Energy cooperation is arising as a primary pillar of the Indo-US strategic partnership, which has the potential to surpass bilateral defense agreements. President Donald Trump's visit saw the conclusion of a pact to supply US gas to India.
Dharmendra Pradhan Petroleum minister described the energy relations as multifaceted, as India and the US signed an agreement to enhance cooperation between Indian Oil Corporation, Exxon and Chart Industries for the supply of liquefied natural gas.
The agreement will encourage access to gas in areas where the existing pipeline infrastructure has not been developed. Until the gas pipeline network is developed in the country, transporting gas through containers is an effective solution. Exxon and Chart have expertise in transporting gas through containers, and the contract will provide India with expertise and facilities to transport clean and efficient gas to areas yet to be connected through the pipeline network.
Pradhan tweeted after meeting Dan Brouillette US energy secretary, “We jointly reviewed the ongoing strategic energy partnership between our two countries and agreed to take it to the next level.”
“Our energy equation with the US is now a multifaceted one — the Strategic Energy Partnership, established in 2018, has provided an effective institutional structure to align our interests, expectations, and synergies. This is evident from the fact that the energy trade touched $7.7 billion last year — this intensity of energy exchange is a story of the last two years. There is much potential for further capital, technology, and innovation infusion to develop better ecosystems in both countries. We see the relations only growing more robust and one that will be capable of withstanding the test of time,” Pradhan said.
In 2019, India increased its oil consumption from the US to around 1,84,000 barrels per day, four times as much as in 2018, and from zero imports just four years ago. India's energy imports from the US are expected to reach $10 billion this year. The US trade deficit with India decreased from more than $22 billion in 2016-17 to around $17 billion in 2018-19 as India began importing oil and gas from America. In 2018-19, India's crude imports from the US amounted to $3.6 billion, while LNG imports amounted to $527.14 million.
In April-December 2019, India imported crude oil and LNG worth $3.7 billion and $576.28 million from the United States, making it the sixth largest supplier of crude oil and the fifth largest supplier of LNG to India. Presently, the US-India Energy Strategic Partnership has four pillars— oil and gas; power and energy efficiency; clean and renewable energy and sustainable growth.