India is considering removing the import tax on the ethane of the United States, LNG in Commercial Talk

India evaluates the removal of import taxes on LNG (LPG) as part of the ongoing commercial negotiations with Washington. This initiative aims to strengthen fuel imports from the United States, which is in line with India’s strategy to get rid of import taxes on American LNG (LNG), Reuters said. Currently, an import tax is imposed by 2.5 % on ethane, propan and botan, which is necessary to produce cooking and petrochemical gases. In the fiscal year 2023-24, India imported 18.5 million metric tons of liquefied petroleum gas, in the first place in the Middle East, at a value of $ 10.4 billion.

India is ranked second in the largest importer of the American Ethan after China, with 65,000 barrels per day last year. However, logistical obstacles are challenges to increase American ethane imports, given the availability of low ships, storage and treatment capacity. “It will be difficult for the United States to increase ethane exports to India, where India has already strengthened the use of ethane as intermediate materials due to the current favorable margins,” she said.

Relination Industries, the main player in the petrochemical sector in India, stands as a major buyer of ethane, showing the complexities of the expansion of this trade.

India’s plans are part of a broader trade agreement aimed at strengthening bilateral trade with the United States to $ 500 billion by 2030, as it has a trade surplus of $ 45.7 billion currently for India. The final decision on these discounts will be taken by officials from the ministries of trade and finance. Despite the potential economic benefits, logistical challenges remain a great obstacle to increasing the imports of ethane in the United States in the short term.

In February, New Delhi and Washington reached a cooperation agreement in the initial stage of the Trade Agreement, which is expected to be completed by the end of this year. The goal is to strengthen bilateral trade to $ 500 billion by 2030, with a $ 45.7 billion trade surplus in India.

According to the sources within the Indian government, the final design will be made about customs tariff cuts by officials from the ministries of trade and finance. Because of the sensitive nature of the discussions, all parties requested to remain unknown.

LPG import scenario offers a more clear opportunity for India, as the nation imports about 60 % of the needs of LNG. Prashant Vashistth, Moody Vice -President of the ICRA, noted that increased LPG imports are the simplest compared to ethan. This strategy is in line with India’s goal to secure stable energy supplies while negotiating favorable trade conditions with the United States.

With the progress of commercial conversations, India continues to search for perfect strategies to balance the needs of energy import with its commercial goals. Discussions reflect a strategic intention to diversify energy sources while taking advantage of opportunities to enhance economic relations with the United States.