Page 39 - Policy Economic Report - September 2026

POLICY AND ECONOMIC
OIL & GAS MARKET

Waste-to-Gas Opportunity

Municipal waste and sewage-treatment biomass could further expand India's CBG potential. Around 62
MMT of municipal solid waste could generate nearly 5 MMT of CBG, although only around 50–55 per cent
of urban wet and food waste is biodegradable and therefore suitable for biogas production. Sewage-
treatment plant biomass represents another significant resource, with approximately 50 MMT of
feedstock potentially generating nearly 10 MMT of CBG annually. In addition, around 20 MMT of press
mud from sugar mills could generate approximately 2 MMT of CBG. Press mud has an operational
advantage because it can generally be sourced from a single location and does not require pre-treatment.

The scale of this resource base also has implications for India's natural gas supply and energy security.
According to the report, the Petroleum and Natural Gas Regulatory Board estimates that the country's
472 MMT feedstock base could support around 230 MMSCMD of biogas. Greater utilisation of domestic
organic waste for CBG production could therefore contribute to substituting a portion of conventional
natural gas demand, while simultaneously creating a productive use for agricultural, animal and municipal
waste.

10. Indian shares extend decline as higher oil prices and bond yields raise external risks

Indian equity markets remained under pressure on 29 September 2026, with benchmark indices
extending their recent decline as elevated crude oil prices and rising US Treasury yields heightened
concerns over inflation, capital outflows and corporate profitability. The Nifty 50 fell 0.28 per cent to
22,716.2, while the BSE Sensex declined 0.33 per cent to 72,529.07. The Nifty has declined around 5.7 per
cent during September and nearly 6 per cent over the preceding seven weeks.

The pressure on Indian markets has intensified amid renewed uncertainty surrounding the Middle East
conflict and energy supplies. Brent crude was trading around US$105 per barrel, while the US 10-year
Treasury yield rose above 5.27 per cent, its highest level in 19 years. Higher global bond yields increase
the relative attractiveness of dollar-denominated assets and can reduce the appeal of emerging-market
equities, particularly when combined with elevated energy prices.

The increase in crude prices is particularly significant for India given its high dependence on imported oil.
Higher international oil prices can increase the country's import bill and place pressure on the current
account, inflation and the Indian rupee, while also raising input costs for businesses and potentially
compressing corporate profit margins. Reuters noted that India's reliance on imported crude makes its
financial markets particularly sensitive to sustained increases in global energy prices.

Foreign portfolio flows have also come under pressure. Foreign institutional investors sold
approximately ?5,353 crore (US$558 million) of Indian equities on 28 September, their highest single-day
outflow in four weeks. Net foreign portfolio investor selling during September had reached
around US$2.17 billion by 29 September. This followed two consecutive months of net buying,
highlighting the sensitivity of portfolio flows to changes in global yields and risk perceptions.

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