indica News Bureau –
The spurt in India’s oil and gas imports from the US will help bring down trade imbalances, boost bilateral ties and instill confidence in Washington that New Delhi is keen to address its trade deficit issues, a senior government official said.
India, which imported oil and gas worth over $3 billion from the US in 2018, is seeking more oil from the latter to help narrow its $28 billion trade surplus amid increasing worries of possible collateral damage to its economy due to President Donald Trump’s trade spat with China.
According to analysts, India intends to double the share of natural gas in its energy basket to 15 percent by 2022.
“It (gas and oil) is a completely new import on India’s part from the US and will directly result in bringing down America’s trade deficit with us,” the official, unwilling to be named, said.
Trump has been complaining about the trade deficit that the US has with India ever since it came to power and had also asked New Delhi to investigate the reasons behind it.
The US also imposed penal duties on Indian steel and aluminum on grounds of security concerns.
India, which imports more than 80 percent of its crude oil requirement, sourced nearly 12 million barrels of crude oil from the US in the last six months.
US Energy Secretary Rick Perry, who had visited India earlier this year, had said that India’s 37 billion cubic feet of natural gas purchases over the past couple of years will help correct trade imbalances with India.
Amidst all this, India will continue to import oil from Iran, as there is no correlation between India’s purchase from its Islamic neighbor and the US, the official clarified.
When the US introduced tough sanctions against Iran last month, it gave a six-month waiver from sanctions to eight nations, including India, and allowed them to import some Iranian oil.
According to data obtained from shipping and trade sources, India imported about 276,000 bpd of Iranian oil in November – a fall of about 41 percent from October and about 4 percent more than the year-ago month.
Due to US sanctions, India is restricted to buying 1.25 million tonnes per month, or about 300,000 barrels per day (bpd) from Iran.
The waiver from sanctions given by the US to continue purchase of oil from Iran will be reviewed in six months.
“We will have to see what the US has to say at the end of six months. But the fact remains that our national and economic interest will keep guiding our decisions,” the official said.
Officials from the two countries are due to meet in the coming weeks to discuss trade issues, including a tariff on steel products by Washington and changes in New Delhi’s e-commerce policy and other measures to reduce the trade gap.
Sources said the talks were expected to bridge the difference between the two countries and work out possible agreeable solutions before the next meeting of the India-US Commercial Dialogue.