India’s plan to buy crude oil, LNG and LPG from the United States is driven by strategic energy diversification rather than any obligation under the proposed bilateral trade agreement, Commerce and Industry Minister Piyush Goyal said on Sunday, underlining that purchasing decisions will continue to rest with Indian companies.
“The buying of crude oil or LNG, LPG from the US is in India’s own strategic interests as we diversify our oil sources. But the decisions are taken by the buyers, by the companies themselves. So, the trade deal doesn’t discuss who will buy what and from where,” Goyal said in an interview with ANI. He added that the purpose of the trade agreement was to ensure a smooth pathway for trade and provide preferential market access, rather than dictate sourcing choices.
Preferential Edge
Goyal said free trade agreements were fundamentally about gaining an edge over competitors. “FTAs are all about preferential access vis-a-vis your competition. So, today when we got an 18% reciprocal tariff, we have a preference over other developing nations who are usually our competition,” he said, adding that such tariff treatment makes trade agreements attractive and beneficial for long-term growth.
Addressing broader political questions around the negotiations, Goyal dismissed suggestions of any trust deficit between New Delhi and Washington. “I don’t think there’s any trust deficit between the United States of America and India or between our leaders,” he told ANI, adding that the agreement would “cement the US-India long-term strategic goals into outcomes”.
He said trade negotiations were complex and time-consuming, involving line-by-line discussions running into thousands of clauses. “You have to crystal gaze into the future. You have to understand both sides’ strengths and weaknesses… It’s a very intense work. Takes long patient study, understanding and negotiation,” he said, reiterating his view that talks should proceed with “speed, not haste”.
Goyal also ruled out any linkage between trade talks and differences over issues such as Russian oil purchases or defence cooperation, stressing that trade negotiations were independent of foreign policy or defence considerations.
Aviation and Coking Coal
In a separate interview with PTI, Goyal said India would have no difficulty in purchasing goods worth $500 billion from the US over five years, calling the figure extremely conservative for a country aspiring to become a $30 trillion economy. “My sense is we need at least a $100 billion plus only for the aviation sector, in addition to oil, LNG, LPG, and crude oil,” he said.
He said that Indian goods facing an 18% reciprocal tariff would still enjoy a competitive advantage over products from China and other Asian competitors, which face higher levies. China, he said, is subject to tariffs of 35%, while several other Asian economies face duties of 19% or more.
At present, India imports about $40-50 billion worth of goods annually from the US, but Goyal said the country already sources around $300 billion of imports from other countries that could potentially be sourced from the American market. With India’s overall imports expected to rise sharply alongside economic growth, demand for energy, aircraft, machinery, semiconductor chips and data centre equipment is set to increase.
He pointed to existing aircraft orders, including about $50 billion worth of purchases from Boeing, and said demand for engines, spare parts and coking coal for the expanding steel industry would add to imports. Purchases from the US, he said, would largely be a continuation and expansion of existing trade flows rather than something entirely new.