To assuage Trump and the US, India plans to increase the share of Western Texas Intermediate or WTI crude in the country’s import basket, which could even entail setting of a quota, three people aware of the developments said on condition of anonymity. WTI is the US benchmark for crude oil, while Brent crude is the benchmark for oil sourced from the North Sea area in Europe, largely produced by the UK and Norway.
“At present, the government’s focus is on preventing the imposition of any reciprocal tariffs on Indian goods while positioning India as a trade-friendly nation in the global geopolitical landscape, particularly with the US,” one of the persons mentioned above said.
“A strategy is being prepared for energy imports from the US,” a second person said. “It will have a major role in the talks for trade agreement and in order to get tariff concessions.” This person pointed out that the US used to be the third or fourth largest oil supplier before the Russia-Ukraine war started, and imports from the country can again be increased, even if it doesn’t emerge as the topmost supplier.
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To be sure, India has already assured the US that it would ramp up energy ties and increase imports. After Prime Minister Narendra Modi’s meeting with Trump last month in Washington, foreign secretary Vikram Misri had said that India aims to increase its purchases of US energy in the near future.
A third person aware of developments said that following that assurance, the Centre may now propose to fix certain quantum or quota of its total oil imports for sourcing crude from the US, which would be higher than the current share of supplies from the US.
Currently, the US comprises 4.53% of total oil imports to India, and is its fifth-largest supplier. Data from the ministry of commerce and industry showed that India imported 7.09 million tonnes of crude oil worth $4.95 billion from the US in April-December 2024, a 1.18% fall in volume from the same period a year ago. However, in value terms, oil imports from the US increased 7.6% from $4.61 billion in the same period last fiscal.
However, it is way behind the fourth largest supplier—the UAE, which has exported $10.87 billion worth of oil as of December in current fiscal (FY25). The top crude exporter to India was Russia, which had 36.47% share with $39.86 billion worth exports in that period.
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Meanwhile, the US is already the second largest supplier of LNG (liquefied natural gas) to India after Qatar. New LNG facilities are likely to come up in 2026, after which the supplies of the cleaner fuel are expected to increase.
Queries emailed to the Union ministries of commerce and industry, external affairs, and petroleum and natural gas remained unanswered till press time.
The Centre’s plan is part of its efforts to gather inputs from various ministries regarding their proposals for importing goods from the US and identify products on which duties can be adjusted to balance trade, as reported by Mint on 24 February.
Trump’s tariff stance
After taking office, Trump has been pushing for more of oil and gas production and looking at reducing trade deficit with countries including India, with steep tariffs on imports from other countries as a key tool for negotiations.
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He has also spoken several times on “high” tariffs or, as India calls it, ‘customs duty’ on supplies from the US and the need to impose high tariffs by the Americans. India now is in talks for a trade agreement with the US and is looking at ways to avoid these high tariffs as announced in the case of Canada, Mexico and China.
During PM Modi’s recent visit to the US, Trump said that both the countries have reached an “important” agreement on energy that would make the US one of the leading suppliers of oil and gas to India, “hopefully number one supplier”.
To be sure, imports from the US have already witnessed an uptick of late at a time when supplies from Russia, the largest supplier of crude to India, have been impacted by sanctions on several shipping lines.
An Economic Times report citing data from energy cargo tracker Vortexa said that the average crude loading for India-bound ships at US ports was 0.2 million barrels per day in February, up from 0.11 million barrels per day in January.
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Number one not likely
Analysts and people with direct knowledge of the developments, however, said that although oil imports from the US are set to rise, it is unlikely that the US would become India’s top supplier.
Prashant Vasisht, senior vice president and co-group head, corporate ratings, Icra, pointed out that despite WTI crude being lighter and easier to refine, and despite not needing significant changes in India’s refineries, oil imports from the US have been on the lower side largely because of high transportation costs. On the other hand, in the case of gas, prices are much more competitive, he said.
“However, supplies of gas would take some time, maybe by 2026, 2027 as the infrastructure in the US takes off for export of the surplus gas it has,” said Vasisht. “Few India companies have already signed for long-term contracts of LNG from the US, but that would come after 2026. We would not see immediate increase in LNG supplies, but the increase in crude supplies can take off.”
According to Global Trade Research Initiative (GTRI) founder Ajay Srivastava, the US has not clarified whether the reciprocal tariff applies to specific products or entire sectors.
GTRI founder further noted that the top 100 US export products make up 75% of India’s total imports from the country. While India’s simple average tariff stands at 17%, actual duties on key US imports are much lower. Petroleum crude attracts a minimal duty of Re 1 per tonne, while cut and polished diamonds are not taxed, as most are re-imported, he said.
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According to data from the commerce ministry, India’s total exports to the US stood at $60 billion in FY25 (April-December), while imports were recorded at $34.3 billion, resulting in a trade deficit of $25.7 billion. In FY24, India’s exports to the US were $77.5 billion, with imports at $42.2 billion, leading to a trade deficit of $35.3 billion.
