The deal for acquisition of 40% stake of oil explorer Cairn India by London-based mining group Vedanta Resources got delayed due to a disagreement over the royalty payments to the state of Rajasthan. While clearing the deal, the CCEA imposed the condition that Cairn India must agree to cost recovery of the royalty that partner ONGC is paying on their joint venture?s Rajasthan crude oil output. The CCEA also imposed the condition that Cairn must drop the arbitration proceedings it has initiated against the government on its alleged liability to pay the Oil Industry Development Act cess of R2,500 per tonne of oil produced. Cairn and Vedanta agreed to these conditions and re-worked the deal, which forced Cairn to forgo the R50 per share non-compete fee, that was part of the original offer, leading to a 5.3% reduction in post-tax proceeds. ONGC, on its part, initially considered a counter-offer for Cairn India, but eventually decided not to make it.