U.S. energy behemoths are growing interested in entering India’s gas infrastructure sector, a trend intimately tied to ongoing trade discussions between the two countries amid complex geopolitical problems such as Trump’s tariffs on Indian imports due to Russian oil purchases.
This involvement is part of a larger strategy to capitalize on India’s increasing energy market and expanding gas infrastructure.
India is actively constructing its natural gas infrastructure, including LNG terminals, pipelines, and city gas distribution networks, with the goal of increasing natural gas’s part of the national energy mix from 6% to 15% by 2030.
The country’s LNG re-gasification capacity is expected to roughly treble by 2025, aided by numerous new floating and ground-based terminals along its coasts. The national gas pipeline network is also fast expanding, with aspirations to build a gas grid spanning over 35,000 kilometers to enable wider and more inexpensive gas distribution across India. This expansion is supplemented by regulatory changes aimed at improving the transparency and efficiency of LNG terminal operations.
These developments give an opportunity for US corporations because India represents a large and expanding market for greener energy transitions such as natural gas, LNG, compressed natural gas (CNG), and gas for the industrial and transportation sectors.
With India’s high predicted demand in industries such as fertilisers, industrial production, and road transport (including a conversion from diesel to LNG for heavy trucks), US energy companies are eager to invest early to establish infrastructure and supply chain operations.
The US government’s desire for a trade agreement with India underscores this energy dimension, in which reduced trade tensions and tariffs might lead to more strong energy trade and investment cooperation.
Trump’s administration has imposed tariffs on India’s imports of discounted Russian crude oil, causing a stumbling block in negotiations, but US energy leaders see expanding infrastructure ties with India as a way to strengthen bilateral relations and support India’s energy security objectives.
India’s ambitious gas infrastructure construction, expanding natural gas consumption, which is expected to grow dramatically in the coming decade, and governmental reforms making the market more accessible are driving interest among US energy titans.
These initiatives are consistent with the United States’ objective to counteract Russian oil influence and strengthen strategic connections with India through energy cooperation, notwithstanding the complexity of current geopolitical and trade tensions.
