India's energy trade with US facing price, transport challenges

India is facing hurdles in expanding energy trade with the US because of price and transport challenges and competition from Russia and nations of West Asia.

- S DINAKAR

Crude oil purchases are facing hurdles, LNG imports are crashing, and potential LPG purchases are falling hostage to tariff and geopolitics, according to industry sources and ship tracking data.

Jacking up purchases of US energy would have placed India in a better bargaining position, as it seeks to close the first phase of a trade deal with the US by early July, when a 26 per cent reciprocal tariff may be reinstated by the Trump administration.

"I am confident that in the coming days India will be able to conclude mutually beneficial trade deals with the US and other countries," said Commerce Minister Piyush Goyal at an industry event this week. A favourable deal involves not only tariff reductions for US products, but measures taken to improve sourcing of US energy products led by coal, oil, and LNG, a demand made by US President Donald Trump.

The share of US LNG in India's overall LNG trade declined by more than half in the January-May period of 2025 to 9 per cent from 19 per cent in calendar 2024, according to calculations based on data from Paris-based market intelligence agency Kpler.

Market leader Qatar boosted its share by 7 percentage points on the year to 49 per cent. India's overall LNG imports at 10.4 million tons declined by 5 per cent in the first five months of this year, buffeted by high prices, but purchases of the fuel from the US crashed by 37 per cent during the period, Kpler data showed.