Indian petroleum product exports escape Trump's reciprocal tariffs

The baseline 10 per cent tariff on all imports to the US -- and higher for many major trading partners-- will not apply to crude oil, natural gas, and refined products, the White House said on Wednesday. It will save India's oil and petroleum exports to the US, valued at $5.8 billion in financial year 2023-24 (FY24), from being burdened with import duties.

 

The US is India’s largest exporter, with total outbound trade reaching $60 billion in the April-December period of FY25. Within this, refined petroleum exports stood at $3.15 billion. The US was the fourth-largest destination for Indian petroleum in the first nine months of FY25. The top three spots were taken by Netherlands ($10.89 billion), UAE ($ 4.74 billion) and Singapore ($3.83 billion).

 

The majority of petrochemical exports to the US comprised specialised light oils. This refers to petroleum oils and those obtained from bituminous minerals, other than crude. In FY25, other light oils and preparations ($2.5 billion), petrol ($538.2 million), and other petroleum oils ($105 million) made up the entirety of sectoral export to the US.

 

India exported 26.25 million barrels of refined products to the US in 2024, down from 39.5 million in 2023, according to the US Energy Information Administration. No crude oil was exported last year.

 

Petroleum ministry officials said the latest exemption is not expected to significantly alter existing exports to the US. “It’s a time of flux and trade patterns are changing. But we do not expect to see a major uptake of Indian (energy products) by the US in the short term," an official said. India doesn’t feature in the top 15 sources of crude oil or refined petroleum products for the US, a list which is dominated by Canada. Mexico and Saudi Arabia are also significant contributors to US energy imports.

 

On the other hand, the government is facing pressure from Washington to ramp up buying of US liquified natural gas. During Prime Minister Narendra Modi's US visit in February, India had committed to raise its purchase of US energy to $25 billion. While the Presidential administration of Donald Trump is keen on India negotiating term contracts with US producers, both Indian oil marketing companies (OMCs) and gas importers had earlier said they are still weighing their options.