India is considering removing the import tax on U.S. liquefied natural gas (LNG) to boost purchases and reduce its trade surplus with Washington, according to Economic Times.
This move aligns with India's pledge to increase U.S. energy imports and targets increased bilateral trade.
Scrapping the tax would make U.S. LNG more competitive, supporting India's growing energy needs. During Prime Minister Narendra Modi's U.S. visit last month, India pledged to increase U.S. energy purchases by $10 billion to $25 billion in the near future, while both leaders agreed to target $500 billion in bilateral trade by 2030.
The surplus totalled $45.4 billion last year. India currently imposes a 2.5% basic customs duty and an additional 0.25% social welfare tax on LNG. India, the world's fourth-biggest LNG importer, imported 25.9 million tonnes of LNG worth about $14.2 billion in the first 11 months.
LNG imports are on track to average about 27-28 million tonnes in this fiscal year, with U.S. supplies accounting for 20%-25% of that.