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Modi’s US Energy Deal Hits Trade, Energy and Electoral Targets

by South Asian Star | Dec 2, 2025 | National

A strategic shift in energy sourcing.

Today we bring you an interesting energy deal, Modi’s triumph in Bihar and a kingmaker’s ambition for his state.

The week opened with an energy deal that targets bilateral trade, energy security and electoral promises, all in one go.

State-owned oil companies have closed India’s first term contract with the US to import about 2.2 million tons of liquefied petroleum gas in 2026. That’s roughly equal to 10% of the country’s imports of the key cooking fuel. Already, the US share of India’s total LPG imports has risen to 7% so far this year, from just 0.6% in the entire 2024, according to data compiled by Kpler.

India Bought Negligible LPG Volumes from the US in 2024

New Delhi seeks trade deal with Washington to lower crippling tariffs

The first implication that comes to mind is how this keeps alive the hope of a finalization of the long-awaited US-India trade deal, given President Donald Trump’s demand that India import more commodities and goods to reduce the US deficit. It may even build some goodwill for India in the face of another proposed round of sanctions on Russia that could result in up to 500% tariffs for countries that buy Russian energy products, such as China and India.

The deal also helps India diversify energy supplies away from the UAE, Qatar and Saudi Arabia, which have been key suppliers of LPG to the country, Bloomberg’s oil trading reporter Rakesh Sharma tells me. This comes even as India steps up crude oil purchases from the Middle East, while scaling back orders for Russian oil, indicating the delicate balance India is trying to achieve with strategic partners.

India’s LPG demand has jumped 74% over the last decade, outpacing total refined fuel consumption in the world’s third-largest oil consumer. This surge has been supported not just by rising incomes, but also Modi’s Ujjwala program to provide subsidized cooking gas to low-income households — a move that has consistently won him support from women voters.

One deal. Many boxes ticked. As I write this, October trade data has just been released and the trade deficit has widened to a record.

Next up in this edition, my colleague Dan Strumpf takes a look at how much political mileage Modi might draw from his sweeping win in Bihar. But first, the stories you need to read, watch or listen to from us today.

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Bihar Win Powers Modi’s National Push

Hello, I’m Dan Strumpf, Bloomberg’s senior government reporter in New Delhi.

It’s been a rocky year for Prime Minister Narendra Modi — from a bitter military clash with archrival Pakistan to a sharp downturn in relations with US President Donald Trump and the deadly blasts in Delhi and Kashmir.

The string of setbacks had raised questions about his grip on domestic politics. If there was a worry that any of that had wounded Modi’s standing locally, it could be safely put to rest after a resounding victory by his party’s alliance in elections in Bihar, the country’s poorest state.

The National Democratic Alliance bloc, led by Modi’s Bharatiya Janata Party, took 202 of the 243 seats up for grabs in the race. By itself, the BJP won almost 90% of all the seats it contested, an unprecedented sweep, fueling vote-rigging allegations from the opposition Congress party, which has said it will analyze the data and present proof in a couple of weeks.

For most observers, though, Modi’s victory offers two key takeaways.

First, it shows that the prime minister remains his party’s star campaigner. After a poor showing at last year’s federal elections, there were some concerns that Modi was a spent force, but Bihar has allayed that to a great extent. His rallies in the state drew large crowds, reaffirming his personal pull among voters.

Also, the win helps to shore up the right-wing party’s links with a crucial partner, Nitish Kumar, chief minister of Bihar and leader of the regional JD (U) group. Modi’s dominance in his political career, until the general elections last year, had left him untested on his ability to govern with allies.

The Bihar campaign — where Kumar and Modi were photographed wreathed in smiles and walking hand-in-hand — should convince some skeptics that the leader, sometimes seen as a hard authoritarian, can handle relations deftly when needed.

As someone who grew up in the US and closely follows the idiosyncrasies of American politics, Modi’s triumph in Bihar feels to me like a strong midterm election showing. It’s a helpful boost for his coalition that helps regain some momentum after a wobbly year.

Still, the road ahead may not be entirely smooth. State elections in Tamil Nadu and West Bengal — where the BJP faces a formidable regional rival in the Trinamool Congress — will test how far this momentum carries for Modi. Internal strains within the broader coalition could also resurface down the line.

Chai Time: Kingmaker Eyes $1 Trillion in Investments

Andhra Pradesh Chief Minister N. Chandrababu Naidu is chasing a bold 15% growth target, helped by hopes of $1 trillion in investment over the next 10 years. Prime Minister Modi’s key ally is drawing firms like Google and wants the state to lead in areas such as green energy, quantum computing and biotechnology.

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