For several weeks, the India–US trade negotiations have appeared slow, with no major announcements, timelines, or visible breakthroughs. However, recent changes in India’s energy sourcing strategy indicate that the situation is evolving behind the scenes — and possibly faster than it seems.

India’s Oil Mix Begins to Shift

India’s crude procurement pattern shows the earliest signs of realignment. Russian oil — once the central point of friction between New Delhi and Washington — has dropped significantly. According to tanker-tracking data, India imported around 9.48 lakh barrels per day (bpd) from Russia in November, which is nearly half of October’s volume.

Refiners say they are modifying their sourcing strategies, particularly for export-oriented units, after the most recent US sanctions hit major Russian suppliers, raising fears of disruptions. Analysts familiar with the negotiations suggest that these energy adjustments are smoothing the way for the broader India–US trade deal.

Costly Yet Strategic: India’s Crude Pivot

Higher Import Bill but Lower Political Risk

This shift away from Russian oil comes at a high cost. Energy analytics firm Kpler estimates that replacing Russian barrels may push India’s annual oil import bill higher by $3–5 billion, and under stressed supply conditions, the additional cost could surge to $7–11 billion.

Although Russian crude had been sold at a discount, the real savings were more modest than perceived. A CLSA report suggests India benefitted by around $2.5 billion annually due to these discounted purchases. Losing this advantage is significant for a nation that depends on imports for nearly 88% of its crude.

Yet, with global sanctions tightening and volatility in Russian supply increasing, New Delhi seems willing to absorb the additional cost to secure more predictable long-term energy flows.

Growing Energy Ties With the United States

Long-Term LPG Contract Signals Stronger Strategic Alignment

India has finalized a long-duration contract to import 2.2 million tonnes of LPG from the US Gulf Coast beginning in 2026. This accounts for nearly 10% of India’s yearly LPG imports, making it the most structured LPG deal India has signed with the US.

Meanwhile, US crude shipments to India rose sharply, touching around 5.4 lakh bpd in October, the highest in nearly three years. Each of these developments underscores India’s effort to diversify energy sources and reduce over-dependence on any one supplier.

Washington Takes Notice

Despite escalating tariffs earlier in the year — with the United States raising duties on certain Indian exports to as high as 50% — Washington simultaneously issued more than 200 agricultural exemptions, signalling that it never intended to shut the door on negotiations.

On India’s side, New Delhi has safeguarded politically sensitive sectors while showing selective flexibility. Although the exchanges may appear confrontational publicly, the underlying trend clearly indicates structured, calibrated pressure rather than a collapse in discussions.

Is a Breakthrough Coming? India Signals Cautious Optimism

Union Commerce Minister Piyush Goyal has maintained a consistent message, stating that talks are “going on very well” and “some good news” can be expected once both countries agree to a balanced framework.

Goyal has intentionally avoided giving a timeline, likely to prevent expectations from hardening. In recent weeks, US rhetoric has also eased, reflecting a more pragmatic tone following India’s visible shifts in energy policy.

Goyal reinforced India’s stance recently, saying the United States “sees India as a trusted partner” and emphasized that the agreement will be revealed only when it is “fair, equitable and balanced.”

A senior government official echoed the sentiment, telling Reuters that India had “avoided the worst impact of the 50% US tariffs” and noted that New Delhi was “ready to wait” if required.

Trade Numbers Offer Reassurance

Data supports this confidence. India’s exports to the US fell 8.6% year-on-year in October, which is smaller than the 12% drop in September. Some product categories even showed signs of recovery — a promising trend despite tariff-related uncertainty.

Backchannel Talks Intensify

While formal negotiation rounds appear quiet, real progress is occurring in technical working groups. Officials from both sides are holding frequent meetings to resolve:

• Customs procedures

• Product certification standards

• Digital rules and data governance

• Services-related issues

Longstanding friction points remain.

India wants:

• easier mobility rules for skilled professionals

• predictable visa frameworks

The US wants:

• clearer digital regulations

• improved IP protections

• market-access guarantees

Additionally, agriculture continues to be highly sensitive in both countries, and Indian MSMEs fear abrupt tariff shifts.

Energy Realignment Driving Trade Momentum

A New Strategic Equation

The steep decline in Russian crude imports removes a major obstacle for Washington. At the same time, India’s long-term US LPG contract and rising American crude purchases strengthen its argument that it is genuinely diversifying.

These developments lower the political cost of moving toward a comprehensive deal.

The coming months will be crucial. If Russian oil shipments remain low through early 2026, it will reinforce the perception that India’s pivot is long-term and not reactionary.

Despite appearing stalled, the India–US trade agreement is quietly evolving behind the scenes, with energy cooperation leading the way and tariff discussions catching up.

Conclusion

India and the United States may appear to be negotiating slowly, but significant behind-the-scenes progress suggests momentum is building. India’s sharp reduction in Russian crude purchases, its new structured LPG contract with the US, and rising American crude imports collectively signal a strategic realignment. These shifts help reduce friction with Washington and open new negotiating space on trade, digital rules, and market access. As both sides continue technical discussions, the contours of a mutually acceptable agreement are steadily taking shape. The energy sector has moved first — and now, tariffs, services, and regulatory frameworks seem to be following. If current trends continue, 2026 could mark a breakthrough moment in India–US economic relations.