In a breakthrough in the trade talks, which are still underway, India has now indicated its readiness to increase oil imports of the U.S. by another 14-15 billion a year, as a way to jumpstart trade negotiations and decrease bilateral tensions
Trade Strategy, Diversification in energy.
According to India Trade Secretary Rajesh Agrawal, although the nation already brings in the same value of energy of about 1213 billion dollars a year of energy imports into the country, the current refinery capacity has the capacity to take in an extra 1415 billion dollars of imports
This drive to augment energy imports by the U.S. is part of a two-pronged policy:
1. Reduction of India trade surplus with the U.S. which currently has become a big thorn in the bilateral relations particularly with the tariffs imposed by Washington.
2. Reducing energy dependence on conventional suppliers, especially Russia and the Middle East crude to improve strategic flexibility.
A high-ranking official in the ministry of commerce described the move as an element of the positive posture of the New Delhi in the trade negotiations to achieve a win-win with Washington
Trade Talks Heating Up
The bid comes amidst a fresh move in trade negotiations between India and the U.S, which had been frozen due to tariff increases earlier this year
An Indian negotiating team is already in the U.S. to negotiate tariff- and trade-related barriers and Commerce Secretary Rajesh Agrawal will also attend
Analysts take the offer of the oil purchase as an effort to cut the trade surplus of India that was almost 42.7 billion in FY25
Feasibility & Constraints
Although the purpose is bold, there are still but a few hurdles:
Refinery compatibility: India asserts that with its current refinery configuration, India could handle the proposed increment without significantly reconfiguring it.
Cost and pricing: The growth depends on the right price and availability such that U.S. crude should be competitive in terms of economics as compared to the world standards.
Market realities: Crude grades in the U.S. could vary in terms of quality and refinery suitability in India and transport costs/ logistics could impact on the margins.
Diplomatic touch: The proposal can be interpreted by the U.S. as a concession under pressure, due to its concern over the fact that India maintains Russian oil dependence
Recent Precedents
India has already started to do so. In August 2025, the Bharat Petroleum (BPCL) was found to have a five-month tender of 10 million barrels of oil in the U.S., which pointed towards greater institutional readiness
Besides, Indian pronouncements regarding its commitments in the past have talked of increasing its U.S. energy buying up to about 25 billion dollars in the medium run, up also to $10 billion
Implications & Outlook
If executed, this pivot could:
Relax trade pressure by reducing the surplus of India with the U.S.
Improve the strategic relationship between the two countries particularly on energy security
Assist American exports and Washington has some leverage in the ongoing tariff and trade talks
The Geopolitical energy dynamics of Shift India, which decreases reliance on Russia and the Middle East.
However, it will always rely on achieving win-win pricing, logistics, and buy-in. With trade talks further shifting towards a potential deal in the near future, every interested observer will be keeping an eye on the extent to which this energy gambit will offset differences and strengthen economic relationships
