India eyes expanded US energy imports to diversify sources, balance trade
Paris: India is exploring increased imports of American shale gas, liquefied natural gas, and crude oil to diversify its energy sources and leverage competitive US pricing, a senior official said as both countries prepare for fresh bilateral trade negotiations.
The strategy comes as India seeks to balance its growing trade surplus with the United States while capitalising on America's energy abundance and relatively lower prices compared to traditional suppliers.
"There are several things we can buy from the US - for example, shale gas, LNG, crude oil," said the official, who requested anonymity. "The more diversified our sources, the greater the benefit for us. Prices are also low in the US."
The energy diversification plan aligns with India's broader goal of reducing dependence on traditional suppliers while taking advantage of America's shale revolution, which has transformed the US into a major energy exporter.
India's energy imports from the US could help address the bilateral trade imbalance, where India maintains a significant surplus.
The US remained India's largest trading partner for the fourth consecutive year in 2024-25, with bilateral trade valued at USD 131.84 billion.
Negotiating teams from both countries will begin the next round of discussions this week in Paris on the proposed bilateral trade agreement.
However, officials acknowledge significant uncertainties stemming from the Trump administration's trade policies.
The official cited concerns about potential increased tariffs on steel and ongoing legal challenges to US tariff decisions.
"A lot of uncertainties are there at present," the official said, referring to developments including court orders affecting US tariff policies.
Despite these challenges, India remains committed to finding mutually beneficial pathways.
"Within the constraints of uncertainties, India has to find pathways which are good for the country," the official stated.
The bilateral trade framework announced in February by President Donald Trump and Prime Minister Narendra Modi aims to negotiate the first phase of a comprehensive trade agreement by fall 2025.
The ambitious goal seeks to more than double bilateral trade to USD 500 billion by 2030 from the current USD 191 billion.
Currently, the US accounts for approximately 18 per cent of India's total goods exports, 6.22 per cent of imports, and 10.73 per cent of the country's total merchandise trade, making it a crucial economic partner.
India has already reserved its right to impose retaliatory tariffs against US duties on steel and aluminium and has sought World Trade Organization consultations on US tariffs affecting auto components. When asked about potential similar measures on additional products, the official emphasized India's commitment to protecting its interests.
"We will see what is good for India... accordingly we will take decisions," the official said, noting the current climate of uncertainty affecting trade policy decisions.
While India seeks a "balanced and mutually beneficial trade agreement," officials acknowledge that final terms will depend on comparative advantages.
"What we get as compared to other countries will determine what we ultimately finalise in the deal," the official explained.
The energy import expansion represents one concrete area where both countries could benefit - India gains supply diversification and competitive pricing, while the US expands its export market and helps reduce the trade deficit.
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