India to raise energy imports under interim trade deal with US, up coking coal supplies

New Delhi: India is set to increase its energy imports, including coking coal, from the US, as the two countries agree on an interim trade agreement framework.

The joint statement released early Saturday said India intends to purchase $500 billion worth of products from the US over the next five years, which includes energy products and coking coal.

Mint earlier reported that India will increase the import of coking coal from the US as part of the trade deal. The statement, however did not give further details on the energy products to be imported by India. India has already been making efforts to increase the import of crude oil, liquefied natural gas (LNG), liquefied petroleum gas (LPG) from the world's largest economy in the past couple of years.

"India intends to purchase $500 billion of U.S. energy products, aircraft and aircraft parts, precious metals, technology products, and coking coal over the next 5 years," the joint statement said. Taking to social media platform X, union minister for commerce and industry Piyush Goyal said that the agreement woul open a $30 trillion market for Indian exporters.

India is the largest buyer of US coal globally. Coking or metallurgical coal accounted for more than 40% of the total 20 million tonnes (mt) of coal imported by India from the US in FY25. According to data from the union ministry of coal, during the ongoing financial year (FY26), as of November, the US has already supplied 6.04 mt of coking coal.

The demand for coking coal grows as India is the world's second largest steel manufacturer with a capacity of about 205 million tonnes per annum (mtpa) and the government aims to take it to 300 mtpa by 2030-31 and 500 mtpa by 2047. The development also comes days after India notified coking coal as a critical mineral.

Recently, addressing the Indian Energy Week, Vikram Dev Dutt, secretary in the ministry of coal, had said that India sees potential for importing more coal from the US, as the country is looking at increasing its steel manufacturing capacity. Representatives of both the countries held discussions on the same during the 4-day event (27-30 January), Reuters reported on 29 January, citing Dutt.

One of the key components of the energy basket which India is looking at increase supplies from the US is crude oil as both the countries last year committed to increase a bilateral energy trade of $20 billion.

Amid the US pressure to stop buying oil from Russia, although there seems to be no immediate halt to import of Russian oil, Indian refiners are looking at raising the supplies from the US. Data from global ship tracking firm Kpler showed that in January, India imported around 297,000 barrels per day from the US, compared to 293,000 barrels per day a year ago. It reached a high of 568,000 bpd in November.

Amid India's oil import diversification efforts, oil from the US is emerging as the primary beneficiary, potentially accounting for up to 10% of India’s crude intake, largely displacing lighter West African grades rather than Russian supply.

Experts suggest that that although imports from the US are likely to increase, there may not be a significant increase from the current levels, as Indian refiners would require recalibration for increased intake of the West Texas Intermediate.

India imports nearly 90% of its crude oil requirements, making it highly vulnerable to supply-chain volatility, which can significantly affect the country’s energy security, fuel inflation, and current account deficit. An increase of about $1 per barrel may increase India's oil import bill by ₹13,000 crore. In FY25, India imported crude oil worth $167 billion.