Prime Minister Narendra Modi means business and on the very first day of his week-long visit to the United States on Saturday, he got straight down to it and met with CEO’s of energy giants such as ExxonMobil, Perot Group, Baker Hughes, BP, Cheniere Energy, Dominion Energy in a round table conference, indicating India’s serious focus towards energy security.
After the meeting, India’s State-run Petronet LNG Ltd announced that it plans to source around 5 million tonnes per annum (mtpa) Liquefied Natural Gas (LNG) from US developer Tellurian Inc’s Driftwood project in Louisiana. One of the largest deal in US’s history, the Memorandum of Understanding(MoU) was signed between the two companies in the presence of PM Modi. Interestingly, Petronet is India’s largest LNG importer and after the deal, it will be able to deliver clean, low-cost, and reliable natural gas to India from Driftwood.
Fluctuating oil prices pose a danger to India’s economic growth constantly as it is dependent on imports for 84% of its oil needs and in this case, ensuring energy security so that the Indian import bill is not affected and economy is not hit during turbulent times. India has been pushing for a gas-based economy and plans to connect 10 million households to piped natural gas by 2020 and the increased natural gas use will enable India to fuel its impressive economic growth to achieve Prime Minister Modi’s goal of a $5 trillion economy. According to analysts, India’s gas demand is expected to be driven by the fertilizer, power, city gas distribution and steel sectors.
Unites States: Prime Minister Narendra Modi holds round table meeting with oil sector CEOs in Houston. pic.twitter.com/D8918ndGkW
— ANI (@ANI) September 21, 2019
The fact that Petronet has announced an equity investment in a Texas-based LNG company, it showcases that India is no longer a lone receiver of the aides when it comes to the bilateral relations. This step also sets the ground for Modi to tell Trump that India is an investor and importer, not just a seller and exploiter of the US market. About 100 Indian companies have invested more than $10 billion in the US and created thousands of jobs there. Close to 200,000 Indian students add $7 billion to the US economy and therefore it would not be a hyperbole to say that the tides are changing and India is assuming an important and decisive role in bilateral relations between the two countries. Recently India had extended $1 billion line of credit to Russia and its far-east region. These marked steps have been seen as a paradigm shift in India’s foreign trade policy and how it is changing the old rules of the game.
U.S. goods and services trade with India totaled an estimated $142.1 billion in 2018. Exports were $58.9 billion whereas imports were $83.2 billion. The U.S. goods and services trade deficit with India was $24.2 billion in 2018 and therefore bridging this gap with the USA will put India at a higher negotiating table and back India up when the confrontation against Trump’s crackdown on H1B visas begin. The trade tensions between India and the US have been rising with Trump complaining that tariffs imposed by New Delhi on American products were “no longer acceptable” but it seems that the officials of the two countries are trying hard to finalise a trade deal before Modi and Trump meet in Houston. The PM is due to address the mega “Howdy Modi” event in Houston, Texas where he will be joined by US President Donald Trump to address over 50,000 Indian-Americans.
Texas is home to a well-regarded Indian community in the Dallas-Houston region. The Indian-American community of Houston has added value and jobs, contributing to the IT, innovation, medicine/healthcare, and energy(oil & gas) sectors in the region and therefore it is a hotbed for both the Democrats and Trump-led Republicans to woo and attract the Indian diaspora with PM Modi by their side. Texas is one of the swing states and the two parties would be willing to grind to the last dearth to have this vote bank by their side. President Trump is smart enough to understand that India is increasingly becoming a major player in investment-related activities in the US and consequently is not letting the tariff-war have any effect on Modi’s visit to the country.