Kumar Bahukhandi
The quantity contracted is close to 10 per cent of India’s annual LPG imports and marks the first such structured US LPG contract for the Indian market. (File Image)
The move is seen as an attempt to narrow India’s trade surplus with the US – a sticking point for President Donald Trump, who has slapped a 50 per cent tariff on Indian goods entering America
New Delhi: In a major step towards strengthening the country’s energy security, India on Monday, for the first time, opened up the US market on liquefied petroleum gas (LPG) as Union minister for petroleum and natural gas Hardeep Singh Puri announced that state-owned oil companies have signed a one-year agreement to import cooking gas or LPG from the United States from 2026. The aim of the government is to diversify India’s LPG sourcing and to provide secure affordable supplies of LPG to the people of the country.
The move of the government comes amid the US President Donald Trump’s imposition of a 50 per cent tariff on Indian goods entering America. “Indian PSU oil companies have successfully concluded a one-year structured contract to import around 2.2 million tonnes of LPG from the US Gulf Coast for the contract year 2026,” an official statement said.
India has already offered to raise energy imports from the US as part of the bilateral trade deal that has been under discussions for the past couple of months. New Delhi buys about 8 percent of its crude oil – the raw material for making petrol and diesel – from the US. In the first half of 2025, India imported about 271,000 barrels per day (bpd) of US crude, up 51 per cent from 180,000 bpd in H1 2024.
The minister also mentioned that teams from PSU oil firms such as Indian Oil Corporation Limited (IOCL), Bharat Petroleum Corporation Limited (BPCL), and Hindustan Petroleum Corporation Limited (HPCL) recently travelled to the US for discussions with leading American producers, which have now been successfully completed.
It is also learnt that India is either self-sufficient or has surplus production in most fuels like petrol, diesel and jet fuel, it imports about 65 per cent of its LPG consumption of 31 million tonnes. In 2024, about 90 per cent of the 20.4 million tonnes of LPG imports came from UAE, Qatar, Kuwait and Saudi Arabia. It is, however, expected that Indian oil marketing companies (OMCs) like IOC, BPCL and HPCL will import about 48 very-large gas carriers of LPG in 2026 where the supplies will be made by super majors Chevron, Phillips and TotalEnergies Trading SA.
Earlier in the day oil minister Puri took to X to announce the LPG deal. “A historic first! One of the largest and the world’s fastest growing LPG markets opens up to the United States. In our endeavour to provide secure affordable supplies of LPG to the people of India, we have been diversifying our LPG sourcing,” he said.
“In a significant development, Indian PSU oil companies have successfully concluded a 1 year deal for imports of around 2.2 MTPA LPG, close to 10 percent of our annual imports – for the contract year 2026, to be sourced from the US Gulf Coast – the first structured contract of US LPG for the Indian market,” the minister said.
“Poor Ujjwala consumers, who make up for a third of all LPG users in the country, are receiving cooking gas cylinders at just Rs 500-550 while the actual cost was over Rs 1,100. The government incurred the cost of over Rs 40,000 crore last year in order to ensure our mothers and sisters did not feel the burden of rising international LPG prices,” he added.
