
