India strikes first US LPG import deal amid tariff tensions

India will import around 2.2 million tonnes of liquefied petroleum gas from the United States for 2026 under a one-year agreement, marking the first contract to buy American LPG for the Indian market in the midst of tariff friction between the two countries. 

Indian Minister of Petroleum and Natural Gas Hardeep Singh Puri today [17 November] made the announcement about the agreement signed by Indian public sector oil companies with the US Gulf Coast.

The contract comes at a time when India is looking to diversify its energy sourcing to power the world's fifth largest energy-guzzling economy and increase energy trade with the US amid bilateral trade pact negotiations.

This represents close to ten percent of India's annual LPG imports, an official Puri said. He described the agreement as a "historic development" and said one of the world's largest and fastest growing LPG markets has now opened up to the United States.

As part of India's effort to diversify its energy sources, a team of officials from IndianOil, Bharat Petroleum Corporation Limited (BPCL) and Hindustan Petroleum Corporation Limited (HPCL) visited the United States from July 21 to 24 this year and engaged in discussions with major US producers.

Puri said that even as global LPG prices surged by more than 60% last year, Ujjwala beneficiaries continued to receive cylinders at a subsidised price of about Rs 500–550, despite the actual cost exceeding Rs1,100.

The Government of India absorbed the burden, incurring an expenditure of over Rs40,000 crore in the previous year to shield families from the impact of rising international LPG prices. 

In August this year, the US imposed a stiff 50% tariff on goods to be imported from India, including 25% punitive duty for New Delhi's purchase of oil from Russia which Washington alleges is fuelling Moscow's conflict in Ukraine.