US Secretary of State Marco Rubio has said Washington and New Delhi are close to finalizing a long-delayed trade agreement, while pushing for greater energy cooperation that could see Reliance Industries Ltd refine more Venezuelan crude and potentially invest in oil production in the South American country.

Rubio, who arrived in Mumbai on Tuesday, 20 October, for his second visit to India this year, held talks with External Affairs Minister S. Jaishankar on trade, defense, technology and regional security.

He was scheduled to visit Reliance’s Jamnagar refining complex in Gujarat on Wednesday, 21 October, where discussions with chairman Mukesh Ambani are expected to focus on oil supplies and investment.

The visit comes days after US President Donald Trump granted a temporary waiver from potential punitive tariffs on major buyers of Russian oil, removing an immediate obstacle to a trade agreement that has faced repeated delays over tariffs, market access and India’s energy relationship with Moscow.

“We’re very, very close. I would say we’re about as close as you can be without having executed the agreement,” Rubio told reporters in Mumbai on Tuesday.

He said only a small number of issues remained unresolved and expected the negotiations to conclude shortly.

In an interview with The Indian Express, Rubio put the agreement’s progress at 99%, saying the remaining differences largely concerned specific words and phrases. No final agreement or signing date has been announced.

The negotiations have become an important test of whether the two governments can contain their commercial disputes while maintaining cooperation on defense, technology and security in the Indo-Pacific.

Trade talks near the finish line

India and the US have spent much of the past year negotiating a trade agreement against a backdrop of American tariff increases and disagreements over Russian energy imports.

A framework agreed in February eased some of the earlier trade friction, but negotiations remained difficult as Washington pressed for greater access to India’s market and New Delhi sought relief from American duties.

Rubio’s visit follows signs of renewed progress. US ambassador to India Sergio Gor said last week that negotiations were moving rapidly, with major parts of the proposed agreement already settled.

The remaining terms have not been made public. Nor is it clear how far the agreement will protect Indian exporters from future American tariff measures or what concessions India has made on access to its domestic market.

Preferential tariff treatment would improve the competitiveness of Indian exporters, while easier access to the Indian market could benefit American manufacturers and suppliers, analysts said.

Washington has also been pressing India to buy more American energy, technology and defense equipment.

Rubio’s assessment suggests the negotiations have moved beyond their most difficult stage, although the absence of a signed agreement leaves companies without certainty about the final terms.

Russian oil remains a concern

The talks have been complicated by India’s continued purchases of Russian crude, which expanded after Moscow’s invasion of Ukraine in 2022.

Russian supplies offered Indian refiners an alternative to more expensive crude from other markets, but the trade became a recurring source of tension with Washington as the US sought to reduce Russia’s oil revenue.

Trump’s decision last week to waive potential punitive tariffs gave India some relief and created more room for negotiations.

The waiver, however, is temporary. Washington is expected to review the matter over 60 days, leaving open the possibility that pressure over Russian energy purchases could return.

The decision has also drawn criticism from American lawmakers who argue that the administration has been too accommodating toward Moscow.

Rubio defended the need to balance economic and geopolitical considerations. He acknowledged India’s efforts to diversify its oil supplies, while recognizing that the country continues to buy substantial volumes of Russian crude.

For New Delhi, the difficulty lies in securing enough competitively priced oil without becoming excessively dependent on a supplier exposed to American sanctions.

For Washington, the challenge is to encourage diversification while avoiding further disruption to energy markets already strained by conflicts in the Middle East and Ukraine.

Why Washington wants Reliance to process Venezuelan oil

The commercial focus of Rubio’s visit is expected to become clearer in Jamnagar, home to Reliance’s two large refineries with a combined processing capacity of about 1.4 million barrels per day.

The complex can process heavy and high-sulfur crude grades that many other refineries cannot handle economically. That capability makes Reliance an important prospective buyer of Venezuela’s unusually heavy oil.

Rubio said Washington intends to encourage the Indian company to increase its purchases and refining of Venezuelan crude as more of the country’s production becomes available.

“We will talk about (refining more Venezuelan crude) tomorrow with Reliance,” Rubio told reporters on Tuesday.

He also indicated that discussions could extend to Reliance participating directly in oil production in Venezuela, an option previously considered but not implemented.

Reliance already imports Venezuelan crude, but does not currently operate oil-producing assets in the country.

The renewed interest follows major political changes in Venezuela and Washington’s efforts to bring more of its oil to international markets.

Venezuelan crude could provide Indian refiners with another supply option while helping Washington reduce the pressure created by restricted Russian exports and instability in the Middle East.

There are limits to how quickly this could happen.

Venezuela’s production infrastructure requires investment, and its heavy crude needs specialized handling and refining. Higher output would also depend on commercial terms, transport availability and a sufficiently stable policy environment.

For Reliance, decisions on Venezuelan investments would need to make commercial sense beyond the immediate diplomatic interest. No new supply contract or production investment has been announced.

UAE joins discussions on energy security

The energy agenda extended beyond the bilateral relationship. Jaishankar and Rubio held a trilateral meeting in Mumbai with UAE deputy prime minister and foreign minister Sheikh Abdullah bin Zayed Al Nahyan.

The ministers discussed regional energy security, connectivity and economic cooperation at a time when conflict in the Middle East has raised concerns about oil supplies and shipping routes.

The UAE is an important energy supplier to India and a major commercial partner of both countries. Its participation brought a Gulf producer directly into discussions between two of the world’s major energy-consuming economies.

The meeting also showed how India’s energy diplomacy now reaches beyond the question of where it buys crude. Disruptions to oil production, shipping, insurance and regional trade routes can affect India’s import costs, its current account and the availability of fuel across the economy.

A sustained increase in energy prices would raise the dollar cost of India’s imports and potentially add pressure on the rupee.

Defense, technology and the China question

Trade and oil dominated Rubio’s public comments, but his discussions with Jaishankar covered a wider strategic relationship. The ministers reviewed opportunities to expand cooperation in defense, technology, energy and people-to-people ties, along with regional developments.

The two countries have increasingly linked their commercial relationship to security interests, particularly the need to diversify supply chains, protect critical technologies and strengthen their positions in the Indo-Pacific.

India is an important partner in the Quad, alongside the US, Japan and Australia, a grouping whose agenda includes maritime security, technology and regional cooperation.

China remains an important strategic consideration for both Washington and New Delhi, although India has consistently maintained its own foreign policy priorities rather than entering a formal military alliance with the US.

Rubio has sought to reassure New Delhi that Washington continues to regard the relationship as a long-term priority. Yet the durability of that partnership will also depend on how the two governments handle differences over trade, immigration and relations with other countries, analysts said.

Political sensitivities persist

Rubio’s decision to hold talks in Mumbai rather than New Delhi attracted criticism from Indian opposition figures before the visit.

Prime Minister Narendra Modi was not scheduled to meet him on this trip, unlike his earlier visit in May.

The choice of Mumbai placed the emphasis on India’s financial and commercial center, with the subsequent visit to Jamnagar giving the trip a substantial industrial component.

No official explanation was given for omitting New Delhi from the itinerary. Questions about Washington’s relationship with Pakistan have also persisted in India, alongside concerns over US visa restrictions and immigration policy.

In his interview to The Indian Express, Rubio sought to address some of those concerns and described the bilateral relationship in positive terms. The administration’s recent decisions on tariffs and Russian oil, however, illustrate the extent to which cooperation remains subject to broader American policy calculations.

Rubio also paid tribute to the victims of the November 2008 terrorist attacks in Mumbai at the Taj Mahal Palace Hotel.

At a reception marking 250 years of American independence, Jaishankar thanked him for the gesture and reiterated India’s position of zero tolerance for terrorism.