India aims to bolster energy trade and economic bonds with the US as PM Narendra Modi readies for talks with President Donald Trump. Discussions, slated for February 13, will focus on enhancing trade ties, including tariff cuts, advancing energy and defense cooperation, and addressing economic concerns. The visit holds weight as reciprocal tariffs are anticipated, with PM Modi engaging with US business leaders like Elon Musk. Both countries seek to deepen collaboration across sectors, emphasizing mutual growth and strengthening commercial engagement.
As Prime Minister Narendra Modi prepares for his upcoming meeting with US President Donald Trump, India is exploring the possibility of boosting energy imports from the United States. Scheduled for February 13, the discussions between PM Modi and President Trump are poised to revolve around enhancing trade relations, including tariff reductions, increased energy and defence cooperation, and addressing longstanding economic issues.
The visit holds significant importance as President Trump plans to unveil reciprocal tariffs, with an announcement expected just before PM Modi's arrival in Washington DC. Additionally, PM Modi is scheduled to engage with prominent US business leaders, including Tesla CEO Elon Musk.
Indian officials from the Ministry of Petroleum and executives of state-run oil and gas companies are actively considering the country's current energy imports from the US and the potential for substantial growth in this sector. The US stands as the world's largest oil and gas producer and a leading exporter of liquefied natural gas (LNG). It ranks as India's fifth-largest crude supplier and provides about 5% of total imports, trailing behind Russia, Iraq, Saudi Arabia, and the UAE. Additionally, the US supplies roughly 30% of India's long-term contracted LNG from abroad.
Industry insiders emphasize that Indian refiners prioritize cost-effective crude purchases, regardless of the source. This strategic approach was evident in India's shift towards Russian oil, which became more competitively priced following Western sanctions on Moscow in 2022.
Addressing the challenges, an industry executive highlighted the differences in pricing mechanisms between Russia, the Middle East, and the US, emphasizing the hurdles in securing government-driven crude deals with the US. Logistical constraints also pose challenges, as US crude must be competitively priced to offset shipping expenses. Similar concerns apply to LNG imports, with Indian buyers facing difficulties in acquiring additional long-term US gas contracts at present.
Furthermore, discussions between PM Modi and President Trump are expected to focus on trade and tariff-related matters, with a particular emphasis on reducing import duties. India has taken steps to align with Trump's trade priorities, such as reducing customs duties on luxury imports in the Union Budget 2025-26. These reductions benefit American manufacturers like Harley-Davidson and companies in the electric vehicle sector, including Tesla.
India remains open to negotiating a limited trade agreement with Washington to address market access concerns and strengthen economic ties. With bilateral trade exceeding $118 billion in 2023-24, both countries are eager to enhance their commercial engagement.
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n addition to trade talks, PM Modi's visit is set to reinforce India's commitment to procuring US-made defence equipment and expanding cooperation in nuclear energy, particularly in small modular reactors. The collaboration is expected to attract US firms and pave the way for their involvement in large-scale power projects in India.
India and the US have seen robust trade relations, with the trade volume reaching a record 118.2billioninFY24.Indiamaintainedatradesurplusof118.2 billion in FY24. India maintained a trade surplus of 118.2 billion in FY24. India maintained a trade surplus of 36.8 billion during this period, underlining the strong economic ties between the two nations.
As immigration policies will also be discussed during the visit, PM Modi is expected to advocate for the continuation and expansion of the H-1B visa program, crucial for India's IT workforce. The discussions aim to address US concerns over undocumented Indian migrants and ensure the continuity of skilled foreign workers in the US tech sector.
PM Modi's upcoming meeting with President Trump signifies a positive step towards strengthening energy trade, economic cooperation, and bilateral relations between India and the US. The discussions are expected to pave the way for enhanced collaboration in various sectors, benefiting both nations in the long run.
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