India plans to increase US oil and LNG imports from $15 billion to $25 billion to enhance energy security, diversify supply from volatile regions, and boost bilateral trade. This strategy supports its energy transition by ensuring stable hydrocarbon sources while promoting renewable development and reducing dependency on traditional, risk-prone suppliers.
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India plans to increase its US oil and natural gas procurement from $15 billion to $25 billion amid tariff threats, according to the Foreign Secretary.
Energy Security
As the world's third-largest oil consumer and importer, India depends heavily on imports to meet over 85% of its crude oil needs.
Securing a stable and diverse supply of hydrocarbons is crucial for the nation's energy security.
Purchasing more oil from the US adds another major, long-term source to India's energy mix, reducing dependence on any single region.
Diversification of Supply
India is actively seeking to diversify its sources to mitigate risks associated with geopolitical instability and price volatility in any single region.
Over-reliance on a single region for energy makes a country vulnerable to geopolitical disruptions. Diversifying suppliers across different continents reduces this vulnerability.
Sourcing oil from multiple regions can offer some protection against price fluctuations linked to specific regional events, it provides options and flexibility.
Strengthening Bilateral Trade
Increasing energy purchases will help India to achieve the ambitious goal of bilateral trade to $500 billion. This also helps to balance the trade deficit that the US currently has with India.
LNG Requirements
India is also focused on increasing its natural gas consumption as part of its energy transition. The US is emerging as a major supplier of Liquefied Natural Gas (LNG). Increasing LNG imports from the US is a key component of strengthening energy ties and diversifying gas sources.
Historically, India has primarily sourced oil from West Asia.
Following the Russia-Ukraine conflict and following sanctions, Russia became a major oil supplier to India, offering discounted prices. By 2024, Russia accounted for a portion (around 40%) of India's crude oil imports.
The US is now a growing supplier. In February 2025, US crude exports to India reached approximately 357,000 barrels per day, compared to 221,000 bpd the previous year.
India is also exploring new oil sources in the Western Hemisphere, including Brazil, Argentina, Suriname, Canada, and Guyana.
Reducing import dependency through domestic oil and gas production, and promoting renewables like solar and wind power.
Encouraging alternative fuels like ethanol, compressed biogas, and biodiesel, and developing infrastructure for electric vehicles (EVs).
Securing hydrocarbon supplies to meet current energy demands and fuel economic growth during the transition period
The decision to increase oil and gas purchases from the US is a strategic move driven by the need to enhance energy security, diversify import sources, and strengthen trade relations.
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