India has finalised its first-ever structured contract to import LPG from the United States. State-run oil firms will buy 2.2 million tonnes in 2026, equal to 10% of India’s annual LPG imports. The deal comes amid high U.S. tariffs on Indian goods but supports New Delhi’s push for balanced trade and diversified energy sources.

India’s state-owned oil companies have signed a one-year deal to import liquified petroleum gas (LPG) from the United States for the first time. The agreement, announced by Petroleum Minister Hardeep Singh Puri, will supply 2.2 million tonnes of LPG in 2026, marking a major step in diversifying India’s energy sources and reducing dependence on traditional suppliers.

A Major Shift in India’s LPG Sourcing

Puri said the new supply contract is India’s “first structured purchase” of U.S. LPG. The volume represents nearly 10% of the country’s annual LPG imports, making the U.S. a significant new supplier.
The pricing will be linked to the Mount Belvieu benchmark, a standard reference point for LPG trade in the U.S. A joint team from Indian Oil, Bharat Petroleum and Hindustan Petroleum held several rounds of discussions with major American producers in recent months to finalise the agreement.

Deal Comes Amid Tariff Tensions

The historic deal has been signed at a time when India faces steep U.S. tariffs covering nearly 50% of its exports, including an additional 25% penalty linked to Indian purchases of Russian oil.
Officials said the LPG contract is not part of ongoing trade negotiations for a broader deal, but it does help balance trade between the two countries. Commerce Secretary Rajesh Agrawal said the agreement fits into “the overall context of keeping trade with the U.S. in the right mix,” even though it is not a formal part of any negotiation package.

Long-Term Planning and Market Opportunities

The Commerce Secretary said India had been considering U.S. LPG supplies “for long,” but the opportunity became feasible only this year due to market conditions and infrastructure readiness.
The deal also opens the door for future U.S. energy supplies, as India remains one of the world’s fastest-growing LPG markets. With household and industrial demand rising, securing stable and affordable supplies is now a key policy priority for New Delhi.

The agreement marks a new chapter in India–U.S. energy cooperation and strengthens India’s position as a major global LPG buyer. It also signals a broader strategy of reducing supply risks by diversifying import sources at a time of global uncertainty.