India has finalized its first long-term, structured agreement to import liquefied petroleum gas (LPG) from the United States—a move aimed at boosting energy security and reducing dependence on traditional suppliers.
Union Petroleum and Natural Gas Minister Hardeep Singh Puri announced that Indian state-run oil companies have sealed a one-year contract to import 2.2 million tonnes per annum (MTPA) of LPG from the US Gulf Coast for the 2026 contract year. The volume accounts for nearly 10% of India’s total LPG imports, marking a significant shift in the country’s sourcing strategy.
A Milestone in India–US Energy Trade
This agreement is India’s first structured LPG purchase deal with the United States and is benchmarked to the Mont Belvieu hub, the primary pricing point for US LPG.
A joint delegation from IOC, BPCL, and HPCL held negotiations with American suppliers over recent months, eventually finalizing the pathbreaking deal.
Calling it a “historic first,” Minister Puri said the agreement reflects India’s commitment to securing affordable LPG supplies while strategically diversifying energy sources.
Why This Deal Is Important for India
India is the world’s second-largest LPG consumer, with demand growing rapidly due to higher household usage and the expansion of the Ujjwala Yojana, which provides subsidized LPG connections to low-income families.
Currently, India imports more than 50% of its LPG, primarily from West Asia. By bringing the US into its supply mix, New Delhi aims to:
- Reduce overdependence on a single region
- Improve supply stability during global disruptions
- Hedge against extreme price volatility
Last year, global LPG prices surged by over 60%. Yet Ujjwala beneficiaries continued paying just ₹500–550 per cylinder, while actual market rates approached ₹1,100. The government absorbed the difference, spending more than ₹40,000 crore to shield consumers from inflationary pressure.
Puri said the new US deal is another step toward ensuring secure, affordable, and reliable LPG supplies for millions of Indian households.
Strengthening Future Energy Cooperation
The agreement is expected to deepen India-US energy cooperation and may open the door to larger, multi-year contracts in the future. For Indian oil marketing companies, diversifying beyond a single geography improves supply-chain resilience and supports long-term pricing stability.
With LPG demand increasing, especially in rural areas, the government emphasized that expanding and diversifying import sources will remain a core priority of India’s energy strategy.
