India’s Oil Strategy Clear: Buy Where It’s Cheaper And Non-Sanctioned, Says Government

India will continue sourcing crude oil from wherever it is most affordable and of the best quality, senior government officials told a Parliamentary Standing Committee this week, underlining a pragmatic and geopolitically aware approach to energy security. 

The assurance came during a detailed three-hour meeting of the Parliamentary Standing Committee on External Affairs, chaired by Congress leader Shashi Tharoor, reported PTI, citing sources.

Officials from the Ministries of External Affairs and Commerce briefed members that Indian oil companies would take purchasing decisions based on prevailing geopolitical conditions and ensure that supplies come from non-sanctioned sources.

Energy Security First: Cheap and Best Quality Oil

The report further noted that the government made it clear that cost and quality would remain central to India’s crude procurement strategy. Oil marketing companies, they indicated, would continue to evaluate global developments carefully before striking deals.

With shifting global alliances and periodic sanctions in different parts of the world, India’s stance reflects a balance between economic prudence and diplomatic caution. Officials also conveyed that Indian companies are now in a position to purchase oil from the United States and Venezuela, following the lifting of energy-related sanctions in Venezuela after a regime change.

The emphasis, the report said, was on securing reliable supplies without breaching international restrictions.

After the session, Shashi Tharoor described the interaction as highly productive. Speaking to reporters, he noted that 28 out of the 30 committee members were present, calling it one of the most effective meetings he had chaired.

He said officials responded comprehensively and confidently to every question raised by members. The discussion, he indicated, demonstrated how parliamentary committees can meaningfully engage with complex foreign policy and trade matters.

Foreign Secretary Vikram Misri was among those who addressed the MPs.

Trade Deals Dominate the Agenda

Much of the deliberation centred on the proposed interim India-US trade agreement and the India-European Union Free Trade Agreement (FTA).

Tharoor indicated that members received detailed briefings on the progress of negotiations, including discussions around agricultural products and Russian oil. While the finer details of the interim agreement with the United States are yet to be disclosed, officials suggested that it could be finalised by the middle of next month. However, Tharoor reminded reporters that confidentiality rules limit what can be publicly shared at this stage.

He also acknowledged that trade has increasingly become a strategic tool in global commerce, referring to the US decision to impose an 18 per cent reciprocal tariff on Indian products under the new framework.

Tariff Numbers and Strategic Gains

Before the interim arrangement, Indian goods faced a 25 per cent tariff in the US, with an additional 25 per cent duty linked to India’s purchase of Russian oil, taking the total to 50 per cent. Under the current understanding, that combined rate has been reduced to 18 per cent.

Tharoor highlighted that India is among the countries receiving one of the lowest tariff rates. He pointed out that European Union products will face a 15 per cent tariff, while goods from the United Kingdom will face a 10 per cent tariff in exchange for zero tariffs on US goods.

While India is expected to allow tariff-free access for certain American products, the reciprocal 18 per cent tariff will apply to Indian exports to the US under the proposed structure.

The $500 Billion Question

The committee also examined the ambitious plan to scale up imports from the US to $500 billion over five years.

Tharoor clarified that while the figure was discussed in depth, it should not be viewed as a rigid commitment. Currently, India imports around USD 42 billion worth of goods from the US. Officials suggested that doubling this level would not be difficult, and efforts would be made to progressively move towards the broader $500 billion target.

He emphasised that there would be no punitive consequences if the number is not achieved, describing it more as an aspirational objective than a binding obligation.

The meeting also touched upon India’s relations with Bangladesh. Tharoor said the government remains engaged with stakeholders in the neighbouring country. He added that once the election results are announced in Bangladesh, the committee plans to invite the foreign secretary for a more focused discussion.