Union commerce and industry minister Piyush Goyal on Saturday said the interim trade agreement between India and the United States will factor in India’s rising energy requirements and help the country secure crude oil at more competitive prices.
Speaking to reporters, Goyal said India and the US have agreed to work towards increasing annual bilateral trade to $500 billion by 2030, and the government is actively working to achieve this target.
Energy imports to form key part of $500 billion trade target
He said the proposed $500 billion trade basket would include India’s energy requirements such as crude oil, LNG and LPG.
“India is the fastest-growing large economy in the world, and its energy demand is rising by around 7 per cent annually. Increasing imports and having more suppliers would help India secure crude oil at more competitive prices,” Goyal said, as quoted by news agency PTI.
Last week, India and the US announced that they had reached a framework for an interim trade agreement under which both sides will reduce import duties on several goods to boost two-way trade.
Under the framework, the US will reduce tariffs on Indian goods to 18 per cent from 50 per cent, while India will eliminate or cut import duties on all US industrial goods and a wide range of American food and agricultural products.
Diversification in strategic interest, buyers decide on sourcing
Earlier, addressing concerns about whether the trade pact influences India’s imports of Russian crude oil, Goyal had said such decisions are taken by domestic buyers and are not dictated by the trade agreement.
“The buying of crude oil, LNG, or LPG from the US is in India's strategic interest as we diversify sources. But the decisions are taken by the buyers themselves. The trade deal does not decide who will buy what and from where,” he said in an interview to news agency ANI.
On whether the agreement affects India’s approach to Russian oil imports, the minister said, “I don't deal with that,” adding that such matters fall under the purview of the ministry of external affairs.
He emphasised that free trade agreements are about ensuring preferential market access. “The trade deal ensures that the pathway to trade is smooth and ensures preferential access. FTAs are all about preferential access to your competition. So today, when we've got an 18 per cent reciprocal tariff, we have a preference over other developing nations who are usually our competition. And that's why the free trade deal becomes very attractive,” Goyal added.
Steel, coking coal and IT exports in focus
The minister also highlighted India’s growing industrial needs. He said the country currently manufactures around 140 million tonnes of steel annually and expects this to double in the coming years.
To support this expansion, India requires large quantities of coking coal, imports of which are currently worth about Rs 1.50 lakh crore and are likely to rise to Rs 3 lakh crore, he said, as per PTI.
Goyal noted that India is presently dependent on two to three countries for coking coal, and increasing the number of suppliers would ensure competitive pricing and improved supply security.
He further pointed out that the US has strengths in infrastructure, connectivity and distribution-related products, and India seeks greater access to these to expand sectors such as data centres.
India’s information technology exports currently stand at around $200 billion (Rs 18 lakh crore), he said, adding that access to advanced US equipment could help raise IT exports to nearly Rs 45 lakh crore.
Broader bilateral trade framework
The interim agreement reaffirms the commitment to a broader Bilateral Trade Agreement launched by US President Donald Trump and Prime Minister Narendra Modi on February 13, 2025.
India has indicated plans to purchase $500 billion worth of US energy products, aircraft and aircraft parts, precious metals, technology products and coking coal over the next five years under the framework.
The interim pact, while focused on reciprocal tariff reductions and market access, is also positioned as a strategic step toward diversifying supply chains, strengthening energy security, and expanding India’s export footprint across key sectors.