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OPINION:
In a landmark move that may well redefine the future of U.S.-India trade relations and global energy geopolitics, Vice President J.D. Vance announced a new trade deal with India. The day after he met with Indian Prime Minister Narendra Modi on April 21, Mr. Vance said the two countries had “officially finalized the terms of reference for the trade negotiation.”
The deal, initiated against the backdrop of President Trump’s tariff threats, could be a masterstroke of economic diplomacy. Mr. Trump’s announcement of a 90-day pause on reciprocal tariffs, which could have raised duties on Indian exports, gave India a window to negotiate.
The energy economics of this deal and its potential to reshape the global market for fossil fuels are fascinating. In his announcement, Mr. Vance declared, “We want to sell more energy to India and also help it explore its resources, including offshore natural gas reserves and critical mineral supplies.”
The arrangement could propel India toward its long-standing goal of energy surplus. This feat appeared daunting, perhaps impossible, against the nation’s projections for a massive increase in demand, the fastest-growing among major economies for the next two decades.
Let’s get it straight: India has a long way to go before it even contemplates reducing its consumption of hydrocarbons. Even a middle-class Indian like me residing in a major city experiences power blackouts regularly, which is precisely why the nation has postponed net-zero ambitions to a distant 2070. Even the documents for the country’s participation in the nutty United Nations Paris Agreement prioritize domestic energy security over international climate diplomacy.
India’s reliance on imported energy, which includes more than 85% of its crude oil and roughly 50% of its natural gas, poses a strategic vulnerability. The government aims to more than double natural gas’ share of the energy mix to 15% by 2030. U.S. liquefied natural gas suppliers have surpassed the United Arab Emirates to become India’s second-largest LNG supplier, trailing only Qatar.
A key player in this unfolding saga is GAIL Ltd., India’s state-owned natural gas company. On April 11, GAIL issued a tender to procure 1 million metric tons per annum of LNG from an existing or new U.S. LNG liquefaction project, with operations commencing by 2030. The agreement, potentially extendable by five to 10 years, signals India’s commitment to U.S. supplies.
GAIL had to stall a similar process in 2023 to buy a stake in a U.S. LNG plant after President Biden banned export permits for LNG projects. The ban was lifted only after the Trump administration returned to the White House.
The timing of the upcoming deal is notable, strengthening India’s position as a counterweight to China. The Quad alliance — comprising the U.S., India, Japan and Australia — gains heft as India bolsters its energy security and economic clout.
As Mr. Vance emphasized, the U.S. willingness to share technology and expertise could enhance Indian autonomy, reducing reliance on adversarial suppliers. This alignment is particularly crucial as China intensifies its trade outreach in Southeast Asia and seeks to blunt the effect of U.S. tariffs.
The Western media will decry the expansion of fossil fuel trading as a climate catastrophe, as though that would resonate with a serious person. The U.S.-India deal wisely eschews climate moralizing and embraces a symbiotic truth: America’s shale boom and India’s hunger for energy perfectly match.
This deal reaffirms energy sovereignty. Perhaps it marks the beginning of a global recalibration, in which nations rediscover the courage to assert their right to energy abundance and economic self-determination without apologizing to the corrupt and decrepit climate cartel of Brussels, Davos and U.N. corridors.
May the new world order feature developing nations standing for their futures and rejecting the false campaign of planetary salvation.
• Vijay Jayaraj is a science and research associate at the CO2 Coalition in Fairfax, Virginia. He holds a master’s degree in environmental sciences from the University of East Anglia and a postgraduate degree in energy management from Robert Gordon University, both in Britain, and a bachelor’s in engineering from Anna University, India.
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