India-US Energy Cooperation

India-US energy cooperation is the partnership between the two countries to trade fuels, share clean-energy technology and invest in each other's energy sectors. India is one of the world's biggest buyers of oil and gas. The United States has become one of the world's biggest producers of oil and gas. So one country needs secure supplies and the other wants big, steady buyers. This makes energy one of the most practical pillars of India-US ties.

Why does it matter for India?

India imports most of the crude oil it uses. As per government data, India's crude oil import dependence was about 88.2% in 2024-25. Think of a family that buys almost all its groceries from just a few shops. If one shop shuts, the family goes hungry. For a long time, India bought most of its oil from West Asia, and later a large share from Russia.

Buying from the US adds one more "shop", which reduces the risk of depending on a few suppliers. This is called diversification, and it is a key part of energy security: having enough energy, at a fair price, without sudden breaks in supply.

Why does it matter for the US?

The shale revolution of the 2010s made the US a top producer of oil and gas. In 2015, the US lifted its 40-year ban on exporting crude oil. Since then it has looked for large, growing markets. India's demand for energy is among the fastest growing in the world. Energy sales also help reduce the US trade deficit with India, which has been a sore point in trade talks.

Where did it come from?

The relationship has grown in steps:

• 2008: The India-US Civil Nuclear Agreement (123 Agreement) opened the door to nuclear trade.
• October 2017: India received its first cargo of US crude oil. Indian Oil Corporation bought 1.6 million barrels of US "Mars" crude, which reached Paradip port in Odisha on 2 October 2017.
• March 2018: India received its first long-term US LNG cargo. GAIL's cargo from the Sabine Pass plant in Louisiana reached the Dabhol terminal in Maharashtra under a 20-year deal of about 3.5 million tonnes a year.
• April 2018: The US-India Strategic Energy Partnership (SEP) was launched. It replaced the older US-India Energy Dialogue.
• April 2021: The partnership was relaunched as the Strategic Clean Energy Partnership (SCEP), as one of two tracks of the US-India Climate and Clean Energy Agenda 2030 Partnership.
• February 2025: After a summit meeting, both sides said they wanted the US to become a leading supplier of crude oil, petroleum products and LNG to India. India's Foreign Secretary said India's US energy purchases of about $15 billion could rise to $25 billion.
• November 2025: India's public sector oil companies (IOC, BPCL and HPCL) signed India's first structured contract to buy US LPG: about 2.2 million tonnes for 2026, roughly 10% of India's LPG imports.
• February 2026: Under the framework for an interim India-US trade deal, India indicated it would buy about $500 billion of US goods over five years, including oil, gas and coking coal.

How does the partnership work?

The Strategic Clean Energy Partnership is led by the US Department of Energy and India's Ministry of Petroleum and Natural Gas, with other ministries joining. It has five working areas, called pillars:

1. Power and energy efficiency
2. Responsible oil and gas
3. Renewable energy
4. Sustainable growth
5. Emerging fuels and technologies (like green hydrogen and biofuels)

Alongside the government talks, companies sign their own deals. Indian refiners buy US crude when its price, including shipping, is competitive. Indian gas companies sign long-term LNG contracts. Indian companies have also invested in US shale gas fields, and US firms work in India's renewable energy sector.

The key facts on the trade itself

Distance is the main hurdle. A tanker from the US Gulf Coast takes weeks longer to reach India than one from the Persian Gulf, so freight costs are higher. So the US share in India's crude imports moves up and down with prices and politics. According to official data, the US share fell to about 4.6% in 2024-25 and rose to about 8% in the first half of 2025-26. LNG and LPG have become steadier parts of the trade because they are sold under longer contracts.

India's position and examples

India's stated approach is to buy energy from wherever it is cheapest and most reliable, in its own national interest. India's big refineries make this possible. The refinery complex at Jamnagar in Gujarat can process many types of crude oil, including US grades, and exports fuels around the world. In December 2025, Parliament passed the SHANTI Act, which allows private companies to take part in nuclear power. This could open new space for US nuclear companies in India.

Commonly confused concepts

• Crude oil vs LNG vs LPG: Crude oil is unrefined oil, which refineries turn into petrol and diesel. LNG (liquefied natural gas) is natural gas cooled to about minus 162°C so that it becomes a liquid and can be shipped. LPG (liquefied petroleum gas) is mostly propane and butane, the cooking gas in home cylinders.
• Strategic Energy Partnership (2018) vs Strategic Clean Energy Partnership (2021): The SCEP is the renamed and expanded version of the SEP, with a stronger focus on clean energy.
• 123 Agreement vs SCEP: The 123 Agreement is a legal agreement only about civil nuclear trade. The SCEP is a broader dialogue on all forms of energy.
• Energy security vs energy independence: Energy security means reliable and affordable supply, even if imported. Energy independence means producing all the energy you need at home.

Issues, criticism and the way forward

• High freight costs: US oil is often costlier to bring to India than oil from West Asia or Russia, so buying more of it can raise costs for refiners.
• Trade pressure: Critics say energy purchases are being used as a bargaining chip in trade talks, rather than based purely on price. Supporters say diversifying supply is good for India in any case.
• Clean energy goals: Long LNG and oil contracts lock in fossil fuel use for many years. This sits uneasily with India's net-zero target for 2070.
• Policy changes: Sudden tariff or sanction decisions can disrupt fuel trade plans.
• Way forward: Experts suggest a balanced basket: long-term LNG deals, a mix of crude suppliers, joint work on nuclear, hydrogen and batteries, and investment in each other's energy companies.

Concepts to Know

• Energy security: Having enough energy at affordable prices, without sudden breaks in supply.
• Shale oil and gas: Oil and gas trapped in tight rock layers called shale. New drilling methods made it possible to extract them cheaply, which made the US a top producer.
• Trade deficit: When a country buys more from another country than it sells to it.
• Refinery: A plant that heats and separates crude oil into useful products like petrol, diesel, jet fuel and LPG.
• Barrel: The standard unit for oil. One barrel is about 159 litres.
• Net zero: A state where a country removes as much greenhouse gas from the air as it puts in. India's target year is 2070.