Qatari Amir's visit comes even as India's natural gas usage falls

Besides, the US has also offered to sell India natural gas, a move that would certainly cut into current supplies from the West Asian nation

The rare honour Prime Minister Narendra Modi accorded to the Amir of Qatar H H Sheikh Tamim Bin Hamad Al-Thani by receiving him at the airport on Monday will, among other things, possibly help smoothen the natural gas supply creases between the two countries. Qatar supplies almost 50 per cent of the gas India imports, yet there are question marks over the reliability of the supply chain.     

Those wrinkles have come into sharp relief after the United States made a pitch for India to buy a larger amount of natural gas from it. Given that the West Asian nation is the world's largest producer of natural gas, it ha reason to be worried over the US' gambit.   

However, India government officials insist the arrival of Hamad Al-Thani is not connected with the announcements India and the US have made. The decision for the India visit is not a sudden one, an official aware of the developments said. Plans for the Qatari Amir to make an India visit has been in the works since December 2024, as a follow-up to Modi's visit to the country in May last year. It was decided then that the Amir would visit New Delhi soon.   

The timing, though, is significant. India’s Foreign Secretary Vikram Misri has said oil and gas purchases from the US could reach $25 billion every year from the $15 billion in FY24. A sizeable part of this could be natural gas. The US is already the fifth largest crude supplier to India, one of the fastest and biggest growing markets for energy products globally. 

In an interview, Arvinder Singh Sawhney, chairman of the country’s largest fuel retailer Indian Oil Corporation (IOC), has said he is “more than happy to have more US LNG (liquified natural gas) coming to India. If it goes up from 20 per cent to 30-35 per cent, it will give us flexibility in sourcing”. 

If that switch happens, Qatar would be the obvious loser. India imported $8.32 billion of natural gas from Qatar in FY23. While India plans to ramp up usage of natural gas to 15 per cent of its energy mix, that is a long haul. Current usage has remained around 6 per cent, a reduction from 8 per cent a decade ago. Naturally, any immediate preference for US gas could leave Doha short-changed. 

This is despite the long term contracts the West Asian nation has signed with Petronet LNG, the country’s largest importer of the fuel, in February 2024. The deal is to import 7.5 million tonnes (MT) of gas for 20 years and was a response to the galloping price of natural gas in global markets following the Russia-Ukraine war. Europe had pivoted to West Asia for all of its gas demand as it turned off one spigot after the other from Russia. Even now, prices of natural gas are high, having risen 131.36 per cent compared to last winter. 

A government official said given the circumstances, there is little India can do to raise demand for gas from Qatar, Modi’s unusual airport visit to receive the Amir notwithstanding. Instead, New Delhi has offered larger investment avenues in sectors like logistics, advanced manufacturing, and food security as well as usual suspects like usage of AI, innovation and sustainability. The Confederation of Indian Industry (CII) and the department for Promotion of Industry and Internal Trade (DPIIT) are co-hosting a session to bring together industry leaders to explore investment opportunities, technological collaboration, and economic partnerships at the India-Qatar Joint Business Forum to coincide with the visit.   

Compared to India’s deep collaborations with UAE, Qatar has lagged considerably. The Qatar Investment Authority, that nation's sovereign wealth fund, has only a shallow presence in the Indian markets. In comparison, UAE investment into India through Abu Dhabi Investment Authority and other similar vehicles has reached $19 billion. India’s commerce minister Piyush Goyal said last year that investments from UAE would reach $100 billion, albeit without specifying a date. Qatar may need to show a comparable level of ambition, something from which it has shied away for long.