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RIYADH: Indian shares rose more than 1 percent to a six-week high on Wednesday, as oil producers and refiners surged after the government slashed windfall taxes on local crude sales and fuel exports.

The NSE Nifty 50 index gained 1.2 percent to 16,537, as of 0458 GMT, while the S&P BSE Sensex was up 1.3 percent at 55,459.14. Both the indexes hit their highest since June 6.

India cuts windfall tax on local crude sales, fuel exports

India cut the windfall tax on oil producers and refiners and exempted gasoline from an export levy, less than a month after it imposed the two charges.

Shares rose in oil companies that will benefit from the move. Reliance Industries jumped 4.3 percent, Oil India 8.8 percent, Oil and Natural Gas Corp. 6.8 percent and Vedanta 4.3 percent.

The government said in a statement an export tax of 6 rupees a liter no longer applied to gasoline. It had also reduced duty on diesel and aviation-fuel exports by 2 rupees a liter to 10 rupees and 4 rupees a liter, respectively, it said.

A windfall tax on domestically produced crude oil was cut to 17,000 rupees a ton from 23,250 rupees.

Removal of the charge on gasoline will particularly benefit Reliance’s 704,000-barrel-per-day export-focused refinery at Jamnagar in Gujarat state.

All changes took effect on July 20.

On July 1, India imposed the windfall tax on crude oil producers and levies on exports of gasoline, diesel and aviation fuel after private refiners turned to overseas sales to gain from robust refining margins instead of selling at lower-than-market rates in the country. 

India to invest overseas, seek long-term deals in push for fertilizer

India plans to secure fertilizer supplies and hedge against price rises by expanding its footprint in mineral-rich countries through investments and multi-year import deals, fertilizer minister Mansukh Mandaviya said on Wednesday.

The world’s second biggest producer of wheat and rice relies mostly on annual import deals and spot purchases to meet rising demand for fertilizers from its agriculture sector, which accounts for 15 percent of an economy of more than $3 trillion.

“We have to take our relationship with fertilizer suppliers beyond just being buyer and seller,” Mandaviya told Reuters in an interview. 

He added: “We want to have a strategic partnership with them through investment in their assets.”

Indian firms are looking to buy stakes in phosphoric acid mines in Senegal and diammonium phosphate mines in Saudi Arabia and similar assets in Africa and Canada, he added.

The fertilizer subsidy could rise to a record 2.5 trillion rupees in the current fiscal year to March 31, Mandaviya added.

“Our priority is to get fertilizers and raw materials at lower prices to secure our food security and timely availability to our farmers,” he said.

He said government-to-government talks would help Indian firms in finalizing long-term deals for import of fertilizers and raw material.

“We want to sign as many long-term deals as we can,” Mandaviya said. 

He further stated: “Our aim is to cut the role of mediator and traders and go for spot purchases only if they give us a price advantage.”