Oil and gas import bill rises 20% to $69b in H1 of FY25

India’s net oil and gas import bill rose by 20% to $69 billion in the first half of the fiscal year due to rising consumption and stagnant domestic production. Crude oil imports increased to $71.3 billion, while LNG imports jumped 18%. This rise in import costs was exacerbated by a decline in refined product exports.

India is expediting FTA talks with Australia, aiming for a comprehensive economic cooperation agreement before Australia’s 2024 elections. Current bilateral trade is around USD 24 billion. India is also pushing for a balanced review of its FTA with ASEAN, addressing tariff asymmetries by 2025.

India has urged the UAE to address concerns over a significant rise in exports of silver, platinum alloy, and dry dates, following the 2022 Comprehensive Economic Partnership Agreement. The UAE has agreed to investigate the compliance with the rules of origin norms to prevent circumvention.

India doesn’t anticipate an immediate impact on trade relations with Canada despite ongoing diplomatic tensions. Bilateral trade remains stable, with no new trade restrictions implemented. Efforts may focus on diversifying imports of pulses and fertilizers from other countries.

UK Business and Trade Secretary Jonathan Reynolds emphasizes the priority of a trade deal with India at the International Investment Summit in London. The UK is negotiating a Free Trade Agreement with India, aiming to enhance the GBP 38-billion annual bilateral trade partnership while fostering significant economic growth and job creation across the country.

India’s export of oil meals dropped by 35% in September to 213,744 tonnes, with an overall 9% decline during April-September FY24. Soybean meal exports rose due to higher imports by UAE, Iran, and France, while rapeseed and castor seed meal exports decreased.

US-India Strategic Partnership Forum President Mukesh Aghi highlights exports as a key job creator for India’s $5 trillion economy goal, stressing the need for economic engagements with the US. The bilateral trade target is set at $500 billion, with current trade figures revealing a close competition with China.

The Indian government restricted the import of parts of gas-fuelled pocket lighters, effective immediately. Previously, these imports were unrestricted. Key source countries include China, Spain, Turkey, and the UAE. Lighter parts imports reached $3.8 million this fiscal year. The new measure aims to curtail sub-standard imports and bolster domestic production.

Imported inflation is gradually rising from a negative base, contributing 0.5 percentage points to the Consumer Price Index inflation since April 2024. Global price increases and customs duty changes are influencing this trend, but strong FPI inflows and RBI intervention are helping stabilize the rupee.

The government has restricted the import of parts for pocket lighters to boost domestic manufacturing and reduce dependency on Chinese imports. This follows previous bans on low-cost and specific types of lighters, along with quality control measures. The import value of lighter parts from China was $3.8 million during April-July this fiscal.