India to Purchase Extra US Oil, LNG to Keep away from Tariffs

India has agreed to spice up oil and gasoline imports from the US in an effort to cut back the commerce imbalance between the 2 international locations and keep away from retaliatory tariffs.

“I believe we bought about $15 billion in US vitality output,” India’s International Secretary Vikram Misri mentioned throughout a media briefing in Washington on Thursday, after Prime Minister Narendra Modi met President Donald Trump. “There’s a good likelihood that this determine will go up as a lot as $25 billion.”

Misri added that it was “totally potential elevated vitality purchases will contribute to impacting the deficit between India and US.”

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State-owned firms attending India’s largest annual vitality gathering this week have sounded an analogous notice, saying they’d look to purchase extra US crude and LNG. Indian Oil Corp. is in talks with Cheniere Power Inc. for a long-term LNG provide pact. Gail India Ltd has additionally revived plans to purchase a stake in a liquefaction facility within the US, Chairman Sandeep Gupta mentioned. 

Within the leaders’ joint assertion, Modi and Trump vowed to raise vitality commerce, “to ascertain the US as a number one provider of crude oil and petroleum merchandise and liquefied pure gasoline to India” and to boost investments in hydrocarbon infrastructure.

India was the highest purchaser of US crude in 2021, lifting some 406,000 barrels a day and accounting for 14.5 % of complete US exports, based on Kpler knowledge. However that determine has since dropped. Within the first 11 months of 2024, the US accounted for lower than 5 % of India’s complete imports, as processors shunned conventional suppliers in favor of Russia’s discounted barrels. 

Because the US imposed tighter sanctions on Moscow’s hydrocarbon commerce earlier this yr, the world’s third-largest oil shopper is working to rebuild disrupted provide chains in an effort to maintain discounted crude flowing. 

The US is India’s second-largest buying and selling associate after China, with a complete commerce of $82.5 billion between April and November 2024. However India’s exports stood at $52.9 billion towards a basket of imported items value $29.6 billion — a niche that will expose the nation to retaliatory tariffs from the US administration. 

India’s preliminary optimism in regards to the Trump presidency has been dampened by considerations over an impending commerce warfare and immigration insurance policies focusing on its residents. Within the hope of avoiding commerce restrictions, the federal government has supplied concessions akin to chopping import tariffs and phasing out extra levies on imports. 

Modi agreed to start negotiations to deal with the US commerce deficit, President Trump mentioned on Thursday, whereas blaming New Delhi for the excessive duties which led the US to implementing retaliatory tariffs.