India–US Trade Deal Could Include Oil Bargain, Says New Jersey Governor

 

India-US Trade Talks Could Lead to Oil Bargain, Says New Jersey Governor

The future of India–U.S. trade relations may involve more than just resolving tariff disputes. According to New Jersey Governor Phil Murphy, a senior Democratic leader and vocal critic of President Donald Trump’s trade policies, both nations could strike a broader deal that includes oil as part of the negotiations.

Speaking on Wednesday, Murphy suggested that while there is room to compromise on the stiff tariffs currently weighing down bilateral trade, the talks could evolve into a “grand bargain” that extends to the energy sector.

The backdrop to this is Trump’s recent decision to impose a 25% penalty tariff on India for continuing to import oil from Russia. The move was part of Washington’s wider push to penalize countries seen as helping Russia bypass Western sanctions. But for India, which relies heavily on energy imports to meet its growing demand, Russian oil has been an affordable and vital option.

Murphy, who has often positioned himself against Trump’s hardline economic policies, made it clear that he disagreed with the idea of punishing allies like India with high tariffs. “When it comes to the India–U.S. trade deal, there will be a landing place on tariffs,” he said, adding that the solution may not be as simple as lowering taxes on goods. Instead, the governor hinted at a more strategic compromise that ties together trade, energy, and broader geopolitical interests.

The Tariff Tussle

India and the U.S. have had a bumpy trade relationship in recent years, with disputes ranging from agricultural products to tech and pharmaceuticals. Trump’s tariffs — especially the latest ones on oil imports — have added more friction. For Washington, the tariffs are a way to apply pressure; for New Delhi, they are seen as unfair punishment, especially given India’s role as a long-time U.S. partner in Asia.

The 25% tariff in particular stings because of India’s unique energy needs. As the world’s third-largest oil importer, India cannot easily replace Russian crude without driving up domestic fuel prices. While the U.S. would prefer India to shift more of its purchases to American suppliers, the sudden cost jump makes it difficult for New Delhi to comply.

Oil at the Center of the Deal

This is where Murphy’s idea of a “grand bargain” comes in. Instead of wrangling endlessly over tariffs, the U.S. and India could negotiate an arrangement that involves long-term commitments on energy. For instance, India could agree to increase imports of American oil and gas, while the U.S. could ease tariffs on other goods or services important to New Delhi. Such a compromise could balance both nations’ economic and strategic priorities.

Energy trade is already becoming a pillar of the India–U.S. relationship. In recent years, India has significantly increased imports of liquefied natural gas (LNG) and crude oil from the U.S., diversifying its energy basket. A formalized bargain could lock in those trends while easing the current tension over Russian supplies.

Looking Ahead

Murphy’s comments underline a growing split in Washington over how best to deal with allies like India. While Trump sees tariffs as leverage, critics argue that such heavy-handed tactics risk alienating partners at a time when global cooperation is vital.

For India, the big question is whether Washington is willing to recognize its energy realities. Any grand bargain will need to acknowledge that India cannot abruptly cut ties with Russian oil without major economic costs. But if the U.S. offers a fair deal — lower tariffs, more access to American energy, and perhaps concessions in other trade areas — there may be a path forward.

As the world watches the unfolding U.S.–India talks, Murphy’s suggestion adds a new dimension: this may not just be about tariffs and trade but also about reshaping the global energy equation.