India plans to purchase more petroleum products from the US in an effort to bridge the trade deficit with America and placate President Trump who has imposed a crushing tariff on the nation’s export last month.
“We expect to increase our trade with the US on energy products in the years to come,” commerce minister Piyush Goyal said at an event in New York.
“And being close friends, natural partners, our energy security goals will have a very high element of US involvement.”
The minister is visiting the US to meet his counterparts to secure a trade deal. Even though India was an early mover in negotiation with the Trump administration, it failed to cut a deal and Trump imposed a 50 per cent tariff on two tranches partly to penalise New Delhi for continuing to buy Russian oil.
The move upended decades of US diplomacy with India and came amid favourable signs after resumption of trade talks.
The Trump administration has maintained that India is helping to fund Vladimir Putin’s war in Ukraine. India has been the second largest buyer of Russian crude after China, as the discounted barrels have helped the world’s third largest oil consumer keep its import bill in check.
Stepping up oil and gas imports from the US can help reduce the trade imbalance between the two countries and bolster the trade negotiations. The main argument behind Trump’s so-called ‘reciprocal tariff’ was to reduce deficits with trading partners.
The US goods trade deficit with India was $45.8 billion in 2024, a 5.9 percent increase ($2.6 billion) over 2023. U.S. goods exports to India in 2024 were $41.5 billion while US goods imports from India in 2024 totalled $87.3 billion.
Relations between New Delhi and Washington appear to be back on track after Trump called Prime Minister Narendra Modi on his birthday. But it ran into rough weather again after Washington slapped a $100,000 fee on a new H-1B visa used mainly by Indian tech workers.
Goyal said the US had a crucial role to play in diversifying India’s energy security goals, and ensuring stability for the import-dependent nation.
His talks over trade with the US administration is also likely to include the decision on H1B which is going to hurt Indian techies more and shake up the $280 billion IT industry.
