India is considering eliminating its 2.5% import tax on U.S. liquefied natural gas (LNG) to boost purchases and reduce its
45.4 billion trade surplus with the U.S., a key priority for President Donald Trump, according to government and industry sources. The move aligns with Prime Minister Narendra Modi’s pledge during his June U.S. visit to increase energy imports to 25 billion annually and target $500 billion in bilateral trade by 2030.
Key Details:
Tax Relief Proposal: India may replicate its zero-tax model with UAE and Australia to make U.S. LNG more competitive, addressing Trump’s concerns over trade imbalances.
China Factor: Beijing’s new 15% tariff on U.S. LNG could redirect supplies to India, where LNG demand is projected to double by 2030 (IEA).
Current Imports: India bought 20–25% of its 27–28 million tons of LNG from the U.S. this fiscal year, driven by GAIL’s long-term deals for 5.8 million tons annually.
Strategic Shifts:
GAIL’s Expansion: The state-run firm plans to invest in U.S. LNG projects after Washington lifted export permit bans, part of Trump’s energy push.
Diversified Imports: India eyes increased U.S. purchases of petrochemicals, ethane, and propane alongside LNG to meet soaring energy needs.
Broader Context:
India’s oil ministry has urged companies to prioritize U.S. energy imports, leveraging tax cuts to counter China’s trade diversion and strengthen geopolitical ties.