In a first, Indian oil public sector undertakings (PSUs) finalised a one-year contract to import around 2.2 million tonnes (mt) of liquefied petroleum gas (LPG) from the US.
The LPG import deal comes at a time when negotiations for an India-US bilateral trade agreement (BTA) are gathering steam.
Earlier in the month, US President Donald Trump had said Washington and New Delhi were “pretty close” to reaching a fair trade deal.
Announcing the contract, Hardeep Singh Puri, Union minister of petroleum and natural gas, said the LPG volumes to be imported from the US Gulf Coast for the contract year 2026 represent close to 10 per cent of India’s annual LPG imports.
As India works to narrow trade surplus with the US, the energy sector is likely to be central in the two countries finalising trade agreements.
“This purchase is based on using Mount Belvieu as the benchmark for LPG purchases, and a team of our officials from Indian Oil, BPCL, and HPCL had visited the US, and engaged in discussions with major US producers over the last few months, which have been concluded now,” Puri said in a post on social media platform X.
India is import dependent for around 60 percent of its domestic LPG requirements.
To secure supplies, the country has been looking to diversify sources as around 90 per cent of the total LPG imports come from West Asian countries like the UAE, Qatar, Kuwait, and Saudi Arabia.
Highlighting the importance of the deal, Puri said the one-year contract was another step in strengthening India’s energy security while ensuring affordable access to clean cooking fuel for millions of households.
Besides LPG, Indian oil companies are increasing crude oil imports too from the US.
India’s monthly crude oil imports from the US climbed in October to their highest level since March 2021, according to data from maritime intelligence firm Kpler.
The growing share of US oil in India’s crude basket underlines deepening energy ties between the two nations, and reflects New Delhi’s strategy to balance supply security, economics, and geopolitics.
India is a large importer of crude oil, liquefied natural gas (LNG), and LPG. The US is likely to account for a growing share of India’s imports of all the three fuels.
Rising LPG consumption
India’s LPG consumption has grown 7 per cent year-on-year (Y-o-Y) so far in 2025-26 (FY26) amid government initiatives such as PM Ujjwala Yojana, which provides subsidised LPG cylinders.
Puri said India’s state-run oil marketing companies (OMCs) have ensured affordable LPG prices for consumers despite a 60 per cent surge in international prices last year.
To absorb the impact, the Indian government incurred an expenditure of over ₹40,000 crore in the previous year.
The minister said Ujjwala beneficiaries continued to receive LPG cylinders at a subsidised price of about ₹500-550 despite the actual cost exceeding ₹1,100.
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