As Trump continues his trade war, Mukesh Ambani takes big decision on..., India's richest man set to...
Mukesh Ambani has planned to make India a global hub of plastic by betting on ethane gas imports from US. This will bring a big change in India's oil economy and trade relations. Amid US trade war, India can replace China and reduce oversupply in the American market, which will benefit both countries.
Asia's richest man Mukesh Ambani is in the news again. This time the reason is the large import of ethane gas from US, which was earlier sent to China, but is now coming to India. Due to the trade war of US President Donald Trump, there has been a big change in the world, which has given India a good opportunity. Ambani's company Reliance is preparing to unload this gas in Dahej, Gujarat. This gas will be used to make ethylene, a plastic making material. This will make India a global hub of plastic.
What's Ambani's bet in the ethane game?
Mukesh Ambani had bet on US ethane about a decade ago. His company Reliance started an ethane cracker unit in Dahej, Gujarat in 2017, which was the world's first major initiative of its kind. At that time, Reliance claimed that it was the first company to import ethane from North US. Today this foresight can prove to be a big weapon for India in trade agreements. In the ongoing talks between India and the US on the $43 billion trade deficit, India can say, 'We are buying your gas, so forget about the tariff.' US' 26% tariff deadline is going to expire on July 9, and India is ready to take full advantage of this opportunity.
This move of Reliance is not limited to trade only. Ethane, which is a part of natural gas, plays an important role in making plastic. It is a colorless, odorless gas, which is brought in liquid form in special ships. Currently, one such ship, STL Qianjiang, is moving from the Gulf Coast of US to Dahej. Reliance has six such ships and the company is now planning to add three more ships.
Why is ethane special?
Earlier, Reliance and other refineries used naphtha, which is made from crude oil, to make plastic. But only 30% ethylene can be made from naphtha, whereas this figure reaches 80% from ethane. That is, ethane is more economical and effective. In terms of energy, ethane is almost half cheaper than naphtha. Earlier, ethane did not get that much priority in India. Even in the natural gas coming from Qatar, ethane was not separated. But now the situation is changing. Qatar Energy has clearly stated in the new agreement with India's Oil and Natural Gas Corporation (ONGC) that it will give only 'lean' gas. If ethane is required, then it will have to be paid for separately.
ONGC has also taken steps in this direction and has signed a deal with Japan's Mitsui OSK Lines for two large ethane carriers. But Reliance has already won the game. The company is now planning to lay a 100 km long pipeline from Dahej to its second unit in Gujarat.
What's impact on India's oil economy?
The increasing use of ethane can bring a big change in India's oil-based economy. Currently, India's refineries are mainly dependent on crude oil coming from the Middle East. But if the use of ethane increases, some refineries may go into losses. Naphtha, which earlier played an important role in making polyester, detergents, fertilizers and cosmetics, may now take a back seat.
The oil industry in India has now entered a new phase. Last year, about one-third of the cars of the country's largest car manufacturer were running on CNG. To reduce pollution and reduce dependence on foreign oil, the government has made a rule to add 20% bio-ethanol to petrol. Also, the increasing demand for electric vehicles is also reducing petrol consumption. Despite this, a government company is building a new refinery of 9 million tonnes per annum in Andhra Pradesh. Experts believe that this project is running only for the greed of subsidy and employment, because its investment does not make much economic sense.
How is Trump-Ambani's friendship?
This move of Mukesh Ambani can prove to be beneficial not only for India but also for US. Due to Trump's trade war, questions have been raised on the demand for American ethane. China was a big buyer of this gas, but now India can take its place. Even if India cannot buy as much ethane as China, it can definitely help in reducing the oversupply in the US market. This will be an opportunity for Trump to praise his trade policy and say that he is making US great again.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
Textiles exporters face fresh trade uncertainty amid Trump's latest announcements
NEW DELHI: US President 's latest tariff announcements have resulted in fresh uncertainty, with buyers expected to go slow on new orders. While textiles exporters seem to have got an advantage over Bangladesh, which has been slapped with 35% duty by Trump, industry is keeping close tabs on India's bilateral trade deal with the US as the American president has claimed the agreement with Vietnam allows him to impose a 20% tariff, although there may be product-specific concessions. Tired of too many ads? go ad free now In any case, the final word is not out on where tariffs settle in the coming weeks, with countries, including Bangladesh, once again rushing to Washington to rebalance the equations. "We need to watch how tariffs move. Buyers are a little confused at the moment," said V Elangovan, managing director of Tirupur-based SNQS International. What is adding to the complications is China. "Retailers have to fill their shelves. Last week, our merchandisers were in Shanghai, we could not compete because the Chinese were quoting better prices this year than last year. It is not clear how they can do so when the tariff for them is higher. We need more hand-holding from govt," he added. Govt and industry has been pushing for zero duty for garments and home textiles, where Indian products are competitive, although it is unlikely even if a trade deal is worked out as the Trump administration has refused to remove the 10% baseline tariff applicable on all countries. At 10%, Indian exporters are seen to be better off than rivals, provided subsidies are not doled out to Chinese manufacturers. In natural garments, where India has traditional strength, the cost disadvantage is relatively small, 3-4%. However, in synthetic garments, the gap widens to 10-11% due to higher production costs, Apparel Export Promotion Council (AEPC) said. "India, even with the existing reciprocal tariff rate (26% announced in April), will gain in export competitiveness vis-a-vis major garment exporting competing countries. Tired of too many ads? go ad free now Besides, we are quite hopeful of India striking a favourable trade deal which will further improve the competitiveness of India's apparel exports in all important US market... even a moderate reduction in the reciprocal tariff to around 15% could significantly improve our competitiveness across both natural and synthetic garment categories, thereby opening infinite export possibilities for India amid shifting global sourcing trends," said AEPC CEO Mithileshwar Thakur. With current tariff levels - India at 26%, Vietnam at 20%, and Bangladesh at 35% - India is seen to be competitive against Bangladesh in natural garments but faces pressure in the synthetics segment. "It is looking good for us and a trade deal will help," said K M Subramani, president of Tirupur Exporters' Association. The big question is the ability of Indian garment makers to manufacture on a scale, especially given their reluctance to invest in capacity addition.
&w=3840&q=100)
India.com
an hour ago
- India.com
Dollar Dominance, Trade Risks & Delhi's Balancing Act – Why Trump's BRICS Threats Matter For India
New Delhi: At a time when India inches closer to finalising a trade deal with the United States, a thunderclap from Washington has cast shadows over the celebration. US President Donald Trump's blunt message, posted publicly this week, warned that any country aligning with what he described as BRICS' 'anti-American policies' would face an additional 10% tariff without exceptions. As one of the founding members of BRICS, India finds itself at the centre of this growing storm. The recently concluded Rio de Janeiro summit of the bloc had laid out an ambitious declaration. There was no mention of the United States, but it still sent ripples through Washington. The BRICS statement challenged unilateral economic measures, defended multilateralism, voiced concern over tariffs that disrupt global trade and pushed for changes to global governance. These words appear to have stung. What followed was Trump's retaliation. On his Truth Social platform, he wrote that siding with BRICS' economic vision would come at a cost. The timing could not have been more crucial. He is expected to begin announcing trade deals from Monday, and India is among the countries on the list. In Delhi, this new tension is being watched with a mix of caution and calculation. Trade experts in the capital believe the core of Trump's anger lies deeper within the BRICS push for currency alternatives. For years, Russia and China have spoken of a new financial system to bypass the dollar. In 2022, Russia even floated a proposal for a BRICS reserve currency. Many Indian analysts suspect this is what triggered Trump's fury. The dollar remains Washington's most powerful economic weapon. The United States used it in 2012 to isolate Iran and again in 2022 against Russia. Any attempt to weaken its grip invites blowback. Despite its lack of political cohesion, BRICS still threatens that power by raising the idea of currency diversification. Indian economists see the bigger picture. The call for a common BRICS currency faces hurdles. Political will is scattered. China's dominance in the bloc sparks unease among other members. But the conversations alone unsettle Washington. That is why even vague references to multilateral financial systems draw fire. Meanwhile, India, experts are of the view, must walk a fine line. It is preparing for what is being described as a 'mini trade deal' with the United States. Reports suggest Delhi has already agreed to a baseline 10% tariff, but higher rates – up to 26% – remain on the table. Agriculture and dairy continue to be sticking points. At the same time, India cannot ignore its standing in BRICS. It shares that space with strategic rivals like China but also long-standing defence and energy partners like Russia. The bloc includes emerging economies looking for new trade paths. Turning away completely would be costly. Domestic industry lobbies in India are growing nervous. Sectors like textiles, pharma and information technology could suffer if Trump hikes tariffs further. Executives fear the fallout of a new wave of American protectionism. What adds to the anxiety is the unpredictability. Trump has changed course before. His sudden termination of a long-standing free trade pact with Vietnam has become a cautionary tale. Despite the tensions, some foreign policy voices in Delhi urge calm. They argue that BRICS has always been an idea more than an institution. Its members rarely share political agendas or geographical interests. But that has not stopped it from becoming a target. Others believe Trump's aggressive approach may backfire. His posture could push India to double down on groups such as BRICS and the Global South. But that path brings its own dilemmas, especially with China pulling the strings in many of these platforms. At the heart of it all, the challenge remains the same – can India navigate between its old allies and emerging coalitions without inviting punishment from either? With Trump's new tariffs looming, the question is no longer hypothetical. The countdown has begun.
News18
2 hours ago
- News18
Doanld Trump Threatens 10% Tariffs on BRICS Countries: Dollar Defense & Iran Message News18
In a joint statement after the Brasil summit, BRICS leaders, including Prime Minister Narendra Modi, warned of "the rise of unilateral tariff and non-tariff measures which distort trade and are inconsistent with WTO rules".Round 2 of Donald Trump vs the BRICS bloc began this week after the United States President announced an additional 10 per cent tariff on countries aligning with the group's "Anti-American policies". "There will be no exceptions..." Trump said Sunday night on Truth President did not say what these 'anti-American policies' are or specify which of the group's policies he referring to, although six months ago he did threaten the group with 100 per cent tariffs if they attempted to replace the US dollar as the dominant currency for international trade. News18 Mobile App -
