The NSE Nifty 50 index gained 1% at 16,513.0345 GMT, while the S&P BSE Sensex was up 1.2% at 55,439.18.
India reduced a windfall tax on oil producers and refiners and exempted gasoline from an export tax less than a month after imposing the two taxes.
Reliance Industries jumped 4.3%, while shares of oil producers Vedanta Ltd, Oil and Natural Gas Corp, Oil India Ltd gained between 2.8% and 7.0%.
The Nifty Energy Index gained 1.7%.