New Delhi, India – In a move hailed as a "historic milestone," India has finalized a landmark agreement with the United States to import liquefied petroleum gas (LPG) for one year, starting in 2026. The announcement was made on Monday by Union Petroleum Minister Hardeep Singh Puri, who emphasized the deal's significance in diversifying India's energy supply and ensuring affordable access to LPG for households across the country.
Under the terms of the agreement, Indian public sector oil companies, including Indian Oil Corporation (IOC), Bharat Petroleum Corporation Ltd (BPCL), and Hindustan Petroleum Corporation Ltd (HPCL), will import approximately 2.2 million tonnes per annum (MTPA) of LPG from the US Gulf Coast. This volume accounts for nearly 10% of India's total annual LPG imports, marking a substantial shift in the nation's sourcing strategy. The deal is the first structured, long-term LPG purchase agreement between Indian Public Sector Undertakings (PSUs) and US suppliers.
Puri highlighted that this agreement is a crucial step in strengthening India's energy security and reflects the government's commitment to providing affordable LPG, particularly to beneficiaries of the Pradhan Mantri Ujjwala Yojana. The Ujjwala Yojana provides subsidized LPG connections to low-income households. He noted that even amidst a global surge in LPG prices last year, the government absorbed over ₹40,000 crore to shield consumers from price shocks, ensuring that Ujjwala beneficiaries continued to receive cylinders at subsidized rates.
The agreement is benchmarked to Mount Belvieu, a major global pricing hub for LPG, ensuring competitive pricing for India. In preparation for the deal, officials from IOC, BPCL, and HPCL visited the United States in July 2025 to engage in discussions with major US producers. The supplies will be made by major companies like Chevron, Phillips 66, and TotalEnergies Trading SA.
India is the world's second-largest consumer of LPG, with a significant portion of its needs met through imports. In 2024, around 90% of India's LPG imports came from the UAE, Qatar, Kuwait, and Saudi Arabia. By diversifying its sources and adding the United States as a key supplier, India aims to reduce its dependence on traditional markets and enhance supply stability.
The deal also comes at a time when India is seeking to reduce its trade surplus with the US amid ongoing trade negotiations. By increasing energy imports from the United States, India is addressing a key point in bilateral trade discussions.
"This is a historic first," Puri stated, emphasizing that one of the world's fastest-growing LPG markets is now formally opening up to US supplies. He reiterated the government's dedication to diversifying LPG sourcing to provide secure and affordable supplies to the people of India. The deal is expected to benefit millions of households by ensuring a stable and affordable supply of clean cooking fuel.
