According to the Mongolian National Television News on October 22, 2021, under the framework of Mongolia India economic cooperation, Mongolia began implementing a refinery construction project, originally scheduled to be put into operation in 2024. However, due to factors such as exchange rate fluctuations, rising import material prices, and poor road infrastructure in Mongolia, the estimated construction period will be postponed to 2027 for operation. According to statistics, the average annual crude oil mining output of Mongolia at first was 1.2 million tons, but now it has dropped to 530,000 tons, while the designed production capacity of the refinery is 1.5 million tons, and the existing capacity is not enough to ensure the stable production of the refinery. Therefore, in order to increase the oil mining output, Mongolia needs to negotiate with India to increase investment and strengthen the construction of roads, cables, pipelines and other infrastructure.

Minister of Industry and Mineral Resources of Mongolia, Tuwang, recently stated that Mongolia will sign a loan contract with the Export Import Bank of India to increase the amount of 430 million US dollars to ensure the continued progress of the project. It is reported that after the completion of the refinery, the annual output of refined oil is expected to account for 55% of its domestic market share, which will effectively alleviate Mongolia's dependence on imported refined oil and reduce domestic refined oil prices.

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