India wants to diversify its sources of crude oil and coking coal and the trade deal with the US would help in that endeavour, Commerce and Industry Minister Piyush Goyal said Wednesday.
“India is dependent on 2-3 geographies for coking coal and prices keep fluctuating. I would love to have American coking coal which is high quality,” he said at the Global Economic Cooperation Summit in Mumbai.
Energy Security
Of the 50% additional tariffs that the US had imposed, 25% that were for buying Russian have been removed. The remaining reciprocal tariffs of 25% are yet to be brought down to 18% for which US Presidential order is awaited.
After the onset of the Ukraine conflict India increased oil purchases from Russia. In April-December the share of Russia on crude oil imports was 31%, the highest among all sources. The US wants India to stop buying Russian oil to put pressure on Russia to negotiate the end to the conflict.
While announcing the deal resident Donald Trump had said that India had agreed to stop buying Russian oil. Foreign Secretary Vikram Misri had also said last week that national interest would be the guiding factor in India’s choices
Fueling the Future
The trade deal with the US that brought down additional tariffs on Indian goods to18% from 50% also involves India buying $ 500 billion worth of energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over next five years.
The US can provide certain goods that India needs desperately for growth, Goyal said, listing Graphics Processing Units (GPUs) for Artificial Intelligence applications, equipment for data centres and high performance computing.
The products that India can make the US cannot compete but America can be a good source of technology and capital. He said there is already $ 100 billion in aircraft demand from the US in the next five years and the country needs more to increase local capacity and bring down fares.
More aircraft would also take care of the idle capacity at airports. More than half the airports in the country have no flights, he added.
The deal also opens up a huge market for India in labour oriented goods and technology services. “It opens up doors for getting the best of equipment from America to India. Which will help power our IT companies.”
He also termed as ridiculous the stock market response to the likely im[pact of AI on Indian IT services companies. “These are the companies who will be required for AI to flourish,” the minister said.
While the deal has been agreed to and joint statement issues, both countries are working on the legal agreement that will finalise the contours of the deal finalised on 2nd February and announced on February 7.
Goyal said once the legal agreement not a single farmer would have a cause of complaint.