India is poised to significantly increase its energy imports from the United States, including a boost in coking coal supplies, as part of an interim trade agreement reached between the two nations. The joint statement, released on Saturday, February 7, 2026, outlines India's intention to purchase $500 billion worth of products from the U.S. over the next five years, encompassing energy products and coking coal. This agreement follows months of negotiations aimed at easing trade tensions and stabilizing bilateral economic ties.

Details of the Agreement

The interim agreement represents a "historic milestone" in the U.S.-India partnership, demonstrating a mutual commitment to reciprocal and balanced trade. Key aspects of the agreement include:

• Increased Energy Imports: India will significantly increase its imports of U.S. energy products. While the specific types and quantities of energy products were not detailed in the statement, India has been increasing imports of crude oil, liquefied natural gas (LNG), and liquefied petroleum gas (LPG) from the U.S. in recent years.
• Coking Coal Boost: Coking coal, crucial for steel manufacturing, will see increased imports from the U.S.. In fiscal year 2025, coking coal constituted over 40% of the 20 million tonnes of coal imported by India from the U.S.. As of November in the current fiscal year (FY26), the U.S. has already supplied 6.04 million tonnes of coking coal.
• Tariff Reductions: India will eliminate or reduce tariffs on all U.S. industrial goods and a wide range of U.S. food and agricultural products, including dried distillers' grains (DDGs), red sorghum, tree nuts, fruits, soybean oil, and wine.
• Reciprocal Tariffs: The United States will apply an 18% reciprocal tariff on originating goods from India, including textiles, apparel, leather, footwear, plastics, rubber, organic chemicals, home décor, artisanal products, and certain machinery.
• Digital Trade and Technology: Both countries commit to addressing barriers to digital trade and expanding cooperation in emerging technologies, including GPUs and data-center hardware.

Implications for India's Energy Sector

India's rising demand for steel, with a capacity of approximately 205 million tonnes per annum (mtpa) and aims to reach 300 mtpa by 2030-31 and 500 mtpa by 2047, fuels the need for coking coal. The Indian government recently designated coking coal as a critical mineral, highlighting its importance. While India possesses substantial coking coal reserves, it heavily relies on imports to meet its steel sector's demands.

The agreement with the U.S. aligns with India's broader strategy of diversifying its coking coal sources. Imports from Australia, a major supplier, have been decreasing, prompting India to explore options in the U.S., Russia, and Mozambique. In the April-January period of fiscal year 2025-26, India's coking coal imports through major ports reached 53.68 million metric tons, a 9.26% increase year-on-year.

Wider Economic and Geopolitical Context

Union Minister for Commerce and Industry Piyush Goyal stated that the trade pact would open a $30 trillion market for Indian exporters. The agreement also reflects a renewed engagement between the two countries after a period of trade and energy relations. It comes as the U.S. has been pressuring India to reduce its reliance on Russian oil. While India has been diversifying its sourcing options, a complete shift away from Russia could significantly increase India's import bill.

The agreement also underscores the United States' commitment to opening India's market to American products by removing tariff and non-tariff barriers.