Mint Quick Edit | An LPG deal could pacify Trump and help reset India-US trade dynamics

1 month ago 3

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LPG imports from the US would not just brighten the prospects of a broad trade deal with the US, but also lower our reliance on West Asia for gas supplies. (AFP)

Summary

India’s deal with the US for LPG supplies may look modest on paper, but it could play an outsized role in reviving the bilateral trade relationship. If so, a potentially larger energy import bill would be a price worth paying.

Even as India’s exports to the US fell in October, as revealed by trade data issued by the government on Monday, Union petroleum and natural gas minister Hardeep Singh Puri announced the signing of a one-year agreement for the import of 2.2 million tonnes of liquefied petroleum gas (LPG) from America.

This opens up one of the world’s largest LPG markets to the US, Puri said. The contract’s size may not be big, but it’s still significant in diversifying India’s imports and helping correct the trade surplus that India has with the US. Washington would want such purchases to rise, as also of other goods.

To be sure, LPG imports from the US may not necessarily be the most cost efficient, given the high logistical burden associated with shipping stuff across such large distances. But if it helps pacify Washington’s trade complaints, New Delhi should do so. It would not just brighten the prospects of a broad trade deal with the US, but also lower our reliance on West Asia for gas supplies.

Meanwhile, India’s exports to the US dipped to $6.3 billion in October from a year earlier but were up 14.5% from September. For bilateral relations to flourish, our trade must expand, not diminish.

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