India Surges Energy Purchases from US Despite Tariff Threats
In an intriguing twist amid escalating trade tensions, India has significantly increased its energy imports from the United States, even as US President Donald Trump threatens high tariffs on Indian goods. Since President Trump's inauguration in January 2025, New Delhi has expanded its crude oil and liquefied natural gas (LNG) purchases from America, signaling a pragmatic approach to energy security over political friction.
Remarkable Growth in US Energy Imports
Official data highlighted by The Hindustan Times reveals a substantial 51% surge in crude oil imports from the US during the first half of 2025 compared to the previous year. Moreover, India's LNG imports from America nearly doubled — jumping from $1.41 billion in FY2023-24 to $2.46 billion in FY2024-25. This dramatic increase underscores India’s strategic pivot toward diversifying its energy sources amid broader geopolitical realignments.
High-Level Energy Commitments Cement Trade Ties
This upswing in energy trade closely followed a pivotal agreement signed in February 2025 between Prime Minister Narendra Modi and President Trump. During Modi’s visit to the US, both leaders committed to expanding energy collaboration as a cornerstone of strengthening bilateral ties.
Under this accord, India pledged to raise American energy imports from $15 billion to $25 billion by 2026. Furthermore, both nations aim to more than double overall bilateral trade from $200 billion to $500 billion by 2030 — a colossal economic leap propelled by energy cooperation.
Indian Companies Embrace the American Energy Boom
- Data shows Indian energy imports from the US soared 114% to $3.7 billion in the first quarter of FY 2025-26 compared to the prior year.
- July 2025 alone saw a 23% month-over-month increase in crude oil imports from the US, with American crude accounting for 8% of India’s total oil imports—up from just 3% earlier.
- Senior Experts, including ICRA’s Prashant Vashisht, remark that buying LNG from the US is now an ‘attractive proposition’ for many Indian enterprises thanks to competitive pricing and supply stability.
Policy Shifts Enable Growth in LNG Trade
President Trump’s decision to reverse former President Biden’s freeze on LNG export licenses accelerated this trend. The US Energy Information Administration forecasts a doubling of North America’s LNG export capacity by 2028, positioning America at the forefront of global LNG supply — a development India is eager to capitalize on.
India’s Energy Demand: A Global Game Changer
India’s growing energy appetite couldn’t be more timely. The International Energy Agency anticipates India will surpass China as the primary driver of global oil demand growth by 2030. LNG consumption is projected to surge 78% to 64 billion cubic meters annually, spotlighting India’s critical role in shaping future energy markets.
Balancing Politics and Pragmatism
India’s expanding energy imports amid tariff threats present a fascinating case of economic pragmatism prevailing over political posturing. While trade rhetoric heats up, strategic energy partnerships continue to deepen — highlighting a nuanced bilateral relationship that blends competition with cooperation.
Editor’s Note
This unfolding dynamic prompts several critical questions: Will energy trade provide a stabilizing anchor in US-India relations amidst tariff uncertainties? How will this reshape global energy geopolitics, especially given India’s emerging dominance in demand? And finally, can this cooperation pave the way for broader economic collaboration beyond energy?
As India and the US navigate these complex waters, one thing is clear: energy ties are fast becoming a cornerstone of bilateral engagement, reflecting a sophisticated balance between national interests and global economic interdependence.
