As Washington tightens its stance through high tariffs and a penalty on imports from India, the country could seek to leverage the situation by offering trade arrangements such as long-term LNG contracts, increased crude oil imports, and joint ventures in solar and other renewable sources of energy to help ease the tariff burden.
Industry players and experts are of the view that India could expand its long-term LNG offtake contracts with the US while reducing the import duties on US LNG imports.
Meanwhile, as Indian refiners diversify their crude sourcing and pivot away from Russian supplies, the country could increase its imports from the US, which is already its fifth largest supplier. Indian refiners could reallocate part of their crude slate back to US barrels such as WTI Midland and Eagle Ford—provided economics justify the move.
Energy offtake gains traction
“India is already a growing offtaker of the US LNG, with long-term contracts in place with exporters like Cheniere and Freeport. While US LNG currently holds a modest share of India’s gas mix, expanding volumes or prepaying for future offtake would signal strong commercial alignment—especially as new US liquefaction projects seek demand security,” said Sumit Ritolia, Lead Research Analyst, Refining & Modeling at Kpler.
As per Kpler data, India has imported over 286,000 barrels per day of US crude in 2025, highlighting the ongoing trade potential. WTI’s light, sweet profile fits well within Indian refinery configurations and supports favorable yields of middle distillates.
Ritolia also noted that India could propose joint initiatives around Strategic Petroleum Reserves (SPRs), including technical collaboration, reciprocal storage access, or swap arrangements. “This would align with broader US energy security goals and strengthen bilateral ties,” he said.
Prashant Vasisht, Senior Vice President and Co-Group Head, Icra also pointed out that India is already scouting for LNG, hence, additional long term LNG contracts and higher purchases of US crude oil can be done.
India buys 4-5% of its crude oil imports from the US. Additionally, India imported about 19% of its LNG from the US in FY25. The US has also become the second largest supplier of LNG to the country.
India is the seventh-largest exporter of refined petroleum products, with a diverse product portfolio. The US accounted for 7% of India’s petroleum products exports in FY25, up from 6% in FY20, as per data from Rubix Data Sciences.
Solar, clean tech offer next wave of alignment
Many Indian oil and gas companies have now collaborated with the US in order to mitigate this impact. Indian firms like GAIL and Indian Oil are securing long-term US deals to support India’s goal of raising the share of gas in the energy mix to 15% by 2030.
In May 2025, BPCL announced its plans to swap Middle East LPG contracts for cheaper US supplies beginning June 2025.
Similarly, strengthening energy ties with the US, GAIL India in April 2025 invited expressions of interest to acquire up to a 26% stake in a US LNG project along with a 15-year gas sourcing agreement.
“The US, the world’s top shale gas producer, is now India’s second-largest LNG supplier, driven by abundant supply and competitive long-term contracts,” said Rubix Data Sciences in its latest report. “GAIL’s April 2025 bid to acquire a 26% stake in a US LNG project with a 15-year import deal reflects this deepening energy partnership. Between FY20 and FY25, India’s LNG imports from the US grew at a 30% CAGR by value,” the report added.
Furthermore, the US lifting its LNG export permit ban in January 2025 is a key development for India, the world’s fourth-largest LNG importer. The move enables up to 100 million tonnes of new US LNG exports annually by 2031, boosting global supply and aiding price stability, Rubix noted.
As per Kpler, India could lock in more long-term US LNG volumes to anchor US projects ahead of Final Investment Decision while ensuring gas supply diversification on its end.
India also exports as much as 97% of its solar products to the US with many Indian companies setting up manufacturing facilities in the US.
Government sources told FE that the country is pushing for negotiations with the US-India Business Council and is looking for new export destinations for solar products in the US and the Middle East owing to a slump in the solar market in Europe.
“India’s Production-Linked Incentive (PLI) scheme in solar, batteries, and electrolyzers aligns with US objectives under the Inflation Reduction Act (IRA). Joint manufacturing, tech transfer, and critical mineral supply-chain diversification could open new avenues for collaboration,” said Ritolia.
US firms have also shown growing interest in India’s renewable energy ecosystem. Experts say that co-investments in grid modernization, energy storage, and offshore wind may help rebalance trade flows and foster long-term alignment.
Ritolia highlighted that both countries can deepen cooperation under frameworks like the Quad or Indo-Pacific Economic Framework for Prosperity (IPEF) for rare earths, lithium, and battery supply chains—reducing Chinese dependency and building strategic redundancy.
