RNS: In a major shift in India–US energy cooperation, New Delhi on Monday announced its first ever “structured” liquified petroleum gas (LPG) supply deal with the United States—an agreement that will cover nearly 10% of India’s annual LPG imports for 2026.
Calling it a “historic first,” Union Petroleum and Natural Gas Minister Hardeep Singh Puri said the pact reflects India’s strategy to diversify fuel sources and secure stable, affordable LPG supplies for its fast-growing market.
“One of the world’s largest and fastest-growing LPG markets opens up to the United States,” Puri posted on X. “Indian PSU oil companies have finalized a one-year deal to import about 2.2 MTPA of LPG from the US Gulf Coast—close to 10% of our annual imports.”
A historic first!
One of the largest and the world’s fastest growing LPG market 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.
In a significant development,…
— Hardeep Singh Puri (@HardeepSPuri) November 17, 2025
A Big Win for Washington
The move comes months after US President Donald Trump urged New Delhi to substantially increase energy purchases from America. With the US seeking to shrink its $40-billion trade deficit with India, expanding fuel exports has been a key strategic ask from Washington.
Executives from Indian Oil, Bharat Petroleum, and Hindustan Petroleum recently concluded negotiations with major American producers during a series of visits to the US.
Why the Deal Matters for India
India, the world’s second-largest LPG consumer after China, imports nearly 60% of its total requirement. Its traditional suppliers include Qatar, UAE, Kuwait and Saudi Arabia. The new US deal adds a fresh long-term source at a time when global energy markets remain volatile.
Puri said the contract is benchmarked to Mount Belvieu prices—considered the global reference point for LPG. This, he added, gives India an additional cushion against price shocks.
He noted that even though global LPG rates jumped over 60% last year, the government kept domestic LPG cylinder prices stable.
“Modi ensured Ujjwala consumers paid just ₹500–550 per cylinder, while the actual cost crossed ₹1,100. The Centre absorbed over ₹40,000 crore so our mothers and sisters did not feel the burden,” Puri said.
Diplomacy and Trade Backdrop
The announcement comes amid ongoing India–US discussions on a broader trade agreement. Relations have seen friction in recent months over multiple trade issues, though Prime Minister Narendra Modi and President Trump spoke thrice between September and October, signalling a partial thaw.
With this LPG deal, both nations gain: the US enters a booming market, and India strengthens its energy security with a new and politically significant supplier.
