New Delhi: India has concluded its first major structured Liquefied Petroleum Gas (LPG) import agreement with the United States for the contract year 2026, Petroleum and Natural Gas Minister Hardeep Singh Puri announced on Monday. State-run oil companies have finalised a one-year deal to import about 2.2 million tonnes per annum of LPG, close to 10 percent of India’s annual LPG imports, from the US Gulf Coast.
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Calling it a “historic first,” Puri said, “One of the largest and the world’s fastest growing LPG market opens up to the United States.” He added that the agreement marks the first structured contract for US LPG in the Indian market.
The minister said the contract is benchmarked to Mount Belvieu prices, following discussions held between US producers and a joint team from Indian Oil, Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL). The officials had visited the US between July 21 and 24, 2025 to advance negotiations on long-term affordability and supply security.
Puri noted that India has been working to diversify its LPG sourcing basket. “In our endeavour to provide secure affordable supplies of LPG to the people of India, we have been diversifying our LPG sourcing,” he said.
Industry analysts note that the deal also underscores India’s broader effort to expand energy trade with the US, even as the two nations navigate tensions over tariffs. In 2025, India’s crude oil imports from the US surged sharply. At the same time, India is reportedly weighing the removal of import taxes on US propane and LNG, a move that could further boost US energy exports to India and help narrow India’s trade surplus.
Observers say that this deepening of energy ties comes amid reciprocal tariff tensions: the US has imposed steep duties on Indian exports, including a 50 percent levy on certain goods, heightening the case for India to strengthen its energy relationship as a win-win lever in bilateral trade.
Highlighting the government’s efforts to shield households from international price volatility, Puri said that under Prime Minister Narendra Modi’s leadership, PSU oil companies ensured that LPG remained affordable for beneficiaries of the Pradhan Mantri Ujjwala Yojana.
“Even as global prices soared by over 60 percent last year, Modi Ji ensured that our Ujjwala consumers continued to receive LPG cylinder at just Rs 500–550 whereas the actual cost of the cylinder was over Rs 1,100,” the minister said in a post on X. He added that the government incurred more than Rs 40,000 crore last year so that “our mothers and sisters did not feel the burden of rising international LPG prices.”
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The ministry said the new sourcing arrangement for 2026 is expected to further bolster India’s energy security while ensuring access to clean cooking fuel for millions of households. The contract represents a significant shift in India’s global LPG procurement strategy and opens new avenues for bilateral energy trade with the United States.
