Mint Explainer | How Qatar can help India cushion the Trump tariff shock?

India and Qatar are moving towards a more strategic partnership that can help Asia’s second-largest economy diversify its energy basket, reduce dependency on Russian oil, and navigate growing geopolitical uncertainties and sanctions-related price volatility.

Mint explains the evolving relationship through the lens of energy security, economic growth, and regional stability.

How can Qatar help India’s energy transition?

The US's steep 50% tariff has put India’s goods trade worth $86.5 billion under strain. In 2024-25, India-Qatar trade totalled $14.14 billion, with a significant portion skewed toward energy. India had a trade deficit of $10.78 billion, with petroleum imports accounting for nearly 93% of all imports. Qatar supplied $6.39 billion in liquefied natural gas (LNG) and $4.69 billion in liquefied petroleum gas (LPG) and crude oil.

Indian exports totalled $1.68 billion, led by iron and steel, basmati rice, and jewellery. Beyond commerce, over 800,000 Indians reside and work in Qatar, establishing deep socio-economic ties and generating substantial remittance inflows.

In terms of value, one Qatari Riyal equals ₹24.37, while one US dollar equals ₹88.75. The real economic advantage for India lies not in the nominal exchange rate but in the potential for local currency settlement. If India and Qatar start settling more trade in local currencies (INR-QAR) rather than USD, it could be a game-changer. Such an arrangement would help India cut dollar dependence, lower foreign-exchange conversion costs, and enhance the rupee’s global utility.

However, for now, this remains limited as Qatar’s energy contracts are still denominated in USD, reflecting the global norm for hydrocarbon trade.

Currently, India imports a significant portion of its crude oil from Russia, as it remains relatively cheaper; however, this exposes the country to volatile pricing and sanctions risks. Qatar, as one of the world’s largest LNG and hydrocarbon exporters, offers New Delhi a more predictable and politically stable energy source. The upcoming 7.5 million tonnes per year LNG deal from 2028, along with expanding cooperation in petroleum products, gives the Indian government greater flexibility to diversify away from Russian crude.

However, Doha cannot fully replace Moscow in terms of crude oil volume in the near term, as India’s Russian imports remain large and refinery-specific, optimized for particular grades. Still, the growing partnership with the Arab nation can mitigate supply disruptions, support energy transition goals, and strengthen New Delhi’s negotiating power on global pricing and sourcing.

Why does the partnership matter?

From Qatar’s perspective, the September 2025 Israeli airstrike on Doha—the first ever on a Gulf Cooperation Council (GCC) state—highlighted the vulnerabilities of relying solely on US security assurances. While Washington reiterated its commitment to Qatar’s protection, Doha’s response has been to diversify its strategic alignments. Strengthening ties with New Delhi provides a stable Asian partner with economic heft, defence cooperation potential, and technology collaboration prospects in a world increasingly defined by multipolarity.

For India, Qatar is central to its strategy in West Asia. Reliable LNG and LPG imports are critical to powering the subcontinent’s industrial and urban growth. Qatar’s geographic position along vital Persian Gulf maritime routes ensure continuity of essential energy flows. Coupled with the large Indian diaspora, deeper engagement with Doha provides both economic resilience and diplomatic leverage across the Gulf, particularly amid regional rivalries and shifting alliances.

“The evolving India-Qatar partnership reflects a pragmatic convergence of needs—Qatar’s quest for diversified security and investment partners and India’s pursuit of stable energy supplies and regional influence. As global power dynamics shift toward a multipolar order, a stronger India-Qatar axis promises mutual resilience, economic complementarity, and greater strategic autonomy for both nations," said Ajay Srivastava, founder of think tank Global Trade Research Initiative (GTRI).

What's the scope of trade diversifying beyond energy?

Energy remains the primary component of India-Qatar trade. In 2024-25, India imported $11.90 billion worth of petroleum and gas products, including LNG ($6.39 billion), butane ($1.67 billion), propane ($1.54 billion), and crude oil ($1.06 billion). Non-energy imports, such as chemicals, fertilizers, aluminium, and raw materials, were worth $1.24 billion, indicating that there is room to expand trade beyond energy.

Indian exports to Qatar totalled $1.68 billion. Industrial products, machinery, and food items led the basket, with iron and steel ($154 million), basmati rice ($123 million), and jewellery ($110 million) among the top items. While sectors like processed minerals and machinery are showing gradual growth, overall export momentum is constrained by weak competitiveness and tariff barriers.

Trade with Qatar is almost one-sided, as India imported $12.46 billion worth of goods in 2024-25 against exports of just $1.68 billion. The pattern was similar in 2023-24, with imports at $12.34 billion and exports at $1.70 billion, reflecting a sharp imbalance largely driven by India’s dependence on energy supplies from Qatar.

How can Qatar’s location benefit India?

Qatar lies at the heart of the Persian Gulf, between Saudi Arabia and Iran, with easy access to major sea routes that connect Asia, Africa, and Europe. It sits along the western coast of the Gulf, close to key maritime chokepoints such as the Strait of Hormuz, through which nearly a fifth of the world’s oil passes. This makes Qatar a natural hub for regional trade and energy logistics.

For India, Qatar’s position offers a gateway to tap neighbouring markets in the GCC—including Saudi Arabia, the UAE, Kuwait, Bahrain, and Oman—as well as North and East Africa. Enhanced connectivity through Qatari ports such as Hamad Port can facilitate Indian exports of food products, textiles, machinery, and pharmaceuticals to these high-demand markets.

Qatar’s ports also help India diversify trade routes and reduce dependence on a single corridor. While Iran’s Chabahar Port is designed to provide overland access to Afghanistan and Central Asia, Qatar offers maritime access to Gulf, African, and European markets, making it a complementary route.

Strengthening trade and investment ties with Doha enables India to utilize Qatar as a base for re-exports and distribution across the wider region, thereby providing resilience against regional instability and supporting India’s goal of expanding its footprint in West Asia’s fast-growing consumer and industrial markets.

What's the way ahead?

The two nations are now exploring a free trade agreement and are also working towards finalizing the terms of reference (ToR) for a Comprehensive Economic Partnership Agreement (CEPA).

An Indian business delegation led by Union commerce minister Piyush Goyal is on a two-day visit to Doha starting from 6 October, and it is expected that the ToR of the FTA will be finalized soon to help move beyond energy dependence. Discussions include diversifying Indian imports through industrial partnerships in chemicals, fertilizers, and metals, expanding exports of engineering goods, machinery, and processed food, and establishing joint ventures in energy infrastructure and green technology to strengthen long-term strategic resilience.

The aim is to reduce India’s trade deficit, cut reliance on unstable oil prices, and build a more balanced partnership that includes manufacturing, technology, and services. Both countries want to move beyond energy trade by investing in each other’s markets, promoting innovation, and creating a stable relationship that can withstand US tariffs and global uncertainty.